Imagine a door-to-door salesman comes to your house one day to try and sell you a burglar alarm by telling you about the terribly high crime rate is in your area. You’re not convinced, so you tell him you don’t want one. A little while later that same salesman breaks into your house, nicks the TV and does a crap on the sofa.

Now replace “door-to-door salesman” with “David Cameron”, “your house” with “France” and “burglar alarm” with “financial transactions tax”, and you’ve pretty much summed up our government’s attitude to attempts to rein in the forces of global finance.

This was Cameron speaking a few months ago (bolded text my emphasis):

The danger, we have always believed, is driving transactions to a jurisdiction where it wouldn’t be applied. So a global tax would be a good thing, but in Britain also we have put in place stamp duty on share transactions, a bank levy.

…and this was him this week:

Boris Johnson and David Cameron today urged French bankers to quit Paris and move to London in a dramatic escalation of a row with the French president.

The Mayor joined the Prime Minister in calling for traders to escape Nicolas Sarkozy’s plans for a financial tax by setting up business in the Square Mile.

Mr Johnson said: “Bienvenue à Londres. This is the global capital of finance. It’s on your doorstep and if your own president does not want the jobs, the opportunities and the economic growth that you generate, we do.”

Hours earlier Mr Cameron condemned Mr Sarkozy’s plans for a new financial transaction levy. Speaking at an EU summit in Brussels, he stressed that the new tax could cost the EU half a million jobs.

He added: “If France goes for a financial transactions tax, then the door will be open and we will be able to welcome many French banks to the United Kingdom.”

So, in November you have Cameron telling us that of course a tax on bank transactions is a lovely fluffy idea, which we’d be only too happy to implement if only we could, but you see it just isn’t possible because all those nasty banks would move their operations abroad if we did that, and we don’t want that, do we? Then this week, he explicitly invites those very same nasty banks to move from France to the UK so they don’t have to pay the transactions tax which Sarkozy is threatening to bring in.

Cameron, in short, is explicitly trying to bring about the very thing which he previously said would make a transaction tax untenable, despite ostensibly supporting such a tax in principle. Which, perhaps not surprisingly, suggests rather strongly that his original commitment to it was somewhat less than whole-hearted. Whether this also applies to Cameron and the Conservatives’ attitude to other redistributive taxes is something about which I leave the reader to draw their own conclusions.

This is a guest post by Natty

As we all struggle to grasp what David Cameron’s veto in Brussels last Friday actually means, one theme continues to re-emerge. Indeed it’s a theme that has emerged time and time again in the history of British politics. When asking ourselves why the PM decided to ostracise the British economy from 26 other EU countries, of which we do over half our trade with, one answer stands out above all others; The City.

This was not simply some principled stand by an aristocratic leader with frankly aristocratic views of Britain’s place in the world, although Cameron’s ‘defiant’ post-match analysis did betray such a worldview. Neither was this a weak PM caving into his Europhobic MPs. Instead Friday morning’s events were an archetypal case of the financial hub of British capital, and one of the financial hubs of world capital, exercising their veto.

All 27 European leaders in Brussels knew this. Sarkozy explicitly (and by some reports expletives were used) made it clear to Cameron that several of the safeguards and protections The City had enjoyed for decades would be dropped if Britain were to retain their already awkward place in Europe. Commentators are now painting the picture of a ‘two-track’ Europe, although a multilane highway may be a far more accurate analogy.

Cameron’s use of the ‘veto’ has clear implications on the UK’s trade and diplomatic relations with what we can now more than ever demarcate as ‘Europe’. However the veto also conveys what the Coalition government believe a recovery in our economy should look like. Despite sound bites suggesting an economic recovery based on growth in manufacturing [note Obsorne’s ‘march of the makers’] it seems that productive capital will yet again play second fiddle to The City. It is here where the Government is hoping growth will arrive and the money to cut the deficit will be found. Cameron’s veto was not only a diplomatic gamble, but also an economic one.

