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.