Revolutionary implications of the Greek election

comment from the DM campaign team
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The victory of the Greek far-left in the country's recent general election could have two very important knock-on effects for Britain.

The first is psychological; the second relates to the £10 billion our then chancellor, Alistair Darling, was obliged by Brussels to contribute to the initial Greek bailout fund in 2010. This money is now seriously at risk.

On a positive note, the success of Syriza, together with the votes gained by the centre-right, eurosceptical Independent Greeks and the overtly anti-euro Communist party, is an act of brave collective defiance by a national electorate.

The Greeks have been told repeatedly by successive conservative and social democratic governments in Athens, as well as by the EU elite and mainstream media, that 'there is no alternative' to accepting the terms of the austerity and reform packages imposed by the 'trioka' of Brussels, the IMF and the European Central Bank.

All kinds of terrible consequences have been predicted for the Greek people should they dare to fail to defer to their external, neo-colonial rulers.

In Britain a similar, if more low key at this stage, campaign is being run by the largely taxpayer-funded pro-EU lobby and its allies in the CBI, Goldman Sachs, and other manifestations of big business.

We are told that, should we leave the EU, 'three million jobs' could be lost; that old myth destroyed conclusively 15 years ago by the National Institute for Economic and Social Research, the body that had been paid by the New Labour controlled Britain in Europe campaign to perpetuate it!

All political movements trying to perpetuate the status quo use fear to try to prevent voters even contemplating the possibility that positive change is possible. The pro-EU lobby enjoys psychological hegemony at present because it has succeeded as a consequence of its massive financial advantage in dictating the terms of debate; the focus at present is solely on the supposed 'risks' of change.

Alexis Tsipras and his party were able to win, in part, because they had the guts to challenge and deconstruct the self-serving interpretation of 'common sense' being communicated by the Greek and international political and business elites.

This is what the pro-independence alliance now needs to do in the British context: we have to take on the myth that the EU is a constitutional Godhead that must be deferred to for all time. We have to start changing the way in which the debate about EU membership is framed: we need to point out that there are serious risks to our future economic prosperity, as well as political viability, if we stay in.

The EU is a declining economic and demographic bloc which is in the process of becoming ever more centralised in order to cope with the inherent flaws and contradictions of the Single Currency system. Inevitably if we continue to remain inside, we will become hit with ever more laws and demands for money dictated by the Eurozone bloc of countries voting as one caucus in the Council of Ministers.

The second implication of the Syriza triumph might not be so good for us as a nation: The new Greek premier, Alexis Tsipras, has threatened to renege on his country's debts. This could have serious implications for Britain. 

We were coerced into putting up £10 billion towards the initial bailout package. Our then chancellor, Alistair Darling, at a meeting of the council of ministers in May 2010, initially refused to commit UK taxpayers money on the grounds that as a non-euro country we could not be expected to contribute. The EU then threatened to evoke Article 122 of the treaty, a measure which commits member states to provide assistance to those countries experiencing 'natural disasters'.

Had Mr Darling taken it to a vote, he would have been defeated because of Qualified Majority Voting. And this was all despite the treaty stipulating that there should be no bailouts of governments in the single currency.

This episode shows that the rule of law does not actually apply in Brussels; the Commission as the guardian of the treaty, backed by the legally elastic interpretations of the ECJ, can redefine the rules as they so wish. Yet we are told by the CBI and the pro-EU lobby that Britain will lose 'influence' if we leave the EU. What influence?

For the time being, let's focus on the positive aspects of this Greek drama. The election result may herald the refusal of mass electorates to comply with the elite as never seen post-war. This could be a revolutionary moment in more ways than one. 

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Cyprus bank account grab exposes EU's new feudalism

by Marc Glendening
 

The peasants of Cyprus are now truly revolting, following a decision by Angela Merkel and the other Eurozone heads of government to force Cyprus to grab private bank savings to contribute €5.8 billion towards an EU-IMF bailout. 

This edict demonstrates that the rule of law accounts for very little in the European Union. 

One of the big claims always made by supporters of Brussels-based governance was that the individual EU member states would be subject to a system based upon predictable and impartially applied rules, enforced by a Commission and Court of Justice above sectional, national interest.

The EU, they have argued, was therefore a continuation of the political project commenced by the European Enlightenment in the late eighteenth century. It has heralded, allegedly, another move away feudalism of the ancien regime. 

However, the situation in Cyprus proves what some of us have been arguing for some time. Namely, that the brave new world of the EU represents in reality a return to pre-modern, pre-democratic Europe. 

By Brussels fiat, savers' private property has been seized in an act of retrospective taxation. This is an arbitrary act of raw power befitting Louis XIV. A decision taken in private, passed on as a fait accompli to the EU's local agent in Nicosia, 'president' Nicos Anastasiades, and then imposed by him without reference to the national parliament - the same elected body that last week voted against divesting savers of their already taxed income. 

How convenient that Brussels and the Cypriot president have found a (constitutional?) way to circumvent the impertinent reservations of parliamentarians.

This is not the first time Brussels has made it all up on the hoof and disregarded the apparent rule of law that supposedly lies at the heart of the treaty. 

In 2003, Germany and France both broke the Stability and Growth Pact  rules that supposedly accompanied the single currency. No action was taken by the Commission for exceeding budget deficits of 3% and levels of national debt exceeding 60% of GDP. Portugal and Greece did, however, have their collars felt.

As many politically dissident Germans have argued, the various euro bailouts have contravened the supposedly strict Maastricht rules designed to prevent members of the single currency from becoming responsible for the debts of others. They claim, as a result, the EU treaty is now incompatible with the Germany constitution. 

When Alastair Darling was summoned to Brussels to discuss the eurozone crisis the day after the British general election in 2010, he thought there was no way Britain as a non-euro member could be forced to contribute to the bailouts. Wrong! The European Court of Justice and the Commission suddenly decreed that Article 122 of the EU treaty - a measure originally related to helping member states that had experienced a natural disaster - now covered those countries experiencing economic problems. Our then chancellor was forced to stump up £11 billion in loans.

At the beginning of the Cyprus bailout scandal we were told that this savings grab would be a one off. Now we learn from Jeroen Dijsselbloem, chair of the eurozone finance ministers, that this 'solution' might indeed be applied to other single currency countries as well. 

In Brussels anything goes and anything is possible. The European Enlightenment was about the rule of law and making the exercise of power accountable and transparent to the people. The EU is about reversing this process.