But what do we mean by The City? Well for one thing its no longer a ‘square mile’ geographically, with many banks and all London offices of the big three rating agencies based in Canary Wharf. The financial core of The City consists of the Bank of England, Merchant Banks (the traditional trading houses and newer investment banks), Clearing Banks (you’re everyday high street banks) and the London Stock Exchange. Obviously despite their interconnectedness, to completely homogenise the interests of such a diverse range of institutions is a simplification. They can however be impressively cohesive in advancing their cases on capital controls and tax regulation to government.

Indeed The City have historically counted the Treasury as close friends in these battles, consistently supporting the role of The City as a global hub of financial transactions. Their help has historical foundations in the civil service’s sense of imperial entitlement that Cameron himself expressed on Friday. The relationship between the Bank of England and Government has been crucial too. In the mid 1960s the Bank’s chief Lord Cromer explicitly told Harold Wilson that his much-vaunted plans for industrial modernisation were to be curtailed in order to retain the position of sterling as a world currency. Wilson backed down. In 1947 Clement Atlee was forced to make a very similar decision by the Treasury. This is not to say that what many term ‘productive capital’ have starved over the last hundred years; they clearly haven’t. But as far as the direction of the British economic policy goes, with a few short exceptions, its been the financial hub who have been in the driving seat.

Clearly Cameron’s desperation to protect The City has short-term benefits for the ‘Square Mile’. But some commentators are already arguing that in the long term it may hasten its demise. The City doesn’t always follow their long-term interests and regulations from Europe may still arrive. Many merchant banks opposed the ‘Big Bang’ deregulation of the 1980s, and already some are pointing to the powerful enemies in Europe and elsewhere the British have made. Given the speed at which EU institutions work there will be the time, if not the political will for U-turns. History tells us whatever happens those in The City are up for a fight. And for the coalition government, we now know that they need The City to win big.

The European Union, in pursuit of an austerity agenda supported only by the elite, has now effectively suspended democracy in two European countries. We have now, within the space of a week, entered the age of the Technocrat government (described brilliantly by one writer in The Times as ‘a form of civilian junta’). It is unclear when this new era will be behind us.

Yesterday’s Independent provided an excellent and very worrying analysis of the extent to which Europe’s technocratic elite are almost a subsidiary of Goldman Sachs, providing yet more evidence – as if we needed more – that the austerity project is being carried out for the benefit of financial institutions. (“The [Goldman Sachs] Project is to create such a deep exchange of people and ideas and money that it is impossible to tell the difference between the public interest and the Goldman Sachs interest.” Read the full thing here: http://ind.pn/snfaQ7).

This is not simply an attack on democracy in the form of the suspension of the democratic process, but the destruction of any relationship between public opinion and government policy. The concerns of Europe’s citizenry – mass unemployment, public services, pensions etc. – will not be addressed until Europe’s financial interests start to share these worries, an unlikely contingency.

What I want to ask is: why is support for this institution still considered progressive? It doesn’t matter that many of the arguments against the European project are often cogent, reasonable and progressive; there remains a nagging feeling that its still all a bit too UKIP. The assumption remains that to be pro-Europe is to be a good progressive type with the correct opinions, whereas to oppose the EU makes you a reactionary Little Englander.

This makes little sense when you look at the politics of other European countries in which the assumptions are the exact opposite. Both Sarkozy and Merkel represent the main conservative parties in their respective countries. In Scandinavia, the tradition has always been protecting the institutions of social democracy from encroachment by Brussels. It is almost as if our politics concerning Europe are the wrong way around.

The case used to be made that even before we begin to argue about fishing quotas, butter mountains, sovereignty or the CAP, we had to concede that the European Union has been a bastion of peace and stability for the continent after the horrors of the Second World War. It is an argument with which I had much sympathy. But is it not now perfectly clear that the European elite, by bypassing democracy and condemning millions of European workers to years of austerity, threatens that very stability? The EU may once have protected peace in the continent – it is now its principal threat.

