EU funds directive shows who governs

Only days into office, our new Con-Lib coalition government has been humbled by those who have actually long been in charge - the European Union.

It appears that the EU cannot be prevented from making a new financial services law that threatens to drive Britain's hedge funds industry offshore and cost us billions in tax revenue.

Quoted in Frankfurt's FAZ newspaper, German Chancellor Angela Merkel made clear the mirage of Britain's influence in Brussels and the state of democracy within the EU when she said: "Unfortunately we have to overrule the UK, but that is possible with a majority."

Given our government can be completely over-ruled by the EU, many would be forgiven for wondering why we bothered so recently to elect a government of any political colour.

It seems it was not to govern.

What election?

Once again we are shown that a majority of ministers from other European governments are in charge and all our new 'leaders' in Downing Street seem to be able to offer in response is shrugged shoulders and mutterings about battles they can't win.

Worse, their response shows no interest in actually seeking to change this anti-democratic EU situation and to regain the power to prevent severe damage being caused to a key British business sector.

How do our politicians hope to restore public faith in our democratic system if they continue to appear in this way to be little more than puppets, unable to control a Brussels regime making damaging laws that both business and government oppose?

Do David Cameron and George Osborne actually want to govern, or do they only want to posture - to occupy lofty positions, but only tinker on the margins while major decisions over how the country is run are made in Brussels by ministers in other governments that no-one here elected?

Media failure

While the response of our new leaders has so far been little more than pathetic and embarrassing, the issue at least reflects accurately the state of national democracy under the EU regime.

Yet, perversely, the EU remains largely unrecognised by the 'Westminster Village' - in which I include political journalists in the mainstream media - as a major contributor to today's lack of public faith in our political system.

Not once during the election campaign did we see or hear mention of how wriggling in the most blatant way out of a clear election promise to hold a referendum on the EU Constitution - when it returned repackaged as the Lisbon Treaty - undermines trust in election promises being made by Labour or the Liberal Democrats, in particular, this time around.

Not once during the election campaign, despite the amounts concerned overshadowing considerably other points of economic debate, and despite the waste of it being crystal clear, did we see or hear mention of the scale of cash Britain will hand over to the EU this coming financial year - £7.6bn (net).

No candidate was asked to justify this, while economic debate focussed on much lesser amounts.

Naturally, the politicians don't want to admit the extent to which they've marginalised themselves by handing ever more powers to the EU.

But, worse, the media seem complicit in their game that day-to-day government in this country has not become little more than a charade.

Critical cash

Has the print media, in particular, even considered that their falling revenues may to some extent be explained by the fact that political journalism appears to have drifted away from reality, occupying the same bubble as the politicians?

Sure, much news is now obtained online. The rise of the internet is undoubtedly also a factor.

But if it appears that the mainstream print media are failing to hold politicians to account - by failing to puncture their spin and to challenge them with the big questions about their credibility - why then should anyone bother buying a newspaper?

It seems a first step in putting greater pressure on our politicians to seek to govern again may be to pressure our media to burst the bubble of our leaders' increasing powerlessness.

It's a fair bet that for them to do so more robustly than at present may even be in the media's own best financial interest.

Reality check

What Nick Clegg and the rest of our new government must conclude from this early losing power clash with the EU is this.

Electoral reform without rebalancing the EU's powers back in favour of elected governments - as the pre-coalition Conservative manifesto pledged steps towards - would merely be rearranging the deckchairs while democracy, and public faith in our political system, carries on sinking.

So, the EU isn't really an issue?

by Marc Glendening

During Britain's recent general election campaign we were repeatedly told by the BBC and various media pundits that the EU was not a key issue.

The three party leaders only briefly touched on the issue. There was one really telling moment, however.

When David Cameron outlined in the final TV debate his immigration proposals, Nick Clegg rightly informed him that his plans to stem the flow of migrants was doomed to failure as the EU treaty does not allow a national government to deny citizens of other member countries entry.

Cameron was dumbstruck and had to acknowledge his plans only applied to non-EU citizens.

With the German government claiming that 84% of all its laws, since the Single European Act, have had their origin in directives and regulations emanating from Brussels, it is becoming clear to the British and other European peoples that our elected representatives have little meaningful power.

The Lisbon treaty has only recently been passed and this will add significantly to the percentage of laws in the member countries that are determined centrally in Brussels.

Elections are becoming little more than a form of political beauty contest in Europe and, in some cases, not a very good one at that.

UKIP factor

A little commented upon fact is that the UK Independence party won over 900,000 votes in the general election and in a number of closely contested seats, including Solihull and Grimsby, may well have denied the Tories victory.

Given that it has been calculated that had David Cameron's party only gained another 16,000 votes strategically distributed it would have gained an overall majority, it is perhaps safe to conclude - as we predicted on this blog at the time - that the party's decision to abandon a referendum on the Lisbon treaty cost it outright power.

Bailout cost

While the political dust was still swirling around in the immediate aftermath of our inconclusive election, news emerged that, in his last act as Chancellor, Alistair Darling had agreed to hand over a further £8 billion from the UK taxpayer to the EU as part of the EU-IMF bailout of Greece.

This is on top of the £10 billion contribution we hand over to the EU each year, which is expected to rise yet again following the new round of budget negotiations between the Commission and the member states that will commence shortly.

It will be interesting to see how Nick Clegg's party play this issue, given their fanatical devotion to building an ever more powerful EU and the big cuts the Tories say need to be made early in the lifetime of the new coalition government.

When the Tories announced recently that they intended to cut our relatively small handout to the College of Europe (the institution that trains Brussels bureaucrats) Clegg denounced this and said the contribution should be ring-fenced.

Eurozone member countries are now trying to put together a massive new financial support package estimated to run to €750 billion (£640bn). Some of this will come from the IMF, which Britain also contributes heavily to.

Germany is committed to putting in €123 billion (£104bn) and is facing extra austerity measures at home to pay for the bailout contribution.

This is not going down well with the voters and Angela Merkel's Christian Democrats lost control of North Rhine-Westphalia in the wake of the bailout being announced.

'Beneficial' crisis

While German and other European voters look on in horror at the scale of the unfolding Greek euro crisis and the implications for those trapped in the eurozone, the European political class are needless to say seeking to use the crisis to centralise even more power in Brussels.

"The Greek case is a potential turning point for the eurozone," says Olli Rehn, the commissioner for economic and monetary affairs.

"If Greece fails and we fail, this will do serious and maybe permanent damage to the credibility of the European Union. The euro is not only a monetary arrangement, but a core political project of the European Union … In that sense, we are at a crossroads."

The Commission is now putting together stricter rules for member states, including "budgetary surveillance" and "reinforced economic policy co-ordination".

Of course, the EU is of no relevance to British politics.

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written by Marc Glendening