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written by Marc Glendening - Campaign director, Democracy Movement

For the latest campaign news and EU developments, follow us on Twitter: @DemocracyMovemt

Eurozone turmoil latest - excellent summary

Those looking for a quick, straight-talking update on the continuing financial turmoil in the eurozone could do little better than to read Ambrose Evans-Pritchard's pieces for the Daily Telegraph. 

This extract below in particular from his latest article provides a perfect summary of recent developments and their implications: 

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Events in Europe are now moving fast. Portugal has been in havoc for the last week. Spain is in ever greater havoc. Much of southern Europe has become unpredictable.

Is it the fault of the monetary union and the euro? Yes, of course it is. While large parts of the world are in deep economic crisis – including Britain – the damage is concentrated with lethal intensity in the EMU victim states. Spain’s unemployment rates is already 25pc, and the full austerity has yet to bite.

It is made much worse by the unpleasant discovery that elected governments can do nothing to escape the trap. They have lost control over their own destinies.

Spain and Portugal are trapped in chronic slump with over-valued currencies. While they have clawed back some lost labour competitiveness by cutting wages, this has merely – and necessarily – compounded the debt-deflation disaster. It has pushed them closer to bankruptcy.

The Draghi bond plan can certainly put off the day of reckoning. It can lower borrowing costs across the board and cushion the slump. But it cannot in itself stop the slow asphyxiation of these societies.

We are moving from the financial phase of this crisis to the full-blown political phase. It really is playing out like the 1930s.

Final thought from recent media comment on the euro crisis, however, should go to Chris Morris, the BBC's correspondent in Athens, who says of Greece in his latest article:

So after three governments, two bailouts and an economic contraction of Great Depression proportions, this country isn't out of the woods.

Time, then, to stop avoiding the heart of the problem and start planning an orderly restoration of a national currency? At this stage, there's no pain free solution and clearly no viable alternative to a Greek departure from the euro.

New EU deal faces multiple referendum threats

A recent EUobserver article has highlighted how the 'fiscal compact' deal agreed at last week's EU summit could yet be scuppered by referendums and legal delays in numerous participating countries.

The deal is designed to extend EU control over the tax and spend policies of the elected national governments of its member countries by transferring greater power over national budgets to EU institutions.

Due to David Cameron's veto, the deal will now have to be agreed between the 'euro-plus' group of participating countries outside the institutions of the EU.

But according to EUobserver, "serious obstacles are beginning to materialise in Ireland, the Netherlands, Austria, Romania and Denmark, while Finland, Latvia and the Czech Republic may also present the process with additional hurdles."

Treaty hurdles

In Ireland, aspects of the deal are being put to the country's attorney-general for a verdict on whether a referendum is required, but the Irish Europe minister, Lucinda Creighton, has fed speculation by saying there is a 50/50 chance of a public vote.

Today the Irish government has said that a decision on a referendum will not be made until March, once a final text of the deal is agreed.

In the Netherlands, prime minister Mark Rutte has insisted that a referendum would not be needed. But with a highly EU-critical party as his partner in a coalition government and the opposition Labour party saying that new elections would be required if the deal amounts to a transfer of power to Brussels, Mr Rutte may face problems getting the deal through the Dutch Parliament. The country's Socialist Party and the Greens have also called for a referendum.

In Austria, government officials have also indicated that the creation of a fiscal union would require a referendum and, in Romania, while supporting the deal, President Traian Basescu has said that a new treaty would need a two-thirds majority in the Romanian parliament and approval in a public vote.

In Finland, prime minister Jyrki Katainen has dismissed any talk of problems in ratifying the deal. But the country's constitutional committee has ruled that replacing unanimity by majority voting on the EU's bailout funds would be unconstitutional, since it could result in a loss of parliamentary control over Finland's financial contributions. According to EUobserver, a Finnish official has said that it would be "impossible" for the government to negotiate this problem away.

Denmark’s new prime minister, Helle Thorning-Schmidt, has so far not commented on whether the deal would provoke a Danish referendum, but leaders of the other two parties in her governing coalition have said that a vote might be needed. Crucial to a Danish decision may be the Red-Green Alliance, a key part of the governing coalition, which is a strong opponent of the EU’s "neo-liberal policies".

Denmark rejected euro membership in a referendum back in September 2000, so moves to allow the EU to govern the country's economic policy may be seen as a breach of this settlement.

In Latvia, the government has signed up to the 'fiscal union' deal, but many politicians have voiced a sense of betrayal over the imposition by the EU of strict austerity measures and cuts in EU structural funds. Raising the spectre of a referendum as a bargaining chip to win additional EU aid would only take the votes of 50 of the 100-member Latvian parliament.

Finally, the Czech Republic is of course home to Vaclav Klaus, the national president who caused the EU so much trouble over the Lisbon Treaty. While a referendum would not be automatically required on the changes, President Klaus has the power at least to delay the law-making process by holding back his signature, which must be applied to all new legislation.

Navel-gazing

It looks like the EU could well be in for yet another lengthy period of introspection over their bid to create 'fiscal union' and, even if the hurdles above can all be overcome, the deal still does nothing to address the core underlying problems of the scale of debt and low growth causing problems in several eurozone economies.

It's precisely because the EU seems far more interested in itself than in advancing the measures European countries need in order to prosper in the fast-moving, 21st century world that calls in Britain for an EU referendum - such as are being advanced by groups like the People's Pledge campaign - and support for a new deal with the EU are only likely to grow.

Cameron's veto will feed demand for an EU referendum

Why should the EU be given the right to govern and tax (arguably out of existence) what is, in Europe at least, a predominantly British-based industry that makes a huge contribution to our economy?

That's the question critics of David Cameron's actions at the recent EU summit will have to answer, if they hope to make a case against the Prime Minister's use of Britain's veto.

In a remarkable move during the EU's latest bid to resolve the bloc's debt crisis, Nicolas Sarkozy and Angela Merkel have chosen to risk their ability to quickly implement measures that would increase eurozone fiscal discipline over an attempt to impose EU regulation and a transaction 'Tobin' tax on Britain's financial services industry.

Confronting Britain in this way and provoking use of our veto over a bid to gain control over, and income from, the majority of Europe's financial sector that is based in Britain is an extraordinary demonstration of misplaced priorities from the EU at a time when the urgency of eurozone restructuring is paramount.

If the EU is serious about finding quick solutions to the eurozone debt crisis, they would surely have dropped such intrusive demands to interfere in another country's affairs in order to use the far speedier existing treaty mechanisms available?

But instead of coming away from this latest summit with a deal to calm market fears of national defaults and the disintegration of the euro, the determination of the 'Merkozy' partnership to regulate Britain's financial services industry has introduced a delay of more than three months for replacement 'fiscal compact' structures to be planned.