Well, my friends, the suspension of Greek  democracy appears to be complete. When Papanderou was forced out, to be replaced by a government of national unity. I remarked:

Greece’s multi-party democracy has in effect been supplanted by one party – The Austerity Party. The political elites have, in effect, formed a cartel. Greece’s major parties imagine that they can force through the huge austerity package without facing the wrath of the electorate – just as long as they all in on the game

But even a few days ago, I did not grasp quite how far the shelving of democracy would go. I imagined that, at the very least, the National Unity government would be made of people whose parties had actually won some votes at election time, and who were planning to stand for office again. Not so. Meet Greece’s new Prime Minister, Lucas Papademos, former Vice-President of the European central bank.

“I am not a politician” he announced yesterday. Well no, he certainly isn’t. Politicians are people who have to do a whole lot of dreary things, like making themselves known to the  public, winning their confidence and standing in elections. Papademos, by contrast, has never stood for public office. He has assumed his position purely on the strength of his career in banking, and in particular his connection – via the ECB – with Europe’s political and financial establishment.

Neither does he intend to stand for office in the future. His sole function will be to ensure that Greece impoverishes its citizens enough that it can keep the interest payments flowing to Europe’s major banks. He will preside over the most important political and economic decisions that have faced Greece since the 1970s. And will be to do so without worrying a jot about the opinions of those who will have to live with his decisions – i.e. the people of Greece.

For Papademos, this is probably a fine way to cap to his grand career. He better just hope that he doesn’t find himself on the wrong end of a revolution. After all, the only democracy that exists in Greece today is on the streets of Athens.

To contact Reuben email reuben@thethirdestate.net

A week can be a long time in the debasement of politics. Just last Sunday, Prime Minister Papandreou appeared to salvage a smidgeon of honor for his government, when he announced that the Greek people would be given a referendum on the austerity-bailout package. For two years the Greek people have struggled with mounting pain yielding only negative gain – as repeated austerity programmes, and Greece’s continued membership of an over-valued Euro, conspired to stymie growth, and hence the country’s ability to pay back its debts. Now the people would get a chance to decide whether they wanted to continue down the same path.

Papandreou said some fine words about “patriotism” and “democracy”. Yet it soon became apparent that he saw the referendum not simply as a means of giving people the say, but also as a means of evading political responsibility. A few days later he announced that he would scrap the referendum plan, if the opposition agreed to support the bailout and carry it out with him. Both this proposal, and the proposal for a referendum, served a similar function – namely to ensure that he and his party would not be held responsible for the decisions they made.

Nonetheless, he had brought the demos a little too close for comfort. Papandreou was humiliated at the G20 by the presidents of Europe’s creditor nations. The European bureaucracy swung into action, and bankers – knowing that the bailout-austerity deal was vital to protect their assets – announced that the referendum proposal wouldn’t fly.

This evening Papandreou’s premiership is no more. He has been forced out and his premiership will be replaced by a “government of national unity” which carry through the bailout. Greece’s multi-party democracy has in effect been supplanted by one party – The Austerity Party. The political elites have, in effect, formed a cartel. Greece’s major parties imagine that they can force through the huge austerity package without facing the wrath of the electorate – just as long as they all in on the game. The direct democracy of a referendum was shelved, and now representative democracy – the system by which politicians take decisions and are held to account on election day – has been short circuited.

While Greece represents the most extreme end of the European situation, the pushing aside of democracy, at this moment of crisis, is undoubtedly a Europe-wide phenonemon. All 16 of the Eurozone countries are busily preparing to sign a Fiscal Stability pact. Under its terms, crucial, and deeply political decisions about taxation and spending will be taken out of the control of elected national parliaments and hived off to an unelected European bureaucracy. Apparently this is necessary for “stability”. It is no exaggeration to say that what we are witnessing is the biggest diminution of democratic power in Europe since the 1930s.

To contact Reuben email reuben@thethirdestate.net

There are serious tensions building up within the Conservative Party ahead of tomorrow, as MPs prepare on whether Britain should have an in/out referendum on the EU. Cameron has whipped has MPs to vote against it, and the possibility of a minor rebellion has generated numerous column inches. However most commentators have failed to grasp what these intra-conservative tensions are fundamentally about.

According to some accounts this is an insurgency by the Conservative right. Certainly there is a hardcore of traditional Tories who feel deeply alienated from Cameron and Co’s metropolitan clique. Yet despite the huffing and puffing in the Telegraph, Cameron is not the Conservative Party’s Tony Blair. The “modernisation” of the Tory Party has been very much a cosmetic job, and Cameron and Osborne have made no serious attempt to pull the party’s politics towards the centre. Equally flawed is the tendency in the Liberal press to frame this as simply a repetition of previous conservative squabbling over Europe. Back in the early 1990s the were a number of serious, ideological Europeanisers at the top of the Conservative party – think Michael Heseltine, or indeed Geoffrey Howe, whose resignation over the government’s failure to follow a sufficiently integrationist path lead to the fall of Thatcher.

This is not, in any sense, true today. The Conservative ministers holding the line against their Eurosceptic bankbenchers are themselves a heavily Eurosceptic bunch – not least David Cameron. The tensions we are seeing arise not from a clash between different ideological wings of the conservative party, but from a dissonance between the ideology of the Conservative party, and the politics Conservative government.

Throughout most of the 20th century, the Conservative party has been the primary representative of the interests of British business, and, in turn, has generally won its backing. Yet, having a political life of its own, the Tory party has never been a perfect vehicle for the interests of the business class. This is partly because, while the interests of business are liable to change over time, politics is not simply a matter of turning one tap off and another tap on. There have been periods in which fiery patriotic rhetoric – of the kind we may see from the conservative backbenches on Monday – deeply suited the interests of capital. The word “jingoism” arose at the turn of the 20th century, as the conservative government was firing up up hundreds of housands of ordinary Brits to fight and die for the gold and diamond mines of South Africa. More recently, Margaret Thatcher leant heavily upon the rhetoric of “making Britain Great” in order that the destruction of many people’s living standards could be reframed as sacrifices made for the sake of national salvation. Meanwhile, across the 19th century and into the 20th, the Tories made a point of fetishising Britain’s ancient constitutional machinery in order to stem the tied of democracy – again something that will feature in tomorrow’s debate.

Given the party’s philosophical baggage, it is not surprising that its activists, its Parliamentary party, and its leadership display an instinctive antipathy towards the European project. But here’s the rub. The party relies on the backing of big business, and, like any government in capitalist economy, relies on the acquiesence of corporations in order to get things done. And a desire to get out of Europe is utterly incompatible with the party’s crucial relationship with corporate Britain.

Despite the delusions of some on the liberal left – who see the EU as nothing more than a cuddly internationalist project – it is in no way surprising that the FT has consistently taken a ridiculously integrationist stance on Europe. Britain’s major corporations have little to gain and a great deal to lose from British withdrawal from the EU. Not only does the current situation grant them a huge open market. It also enables matters like the EU-India FTA – wherein the working class stand to take a huge hit for the benefit of the investor class – to be hived off beyond the reach of democratic institutions. Moreover it grants British business unfettered access to enormous reserves of cheap non-British labour (an uncomfortable truth for us lefty internationalists, but a truth nonetheless). In other words, British business would not countenance a decision to put Britain’s relationship with Europe in the hands of the mainly Eurosceptic public.

Cameron gets this. As the leader of business backed party, and as a Prime Minister who relies upon the co-operation of business, he knows that a referendum on the EU is not an option. Yet, it appears that these realities are less prominent in the minds of those lower down the conservative food chain. Thse people are less invested in conservative government, and for them the trade-off between politics and strategy is rather different. And so tomorrow we will se the manifestation of tensions inherent in the Tory party’s relationship with business. Yet the possibility of the British people actually being given a say over how they are governed remain as slim as ever.

To contact Reuben email reuben@thethirdestate.net

Am I about to go through a momentary lapse of patriotism? No, don’t fear – no heartfelt conversions to the EDL yet. But there are things that are being said and happening in Britain which make it more likely to see revolt than in many other European countries.