UK industry

A look at how vital financial services are to the UK economy shows clearly why David Cameron had to resist this arrogant 'Merkozy' push to take over and tax the City.

Referencing a PriceWaterhouseCoopers report, a recent Open Europe study highlighted that in the 2009-10 tax year the UK financial services sector made a tax contribution of over £54 billion, or 11.2% of the government's income from all taxes during that year.

The industry also contributed a £35bn trade surplus in 2010, playing a critical role in Britain's trade balance and, according to TheCityUK - an independent membership body promoting the UK financial services sector - nearly 2 million jobs are at stake.

Euro greed

But it's also clear from the same Open Europe report why other EU leaders want to force Britain to concede to EU government in this area. The City hosts a huge proportion of European and indeed global activity in many financial markets.

It's home to the largest foreign exchange market in the world, the largest insurance market in Europe, dominates the private equity industry and around 80% of the European-based hedge fund assets are managed in the UK.

There is clearly little point in a European financial transactions tax, the proceeds of which EU institutions hope to pocket, and proposed regulation if the UK is excluded.

New structures

Unless the EU relents on its stubbornness over financial services, a separate deal outside the EU's architecture will now have to be established by the countries who wish to participate in the new eurozone 'fiscal compact'.

This will not just set down new rules imposing stronger EU controls over national budgets but also how to enforce them. No mean ambition.

Either other EU leaders will realise the scale of the task ahead of them in respect of putting together such an inter-governmental deal and will conclude that it was stupid to push Britain away over financial regulation.

Alternatively, the countries who have expressed a wish to participate in the new 'fiscal compact' will forge ahead regardless and the result will raise new questions about how that will affect the balance of power between Britain and the other 26 EU members.

Should such a new voting block, doubtless also working informally within the European Union institutions as well as outside, be willing to consistently out-vote Britain in a range other EU policy areas, this will only feed demands for a proper reconsideration and referendum on the totality of Britain's membership of the EU.

If it becomes clear that we have even less influence over EU law-making than is already the case, then there is no remaining reason why we should wish to accede to the rules that come out of the EU nor pay the billions of pounds every year that Britain contributes to the EU's budget.

Beneficially, the result of this latest summit could be that holding an 'in/out' EU referendum - such as the one demanded by the People's Pledge campaign - and forging a new, 'free trade plus voluntary co-operation' deal will start to look all the more appealing.

New euro 'masterplan' already showing flaws

The EU is this week limbering up to reveal a last-ditch 'masterplan' to save the euro.

Over many months, a succession of summits have invented ever bigger sums of money the EU intends to throw at the eurozone debt crisis without any concept of how to achieve them.

So far the EU's only strategy seems to have been to try to intimidate the markets into submission rather than come up with a coherent solution to the euro's glaring flaws.

Clearly, and unsurprisingly, that hasn't been working. Not only has the lack of detail behind every EU pronouncement failed to convince, but the perpetual indecision by the EU has demonstrated amply what has for some time been a central tenet of eurosceptic thought.

Namely, that the EU as a decision-making structure is too rigid and incapable of acting with the dynamism required to secure Europe's success and prosperity in our fast-moving 21st century world. The EU, being a 1920s idea founded on a 1950s view of the world, has never looked more out of date.

In this context, it's hardly surprising that the ratings agencies have continued to criticise and downgrade the credit-worthiness of euro member countries.

Flawed auto-sanctions

But this week, the EU has finally changed tack. Talks led by the 'Merkozy' partnership of the French and German leaders have shifted from broadcasting fantasy funding plans to discussing 'refounding' the EU through treaty changes that will enforce 'fiscal union'. The plans are being touted as what the eurozone needs to survive in its current form.

More details will emerge later this week, but one of the key measures already being proposed is the idea of automatic sanctions against those countries that breach eurozone borrowing rules - particularly the rule that budget deficits should not exceed 3% of GDP.

Yet, 23 EU countries, including 14 eurozone members, are already in the EU's 'excessive deficit procedure' as a result of breaching this 3% rule which, under the current Stability and Growth Pact, should already have provoked sanctions.

This is despite the fact that the rules of the original Pact were softened in 2005, with 'exceptional circumstances' being permitted for deficits above 3%, 'other relevant factors' allowed to be taken into account before a deficit is considered excessive, and longer deadlines for corrective action.

According to the EU Treaty, sanctions can include requiring euro countries to publish additional information before issuing bonds and securities; inviting the European Investment Bank to reconsider its lending policy towards the country; requiring the country concerned to give the EU a non-interest-bearing deposit until the excessive deficit has been resolved; or, finally, imposing fines of an "appropriate size".

If auto-sanctions are approved in the looming negotiations, unless made retrospective, only Finland, Luxembourg and Estonia would potentially be subject to them as only those countries are not currently in the excessive deficit procedure.

This would render the proposal effectively usless towards having a short term impact on problem countries nor, in any case, will they be any solution to the underlying debt and growth problems of economies in difficulty. They simply punish, don't resolve.

Key questions

Now EU leaders are lurching back towards toughening the Pact up again, this provokes a series of further questions.

Firstly, given sanctions for excessive deficits have been available to the EU since the euro launched, why exactly have none ever yet been applied under the current Stability & Growth Pact rules?

Secondly, will the 14 euro countries already suffering 'excessive deficits' be let off auto-sanctions until they get back on track and then fined only after future transgressions? How much will future breaches cost them?

More broadly, how will automatically imposing financial sanctions on these countries help them get out of their debt and low growth problems that tend to provoke excess deficits in the first place? Won't such sanctions simply make their economic problems worse, and is that why none have ever yet been applied?

Referendum unlocked?

Finally, this proposal also provokes a key political question for David Cameron on the question of a referendum, since what is being proposed, in respect of auto-sanctions at least, is basically a beefing up of the existing EU Stability and Growth Pact.

Despite not being in the euro, Britain is subject to the Stability Pact rules and committed to "endeavour to avoid an excessive government deficit", although we are not bound by the penalty clauses should our endeavours fail. This was a key element of our opt-out from euro membership. We are, however, one of the nine non-euro countries also currently listed as being in the excessive deficit procedure.

If the mooted treaty changes centre on amending the Stability Pact clauses, the Prime Minister had better ensure our euro opt-out protocol is amended to exclude Britain from the new measures. If we are drawn into the new auto-sanctions, it will impossible for David Cameron to avoid holding a treaty referendum, since his 'referendum lock' will have been prised open.