1) We’re Not Taken To Revolting

Time and again, people say ‘if only we were like France.’ Well, they’re still going over there, and Sarkozy doesn’t seem to be easing up. The streets are blockaded, the unions are fervent – but they’re still negotiating about the pension age. The problem is, the French electorate and the French government are both so used to thousands of people marching with placards, to cars set on fire in the Banlieue, to unions beating their chests in revolutionary tirades, that it all seems a bit like a rerun. Oh, here’s 1848 again, the papers say – and we know how that ended up.

In Britain however, there’s no such problem. The TUC have gently called for a march on March 2011, scuppering any idea that we can get complacent about rebellion. Similarly, I keep reading articles saying ‘the British don’t revolt, we just get on with it.’ Well, isn’t it going to seem that much more rebellious when we finally do all take to the streets?

2) We Have a comparatively free press

Note the word comparatively; if you don’t believe me, check out Italy. Berlusconi and the mafia have the whole thing tied up – and it shows. The papers proclaim the latest TV sensations without a reference to the plummeting economy, and any information on the riots in the South is almost impossible to come by. At least we have the BBC and the Guardian which, for all their faults (which are many), are reporting what the Coalition government is up to.

3) We Don’t Praise Our Politicians For Saving the Country

In Germany, there’s a wave of praise for Angela Merkel, the woman who has single handedly reversed the German economy out of the slump. The German government is being praised for a deft handling of the situation, and also the national German spirit which is more prone to saving than borrowing. There’s also an idea that small businesses have saved the German economy, exporting high tech goods and patents. No asking about, say, the actual wealth creation by millions of Polish, Turkish and Central European citizens who actually do all the shitty jobs in Germany. So while Deutschland rejoices in a reversed economy saved by politicians and businessmen, we’re quite aware over here that those same groups are currently running the country into the ground.

So there we have it. Marx said that the revolution was most likely to come in the most industrialised countries: England and Germany. We’ve struck Germany off the list for its insistence on Merkel’s abilities at the wheel of the economy, so that leaves us: let’s hope our passion for hopelessness sees us through.

Democracy in Britain leaves a lot to be desired – like actual democracy, for example. Governments secure unconscionable power with 33% of the popular vote; parties run multi-million pound election campaigns, ensuring they owe some millionaire or business, something, sometime; the anachronism of the constituency MP is still firmly in place and not going anywhere – I could go on.

But we should recognise what’s of value in our political system, and I can think of nothing more valuable than Prime Minister’s Question Time (PMQs) and the adversarial zeal that it epitomises.

Think of it. The PM has to stand before the dispatch box, in front of a crowded chamber filled mostly with political enemies, and face half an hour of questions for which no preparation can really be taken. We can boot these people out of power with little pencils on strings once every five years or so, but the public standing of a PM can be destroyed by one bad performance (as they well know). Harold ‘Supermac’ Macmillan, that unflappable Tory, recounted in his memoirs that he would often have to pop to the gents’ to vomit with nerves before a performance at PMQs; a First World War veteran, he compared the experience to ‘going over the top’.  Who doesn’t want the PM to experience that kind of terror on a weekly basis?

The principal value of all this is that it makes the holding of the executive to account worth watching. This is something remarkable and very rare: compare those theatrical half hours on BBC Parliament with the legislative processes of most other countries, and you’ll see that this needs defending. Most European countries have hopelessly dull, ‘consensus’ – based affairs to sit through, and the goings on in the houses of America’s Congress could almost have been designed to make the savvy American voter change the channel.

C-Span, America’s main public service broadcaster (and a phenomenal aid to democracy and transparency in the US) broadcasts this half hour live to an American audience; it is one of its most popular shows. We can all feel rigid with pride thinking of Americans, living in a country racked with infantile consensus politics, sitting in their living rooms thinking, ‘Why don’t we have this?’ Image the chimp-president George W Bush subjected to this treatment for eight years. (Footnote: Proposals for an American Question Time, on the British model,  have been suggested since the days of Abraham Lincoln. Indeed, it was a little commented upon electoral pledge of John McCain, though sadly far outweighed by his choice of an illiterate demagogue for running mate).

PMQs, and the adversarial nature of Parliamentary proceedings in general, have their basis in a very British form of public culture, which has been termed a ‘boisterous democracy’. We argue in pubs, argue in our courts, argue in the street. We gravitate towards writers who don’t give a shit and have a sturdy tradition of ‘English Troublemakers’,  as A.J.P Taylor called them, who stand at the back and shout ‘Shame! Rubbish!’ at elected heads of state. Let the yanks make soothing noises about ‘bi-partisanship’, their Congress is boring.

Nigel Farage (a degenerate righty, I know) exported a bit of this spirit when he confronted our European overlord, Herman van Rompuy, in the EU Parliament. I’d encourage you to watch the short video below, and feel proud:

Nigel Farage harangues EU President Herman van Rompuy

Look how the Dutch-speakers boo and hiss!

Here’s one of the great parliamentary performances of the late Michael Foot, berating the then Industry Secretary Keith Joseph:

Michael Foot\’s Magician

This tells you all you need to know: in British political culture, it is quite acceptable for an MP to publicly humiliate a member of Her Majesty’s Government, providing the flowery language is kept to and some wit is on display.

Here’s the paragraph about how this wonderful thing is under threat: John Bercow – a lurid misogynist as it happens – has stated that the ‘abusive’ nature of PMQs needs revising. From the BBC website:

‘Mr Bercow…suggested the prime minister and opposition leaders of the day agree a “common understanding of behaviour” among their MPS, enforced by the whips, which would allow the Speaker to operate “the parliamentary equivalent of yellow and red cards…if that were to prove absolutely necessary” [My emphasis]‘

Never mind the fact that members can already be suspended for failing to keep to protocol; never mind the fact that this would constitute a great increase in power for the already over-powerful whips; and never mind the fact that the drama of PMQs  - in particular watching two grown men insult each other in fancy language – is its main appeal. David Cameron talked about ending the ‘Punch and Judy politics’ of Westminster: you know what a slimy bastard this man is when he references one quintessentially English institution to attack another. Swine.

On Tuesday the Guardian printed a fascinating and excellent piece by the philosopher Etienne Balibar. Unfortunately they chose to give it the slightly misleading title “Europe is a dead Political Project“. In fact Balibar argues that the European Union, it’s currency, it’s government and its technocrats, is looking doomed, but that this urgently poses the need for a new European civil society, built from the bottom up:

Does this mean that, in order to reverse the course of recent history, to shake the lethargy of a decaying political construction, we need something like a European populism, a simultaneous movement or a peaceful insurrection of popular masses who will be voicing their anger as victims of the crisis against its authors and beneficiaries, and calling for a control “from below” over the secret bargainings and deals made by markets, banks, and states? Yes indeed.

Balibar’s call is timely. Such a movement is a necessity, and it is a movement that must be pan-European. Of course we must direct our fire at our own national states, solidarity begins at home; but we should do so in constant communication with movements in other countries. The first test is Greece. Can effective European solidarity with Greece be built that can overcome xenophobia and austerity?

One place where more discussion is required is Balibar’s mention of the social democratic parties of Europe, what he calls the left. He is certainly correct that they have “surrendered to the dogmas and rationales of neoliberalism”. In Greece they are the ones driving through the austerity measures, in Britain we have just ended 13 years of neo-liberal, third-way Labourism. However, it does not follow that  “it has lost every capacity to express social struggles or launch emancipatory movements”. This is a question that we are posed with sharply in Britain at the moment. Our traditional social democratic party has moved from government to opposition. We should not be at all surprised if they begin to more clearly express, and even launch, social struggles. This creates strategic questions for those who have long ago rejected these organisations that cannot be shirked by reminding ourselves of their past crimes.

Balibar’s piece is part of a debate on the European left that needs to happen. This debate itself won’t stop the austerity measures that Europe’s elite want to impose in every single country. However, it is important that there is a debate which can shape the form that resistance to these measures can take, and that can allow us to share experiences across borders. Small steps taken in that direction ought to become big strides as soon as possible.

Image: Euro Realist Newsletter/flickr

So…exactly how shocked should we be that the party that spends most of its time denouncing the EU as corrupt and undemocratic now has an unelected Peer of the Realm at the helm?