Reality check

As Conservative MEP Roger Helmer put it this week, asking whether the euro can be saved "is like asking a cancer patient how we save the tumour. The euro is the disease, not the patient."

Prosperity and democracy on our continent are what needs to be saved and that's more likely if the rigidity of the euro is abandoned for at least several of its current members.

It's time for Europe's political leaders to drop attempts to save their ill-judged euro project, admit it's doomed at least in its current form, and start instead planning how to mitigate the effects on the financial system of several departures.

Birthplace of democracy experiences Brussels 'regime change'

by Marc Glendening

The European Union has always boasted that it is a force for democracy; a guardian against a return to the authoritarian politics that have haunted various parts of our continent.

This, of course, as recent events in Greece have confirmed, is total nonsense. The EU elite power system is, and always has been, the major post-war threat to liberal, democratic values.

The whole edifice was designed, as John Laughland demonstrated in his seminal book The Tainted Source: The Undemocratic Origins of the European Idea, to limit the capacity of citizens to hold their rulers to account.

The idea of a pan-European government was driven in its early, post-war days by prominent individuals who had been associated with the fascist politics of the inter-war period. People such as Robert Schuman, who was an official in Petain's Vichy government, and Paul-Henri Spaak (active in the Belgian fascist movement).

The European Commission's original name, revealingly, was 'the Higher Authority'; a non-elected body that was meant to preside over the elected member governments; as indeed it does, albeit together now with the European Council, the grouping that brings together the political heads of government.

Post-democracy

The EU is now returning the peoples trapped within it to a pre-democratic situation. Recently, the French president, Nicolas Sarkozy, has articulated very directly what is expected of the governments and the peoples within the Eurozone.

Referring to the short-lived decision by the Greek prime minister to consult his people in a referendum as to whether or not they wanted to proceed with the EU/IMF bailout programme, he came out with this piece of typically Euro-Orwellian 'double-think';

"Giving people a voice is always legitimate, but [here we go] the solidarity of all Eurozone countries is not possible unless each one agrees to measures deemed necessary."

Deemed necessary by who? EU leaders who have no electoral mandate whatsoever in Greece? Further demonstrating the thinking inside the Brussels machine, an EU official who refused to be named commented in a similar vein;

"We are at war. The crisis is that bad. And its time that Greece put party politics aside and demonstrate national unity."

The logic of these sinister authoritarian statements is that no electorate should be given the ability to contradict the priorities of the Euro-elite, who will decide all the key policies relating to public expenditure levels, which industries should be in the state and private sectors, rates of taxation and so on.

'Party politics' must be put aside, apparently. Where and when did we last hear these sentiments in Europe?

Regime change

BBC Newsnight's Paul Mason also alluded to the fact that the Euro-elite is now explicitly engaging in 'regime change' when he took on the French president at a press conference last week over the democratic implications of what was taking place. He asked Mr Sarkozy;

"It's evident that you and Angela Merkel, the two most powerful governments in Europe, are trying to change the governments of Italy and Greece. How is that just? And once started, where does it stop?"

This was met with an outraged response from Mr Sarkozy about Mason coming from an island and "not understanding the subtleties of the European construction". It would only have been marginally less crass had Mason come back with insults about Sarkozy sharing an obsession for pan-European government because he comes from the same country as Napoleon.

Mason also revealed rumour that, during the week prior to Italy accepting IMF oversight of its public finances, German Chancellor Angela Merkel had phoned the Italian president to explore the possibility of a change of government and that, according to Mason;

"EU officials have certainly been in contact with the Greek opposition to explore the creation of a national unity government."

EU placemen

Not content with imposing an austerity programme on the Greek government, the Euro-elite have also evidently been intervening to help to manufacture a revolt within the Prime Minister's centre-left PASOK party designed to remove him from office and bring about a new coalition government.

The aim was clearly not just to block the bailout referendum that George Papandreou had announced but also to prevent an election being called that might have thrown up results inconvenient for the Euro project.

To replace Papandreou, the EU elite have been pushing for Lucas Papademos, a former official in the European Central Bank and also wants another of its trusted old boys, former commissioner Mario Monti, to replace Signore Bunga-Bunga in Rome's hot seat.

The plan is now to concentrate new powers with the Euro-elite and to do this in a way that means there is no requirement to hold referenda or even, in most countries, debates and votes in national parliaments.

No say

Article 352 of the EU treaty will be invoked to force through most of the proposed changes, including Commission surveillance of national budgets, while it is likely that the EU will in December also have to announce a new mini-treaty for bigger measures like the Financial Transactions Tax.

Heads of government, including David Cameron, hope that by bringing about the forthcoming transfer of powers this way, calls for an EU referendum will be neutralised. The argument will be that the treaty is too insubstantial to amount to a constitutional change.

Of course, Sarkozy and his fellow anti-democratic elitists have form in this area, having himself back in 2005 ignored the overwhelming French rejection of the EU Constitution in a referendum and then used his majority in the French assembly to steamroller through the tactically renamed Lisbon treaty.

The exact same thing happened in Holland following a vote of 62% against transferring new powers to the EU and, on two separate occasions within the past ten years, the Irish people have voted against new EU treaties only to be told that they must vote again.

Yet with its new policy of regime change, the EU's anti-democratic inclinations are now being taken to new, extreme heights. So when the European Movement next go on about their beloved institution's great commitment to democracy, just laugh out very loud, please.

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written by Marc Glendening

Dazzling numbers obscure real eurozone deal

Another day, another eurozone rescue.

We have, of course, been here before. Today's deal is similarly long on rhetoric and short on detail, but that won't prevent the markets bouncing and the media once again reporting that the crisis is solved.

Yet, in a few weeks time, they will again all realise that the latest 'solution' is far from that at all.

Just as happened back in July, many crucial details of the deal are yet to emerge and have the capacity to cause a rapid unravelling.

How exactly the European Financial Stability Facility will be leveraged from its remaining €250 billion to an extraordinary €1 trillion (£880bn) - whether by the provision of risk insurance or a special purpose investment fund into which countries like China and the Gulf states will be asked to contribute - will not be revealed until the end of next month.

Similarly, will banks be able to find the required extra €106bn in capital? And whether private investors will actually swap their Greek bonds for those with a 50% repayment reduction also remains to be seen.

According to the BBC's Robert Peston, the agreement of the banks "in principle" to slashing what Greece owes them by half came at the last minute. But yesterday's Irish Times highlights unsurprising scepticism that what is being asked of them with respect to Greece represents "an exceptional and unique solution" and does not set a precedent for what may happen should the difficulties in other countries worsen.

Investors could yet decide that the warm words of EU politicians and appointees about Greece being a special case are too wafer thin relative to the economic forces that could yet come to bear on the far bigger economies of Spain or Italy.

Even if the banks go through with the deal, many observers doubt that the resulting reduction of Greece's debt to 120% of GDP by 2020 (ie. the same as Italy's) is in any case going to lighten the country's burden sufficiently to enable a rebalancing of its economy.

Economic union

A bigger problem in how today's deal is being reported is how the media are once again too hypnotised by the glittering numbers to look at the small print.

What many are missing this time are the details under the summit conclusion headings (pdf) 'Economic and fiscal co-ordination and surveillance', 'Governance structure of the euro area' and 'Further integration' which cover the EU's growing power-grab over taxation and how euro members run their economies.

Back in July, commentators made the same mistake. A far greater focus was applied to the new repayment terms for Greece and the possibility of increased funds for the European Financial Stability Facility (EFSF) than on the real gem of the package for EU leaders.

Namely, the granting of permission for EFSF money, guaranteed by eurozone members, to be used to recapitalise the worst-afflicted banks in particular countries - a responsibility that would normally have to be fulfilled by national treasuries.

Obscured integration

Again today, dazzled by completely unqualified numbers, the media are overlooking the far more significant passages of the latest deal that relate to deepening economic union, greater EU powers to interfere in the budgets of member countries and the introduction of EU taxes.

See Paragraph 27a, which says that "for euro Member States in excessive deficit procedure, the Commission and the Council will be enabled to examine national draft budgets and adopt an opinion on them before their adoption by relevant national parliaments".

Far from applying to one or two financially irresponsible cases, 13 of the 17 euro member countries are currently in the EU's excessive deficit procedure. So this represents a substantial extension of the influence of the unelected EU Commission over national parliaments with respect to the politically highly sensitive tax and spend policies of euro member countries.

Paragraph 29 goes on to discuss the "Pragmatic co-ordination of tax policies in the euro area" as a "necessary element of stronger economic policy co-ordination" and confirms that "Legislative work on the Commission proposals for a Common Consolidated Corporate Tax Base and for a Financial Transaction Tax is ongoing."

And Paragraph 35 instructs the European Council to bring forward an "interim report" in December 2011 on "strengthening economic convergence within the euro area, improving financial discipline and deepening economic union" with a report on how to implement agreed measures including "the possibility of limited Treaty changes" due by March 2012.

Flaws not fixed

Ultimately, even if today's uncertainties pan out as the EU desires, the reality is that this latest deal will still not be enough to cement the euro's cracks.

The reason is simple. There is no solution to the eurozone's problems other than for the most indebted countries to break the fixed exchange rate system and leave the euro, to restore competitiveness and growth to their economies. But of course, EU politicians and especially its employees refuse to let go of their flawed single currency project.

While the markets are bringing some realities to bear, the question is for how much longer can Europe's political elite get away with putting off the inevitable crunch, in the process worsening the mess they have created and now flushing almost incomprehensible sums of public money to protect the failing euro?

Cameron to support creation of Euro-State without democratic consent

by Marc Glendening

The British government in March gained the initial approval of Parliament to give the EU at a later date new powers over economic decision-making, through a redefining of Article 136 of the Lisbon treaty.

As was confirmed yesterday (August 16) at the Sarkozy-Merkel mini summit, Brussels intends establishing central economic governance under the leadership of the EU president Herman van Rompuy. Ostensibly, this will only apply to the Eurozone countries.

As People’s Pledge advisory council member Douglas Carswell MP, among others, has warned, giving the green light for the creation of such a powerful centralised authority carries huge risks for Britain, together with other non-euro countries Denmark and Sweden.

A unified Eurozone voting bloc will be able to force through whatever measures it wants to, aided by the European Court of Justice which has the final say in any dispute regarding interpretations of the treaty.

Remember, back in May 2010 it was decided by the eurozone majority that Britain and the other non-euro countries must contribute to the bailouts under Article 122 of the treaty. Our government believed, in its naivety, that this article was only about helping countries that were experiencing ‘natural disasters’.

Whatever opt-outs David Cameron believes he has secured will ultimately mean nothing so long as the EU enjoys legal supremacy over us. Once he has given his consent to a new Article 136, the gates of the eurozone Gothic castle will clamp shut for all EU member states.

No consent

There is also a moral dilemma relating to this issue, but not one that concerns the current UK government, sadly: Should Britain really be enabling the EU to further extend its undemocratic control over the lives of German, Greek, Irish, French, Italian and other eurozone peoples when they will have no chance to give or withhold their democratic consent to what is being planned for them?

Remember, not one European electorate voted explicitly for the single currency project in a referendum. Opinion polls showed at the time the euro came into existence that a clear majority of the German people wanted to keep their national currency.

The legal instrument through which the new powers will be transferred from the member countries to the EU is Article 136 of the Lisbon treaty. When the time comes, the political heads of all the member countries, including David Cameron, will vote to change the wording of this article.

Blank cheque

As opponents of Lisbon have always warned, the treaty contains within it the means for the political elite to add new policy making controls to the EU portfolio without having to go through the lengthy and often politically messy process of ratifying new treaties through national parliaments or, heaven forbid, referendums.

This they are now in the process of doing. The Irish government is particularly keen to restrict the right of its voters to have a say. This will no doubt be tested in the courts by citizens demanding a referendum on what will clearly be an issue of constitutional significance.

It may still be that some of the measures the French and German governments want to force through will also require a new short treaty. For example, Angela Merkel has the problem to contend with of legal challenges before the German supreme court that claim that the bail-outs of Greece, Portugal and Ireland are unconstitutional as they violate Article 125 of the treaty which forbids paying off the debts of other eurozone countries.

While nothing has been decided yet, it might be that in order to overcome the objections of many German citizens, together with some politicians, Merkel will require an explicit re-writing of the treaty.

Miliband's opportunity

Even if this proves to be the case, our government has stated it will do whatever is required to facilitate a politically unified eurozone. Cameron will attempt to whip through Parliament, enthusiastically supported by the Lib Dems, naturally, any new treaty in addition to the beefed up Article 136.

It will be interesting to see how Ed Miliband plays all this. If he’s smart, Labour will oppose this Cameroonian chicanery and make common cause with the numerous Tory MPs who can be expected to defy their leadership on this. If this were to happen, it is not inconceivable that the government could be defeated and the Labour leader would be able to position himself as a champion of the rights of the British and other European peoples against the furtive, secretive political class.

If he doesn’t, he will confirm that he is just another dreary and untrustworthy political insider.

The good thing about all of this is that at least the fog is now clearing from the battlefield and a growing number of people appreciate what is at stake and that the stark reality is that Britain now needs to decide whether it is governed principally from Brussels or by those who are accountable to us through the ballot box, as in Switzerland and Norway.

It’s that simple. And this is where the People’s Pledge referendum campaign comes in.

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written by Marc Glendening

Peter Hain was right! EU moves to full fiscal union

by Marc Glendening

Respect where it is due. Peter Hain, when he was still a principled politician of the Labour left, predicted in his prescient book Ayes to the Left that the European single currency would lead inexorably to full fiscal union and this was one of the reasons he believed we should stay away from this elitist project.

"A European Bank independent of democratic control and dedicated to almost exclusively to price stability must be reversed. It is economically disastrous and politically dangerous", he asserted correctly.

A short while later, Tony Blair offered him the job of being Europe minister and, low and behold, Mr Hain had discovered the joys of New Labour and membership of the single currency.

So what was it, exactly, Mr Hain, that suddenly attracted you to the European views of the then all powerful leader of your party?

Euro prediction

In his book, written in 1995, Peter Hain went on to claim that the Brussels budget would have to be increased “three to four times” in order that a system of fiscal transfers could be established so that huge sums of money could be injected into those economies within the Eurozone that were struggling with the interest and exchange rates determined by the European Central Bank.

Last week's second Greek bail-out of €109 billion (£96 billion) and the outlining of the future direction the EU in relation to economic policy, including the expansion of the powers of its bail-out fund, confirm the Hain thesis.

A jubilant Nicolas Sarkozy claimed the crisis summit in Brussels represented "a historic moment" and promised that "by the end of the summer, Angela Merkel and I will be making joint proposals on economic government in the eurozone. Our ambition is to seize the Greek crisis to make a quantum leap in eurozone government… There is no European Monetary Fund yet, but nearly”.

Whether German, French, Dutch, Finnish, Swedish, Danish and other taxpayers from EU member countries feel quite as ecstatic at the prospect of having to stump up billions of extra euros to help keep afloat the single currency project is another matter and a factor few in the media have focused much thought on.

EU taxes

While the whole EU project has been designed to prevent ordinary citizens from being able to hold the Pan-European political class to account on key issues (hence the elite’s fear of referenda), it is probable that many of them will use their votes increasingly in national elections to express their displeasure.

British taxpayers will be further dragged into this crisis in the short-term if Portugal and Ireland require new bail-outs before 2013. We are obligated under Article 122 of the Lisbon treaty to do this, just as we were first time round with these two countries. This is in addition to the amounts we have put in through the IMF, including of course to Greece.

In the longer-term, the EU plans to introduce a range of new Brussels-set taxes that will be levied against all individuals from the member states. This is the only way Brussels will be able to build a treasury on the scale Peter Hain so accurately predicted fifteen years ago.

Sudden impact

When he was Europe minister in 2002, Peter Hain evoked Clint Eastwood in the cult classic movie Dirty Harry with the words 'Make my day' in challenging EU-sceptics to have the courage to debate him about the single currency.

Sadly, unlike Harry taking on a rabid gun-toting psychopath on the streets of San Francisco, Mr Hain turned out to be all mouth and no trousers.

Despite the Democracy Movement offering to stage a public debate between the then minister and pro-pound Labour National Executive Committee member Mark Seddon (now director of the People’s Pledge), Peter Hain failed to take up the challenge he had rhetorically set.

Instead, he embarked on a national speaking tour in support of the euro that was much more in keeping with the New Labour ethos of the times: no opposing speeches were allowed!

Perhaps he was worried that Mark Seddon would have used against him the compelling arguments he had himself expressed in Ayes to the Left.

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written by Marc Glendening

Euro in meltdown: Let's break free sooner rather than later

by Marc Glendening

The new Democracy Movement campaign, Out of the EU and into the World, gives 5 positive reasons why we need to free ourselves from the Little Europeanist vision that has so dominated the thinking of the political class for the past 50 years or so.

There is a huge opportunity now for those of us who have a more modern, international future for our country. A growing number of people are open to the idea Britain should liberate itself from centralised EU control.

The current crisis in the eurozone is completely undermining the once commonly held belief that a politically united Europe is 'inevitable'. The task we now face is to make the British people aware that unless our country leaves the EU we risk being sucked into the ideologically fanatical attempt to prop up the single currency. This will have terrible repercussions for ourselves, as well as the peoples of the other member states.

UK taxpayers have already been forced under Article 122 of the Lisbon treaty (a measure supposedly concerned with showing solidarity to countries experiencing 'natural disasters') to risk £12.5 billion as part of the bail-outs for Greece, Ireland and Portugal, even though we, together with Denmark and Sweden, have chosen to stay outside the euro.

ECB exposed

According to Brussels, we are obligated until 2013 to continue handing over money to sustain the euro, in addition to our £17.5bn annual budget contribution. With many German and Finnish voters defying their EU-obsessed rulers on this issue, the Brussels based elite will probably attempt to make us stump up even more cash to finance further bailouts. Greece is in need of a second massive injection following the initial £110 billion it received last year.

In recent days, German officials have been reiterating to their British counterparts in the EU that we will be obliged under the terms of Article 122 to contribute more cash to the next Greek bailout. The Guardian (June 17) claims that Britain will have to find a further €15 billion should the second intervention reach €100 billion.

According to a recent Open Europe study (pdf), the European Central Bank is currently exposed to the tune of a staggering €444 billion worth of debt having provided cheap credit - in violation of the EU's own stated treaty obligations - to struggling banks and Eurozone governments. The ECB is holding €190 billion worth of Greek debt alone.

There is every possibility now that the increasingly toxic ECB will itself go bust within the next two years. Who will ultimately have to pick up the bill should this happen? Ostensibly, the national central banks and taxpayers of those countries within the eurozone.

Given the huge likely cost of recapitalising the ECB it is far from certain that the European political elite will be able to deliver the sums required from within the Eurozone alone. Just as Brussels forced taxpayers from the non-euro countries to contribute to the bailouts that have already taken place through a highly perverse interpretation of Article 122, there is absolutely nothing to stop them trying to pull off the same trick again.

Rule of law abandoned

It is the European Commission (the guardian and enforcer of the treaty), together with the Eurozone voting majority in the Council of Ministers and the European Court of Justice, that can determine what exactly are our financial obligations to the EU in this context.

As we have already experienced with Article 122, there are a range of elastically-worded articles in the treaty that are open to any self-serving interpretation the key EU bodies wish to construct. The rule of law simply does not apply in Brussels in any meaningful sense. So long as we are EU members, these unaccountable EU institutions will continue to enjoy supreme legal authority over ourselves and the other peoples of Europe.

Brussels is currently putting together a new package of measures designed to extend the degree of control the EU elite has over its subordinate entities. "Governing these very vast and equally diverse economies with a single currency is more of a challenge in a union of sovereign states than in a political federation," Jean-Claude Trichet, the ECB govenor, commented in a recent speech. "That is the reason the European Central Bank is stressing tirelessly the necessity of strongly reinforcing the euro area economic governance."

'Economic governance'

One plan is for all governments to have to submit their annual budget proposals to the unelected European Commission for approval before they are shown and voted on by national parliaments. Brussels also wants to start taxing all EU citizens individually.

The EU elite appreciate that it is going to be very hard in future to persuade member governments to keep increasing their national annual contributions. Herman van Rompuy, Jose Manuel Barroso, Trichet and the others are commendably open about the need now to complement monetary union with fiscal union.

When opponents of the euro predicted this would eventually have to happen, they were derided by the likes of Ken Clarke and Chris Huhne as hysterical scaremongers.

The notion that Britain, Denmark and Sweden will be able to absent themselves from the forthcoming financial and political drives to save the euro from collapse is therefore naive in the extreme. The full insanity of having established a European single currency in the absence of an already existing unified, Pan-European people prepared to support it with their taxes is now self-evident.

Jacques Delors and the other fanatical architects of the Eurozone believed that once they had set in stone the single currency everything else, by some functionalist magic, would fall into place. According to the EU-state-builders, the governments of the member states would then tamely accept the logic of the situation and agree to hand over ever more political powers concerning economic policy to Brussels, the business cycles of the diverse national economies would miraculously converge and the different European peoples would organically merge into one collective consciousness, complete with new sense of political identity and loyalty.

Germans would then not mind, so the theory went, being taxed to help out other parts of the Eurozone, any more than they currently object to having their contributions redistributed to other parts of the Federal Republic.

Silver lining

This scenario, of course, was a total and utter fantasy in the minds of some members of the political elite and, like the other authoritarian, grandiose political fantasies from the European past, has extremely dangerous implications for the ordinary citizens of our continent; the people who really have to live with the consequences.

The inevitable eventual collapse of the Eurozone will have unpleasant consequences for all European economies and beyond. However, the silver lining is that the EU in its current undemocratic form cannot survive. The problem though is that its collapse, or transformation into a much more diluted form, could be drawn out over a number of years.

As we are seeing, the EU political class will do everything possible in the short to medium-term to resist the inevitable and will throw huge sums of public money at a problem that is beyond their power to solve.

The imperative for the British people must now be that we minimise for ourselves the damaging implications of this disintegration and get the hell out, quick.

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written by Marc Glendening

Britain still vulnerable to euro crisis

by Marc Glendening

British taxpayers risk losing £8 billion if, as many are now predicting, Greece defaults on the EU/IMF loan in which we were forced to participate back in May last year.

Britain has being sucked into the current crisis affecting the eurozone under Article 122 of the Lisbon treaty, which was passed without the democratic consent of the electorate despite a referendum being promised by all political parties.

This article allows the EU Council of Ministers, by qualified majority vote, to provide collective assistance to a member state hit by "natural disasters or exceptional occurrences beyond its control...".

However, through a highly elastic and convenient interpretation by the EU elite, the clause is now being used to force countries outside the single currency to bail out those countries that have run into financial trouble.

It is effectively being used by the EU to help itself to billions of pounds of taxpayers' money - even from those countries who have chosen to remain outside the euro - to prop up their fundamentally flawed single currency project.

"Regrettable" billions

Back in November, the House of Lords Treasury spokesman Lord Sassoon described the way Article 122 had been twisted by the EU as "regrettable".

With £8bn on the line, this must surely be a strong contender for the title of understatement of the year!

In reply to a question from Lord Pearson on 22 November, Sassoon said: "It is clearly regrettable that articles of the European Union treaty, such as Article 122, which should have been used for such things as natural disasters, has been enabled to be used for a mechanism in which the UK was committed to be a contributor by the previous Government."

With Portugal, Belgium, Spain and possibly Italy still facing major economic problems, and many now seeing eventual debt default by Greece and Ireland as inevitable, British taxpayers are facing huge potential liabilities.

Government weakness

In a belated bid to shut the stable door and end Britain's financial vulnerability to the euro's flaws, David Cameron in December sought a "political commitment" from EU leaders that Article 122 would no longer be mis-used in this way.

However, the best he could achieve was an exemption for Britain once the new European Stability Mechanism is created via a treaty change - in 2013. Yet there may be plenty of bailouts between now and then!

Should both Portugal and, more seriously, Spain need financial assistance, it is estimated that Britain's liability under Article 122 will be £16 billion and David Cameron has effectively confirmed that his government is completely powerless to limit this.

Criticising his party leader's actions, Douglas Carswell, the Conservative MP for Clacton, said: "This latest failure shows the futility of the government's position. Unless it is willing to challenge the premise of EU membership and the terms on which we signed up, it can never get its way," he said. "The government is utterly impotent."

Referendum needed

The British people never consented to join the euro and yet we find ourselves having to risk billions of pounds to help sustain that dysfunctional system.

This is why we must have a referendum to decide whether or not we want to be bound by Article 122 and all the other provisions of the Lisbon treaty.

The only referendum that makes any sense now is one on whether we want to accept full EU political union or a new relationship based on trade and voluntary ad-hoc co-operation.

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written by Marc Glendening

EU taxation without representation coming your way?

by Marc Glendening

The European Commission last week revealed that it is pressing ahead with its plans to gain more powers of direct taxation over the citizens of EU member states.

On October 19th it announced (pdf) its desire to be able to levy taxes relating to greenhouse emissions, financial transactions, air transportation, energy or company profits.

The EU desperately needs more cash to help sustain new agencies that will exercise its extended range of powers introduced by the Lisbon treaty.

In addition, the crisis being experienced by the Eurozone countries means Brussels needs to build a much larger treasury so that significant transfers of money can be made to countries such as Greece that fall into difficulty.

We opponents of the idea of a single European currency have always warned that monetary union would necessitate fiscal union. As usual, we were accused of hysterical scaremongering and inventing threats that did not exist by the likes of Peter Mandelson, Chris Huhne and Ken Clarke.

This initial drive for new tax-raising powers follows Herman Van Rompuy's speech on the eve of his non-contested appointment in November 2009 as the organisation's new permanent president, when he declared that one of his main objectives was to enable the Brussels elite to by-pass national governments and come directly to us as individuals for cash.

He said that a good way to get the ball rolling, no doubt because of its potentially populist appeal, would be with a 'green fiscal instrument' though in time other types of tax would come into play.

Van Rompuy's speech was music to the ears of EU-centralists such as Andrew Duff, the Liberal Democrat MEP and president of the Union of European Federalists.

In response to the president's speech he said: “He is a federalist and federalists believe in that approach. We have got to have a reform of the financial system. We have also got to grow the size of the EU budget to reflect the growth of competences that are in the Lisbon treaty, such as foreign and security policy, a common energy policy and climate change measures.”

The EU is frustrated by having to go cap in hand to the governments of those nations that are net donors to its budget, who help sustain the whole edifice.

The realisation among the Brussels elite is that it is going to be very difficult politically in the years ahead to persuade the German, British and Dutch governments - the principal contributors to the budget - to keep squeezing their taxpayers.

Everything would be so much easier for the EU if the Commission, which doesn't face public election, could levy its own taxes without fear for the electoral consequences.

The EU is facing an existential moment: It needs to step up a gear and move towards full fiscal union if the euro is to be saved. The stakes are now very high, both for the EU-centralisers and those of us who seek a Europe of democracies. If the former get the powers and financial resources they seek, the unified, centrally run state they seek will become a reality.

However, achieving these prizes involves the EU elite having to run the massive risk of coming out of the political shadows and making its impirial ambitions more and more apparent to the peoples of Europe.

Until now the very obscurity and tedium-inducing complexity of this parallel system of power has enabled the political classes of the member states to keep transferring new powers to it, away from their own parliamentary systems.

The granting of direct tax-raising powers may prove to be the EU's own Boston Tea Party moment. If the peoples of Europe rally to block such an extraordinary transfer of power and funds it is difficult to envisage how the EU can survive in the long term.

As the old saying goes: 'Be careful for what you wish'.

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written by Marc Glendening

Greece's path out of the eurozone

Never quite believed it until today. The markets can see it. The EU seemingly hasn't quite accepted it. But Greece is on a path heading out of the eurozone.

The prospects for the EU's embattled currency have worsened considerably in the last couple of days. First Greek debt was further downgraded to junk status and then it emerged that its problems are causing a loss of debt confidence for other eurozone countries.

Both Portugal and Spain have suffered new credit status downgrades and the OECD secretary general went so far as to describe the potential for contagion as 'like ebola'.

Markets and politicians once thought that the banks were too big to fail. Now it seems they are starting to realise that they have made the same false assumption about the euro.

Fears confirmed

The continued testing of the sustainability of Greek debt shows how market suspicions have lingered that the much-promised EU-IMF bailout was all for show, announced in the hope that real action would not be needed.

Those suspicions have only been reinforced by the German Chancellor, Angela Merkel, yesterday making it clear that, despite the precarious situation, discussions about the Greek cash injection are going to continue for several days yet.

One of the EU's plethora of 'presidents', Herman van Rompuy, perhaps feeling a little neglected from this process, has even been talking about an 'emergency' summit. But not until 10 May.

Standard, slow-moving EU - far too slow for the 21st century world.

The empty reality behind the EU's currency-without-government is nothing new to EU-watchers, but the real surprise is that the markets have bought the euro charade for so long.

Bailout blocks

That the markets have had little faith in the EU's words about backing Greece and have continued to test the situation can be no surprise, given the number of obstacles in the path to Greece avoiding a debt spiral and default.

First, for the eurozone countries to approve their €30bn share of the bailout (the further €15bn coming from the IMF) will involve many already themselves struggling with high debt, sluggish economies and bad-tempered public stumping up large sums for Greece.

This will only worsen others' debt problems, hamper economic recovery and cause further public unrest.

Second, as many are warning, the initial €45bn may buy Greece time but that amount will be far from the end of the financial support the country will need. Is there an appetite elsewhere in the eurozone for further bailouts and larger amounts in the future?

Third, even if the EU - propped up by the IMF - finally agrees to hand over the cash, the accompanying demands for further drastic cutbacks in public spending in Greece are likely to be so stringent that an already distressed and protesting public will not accept them.

Greece's umbrella private sector union, the GEEE, has already called a general strike for 5 May to protest against the "neoliberal extortion and demands [of the EU and IMF] to flatten the financial and job rights of workers" and other major unions have agreed to join in.

Fourth, there seems to be a clear case that the eurozone cash injection for Greece would breach the 'no bailout' clause in the EU treaty - a legal situation that a group of German professors are threatening to test, if the bailout is approved.

An injunction from the German Constitutional Court would freeze all aid for Greece while the case is pending, which may take weeks or months.

Finally, in any case, is Greece's total debt burden now too high for cash injections and such 'internal deflation' methods to restore competitiveness? Many are coming around to the view that a debt spiral is already underway and billions injected now would be just throwing money away.

Final shot

Only the fact that French and German banks are up to their eyes in Greek debt suggests the EU's bailout efforts will continue to the bitter end.

The EU's final shot at calming the market may involve offering far larger amounts than the present €45bn - amounts that may be seen by the markets as offering a more realistic long-term solution for Greece.

But in the absence of major IMF involvement - a situation against which the EU has a pompous, ideological objection - doubts will still linger about the capacity of eurozone countries to afford, and to deliver politically, such levels of cash.

Greek choice

What becomes clear from looking at the questions and obstacles above is that Greece is out of options other than default or voluntary, Uruguay-style (pdf) debt 'reprofiling'.

The key question for the euro comes in the implications of this outcome for economically connected countries, especially those sharing a currency.

Ireland has already felt the implications of currency connection, seeing their borrowing costs rise so far by €3m a year as a result of the Greek crisis. Greece is already dragging the eurozone down with it.

Worse, unless there is a clear isolation of Greece from the eurozone, it's hard to see how a restructuring of Greek debt will avoid knocking the confidence of buyers of other eurozone government bonds, provoking even bigger crises in other already finely balanced economies like Spain and Portugal.

The question that the EU and IMF may be struggling with, that is taking them so long to resolve, may be: might the billions of Greek aid on the table be better spent backing a 'new drachma' and curbing inflation - giving the country's economy a real competitive boost - than trying fruitlessly to ward off an inevitable debt default?