Sunday, 23 December 2007

EU Wine Markets: Europe’s Lilliputians Create Little Markets for Little Europeans

The European Union has never sufficiently grasped the concept of global markets – for a trading bloc whose whole philosophy is grounded in an exclusive low/no tariff arrangements between a specified number of European states, and thereby excluding states outside the bloc, it’s new wine reform package is no surprise. It confirms the principled framework of the European Union – that Europeans will trade amongst themselves in a heavily regulated and exclusive manner, at the expense and to the cost of those operating in the global market place. The wine reform will in fact, close the wine market to European states, not open them up (as the EU Commission and DEFRA have claimed).

Say goodbye to your Californian ‘Blossom Hill’! The practice of the Lilliputian Europeans in the EU, asserting tariffs and reducing them in global markets where it thinks fit (previously only major governing statutes of France and the Soviet Union), will, in time, massively threaten the global market for wine. The Commission’s guarantee that this package for wine reform will ensure "quality and competitiveness" in the global market place is short-sighted, wrong and wholly anti-competitive for those trading in the global marketplace. The reform has taken the markets from bad to worse – it has converted a hugely subsidised market and made it into an outright protectionist one, making the situation no better for the long-term.

The claims by Jonathan Shaw, a minister at the Department for Environment, Food and Rural Affairs, that "This is good news for UK consumers and producers …. It will rid the wine regime of its worst features, which discouraged innovation and encouraged surplus production that was disposed of at the European taxpayers' expense" are false statements, which will be proven wrong in the medium term future. This reform has closed the market to those outside Europe, and British consumers and producers will suffer as they realise that they are now economically isolated from the rest of the global wine market. It is the best example of Europe’s Lilliuptians creating little markets for little Europeans.

Friday, 21 December 2007

Oxford East – Where is Our EU Lisbon Treaty referendum?

James McConalogue (European Foundation, London): Five years ago on 24 January 2002, the elected Labour MP for Oxford East, Andrew Smith, told the House of Commons in a debate on the euro: “The five economic tests are clearly set out, and, as we have said time and again, it is our policy that it must be clearly and unambiguously in Britain's economic interests before we would recommend entry to Cabinet, to Parliament and in a referendum.”

Whilst I must congratulate Mr. Smith on his honesty in appearing to defend “Britain’s economic interests” and the need for parliamentary debate and a referendum to achieve agreement, I wonder if he would now support the democratic case for a referendum on the Lisbon Treaty which is clearly and unambiguously not in Britain's economic interests.

As with joining the single currency, this Treaty fundamentally alters the nature of the relationship between the United Kingdom and the European Union. Since this Treaty will change the nature of our relationship with the European Union – and even gives a definite provision for the future obligation that “the Union shall establish an economic and monetary union whose currency is the euro” [Article 2] – why is it now impossible to see that there must be a parliamentary debate, concluded with a public vote by national referendum, in order to decide whether this Treaty will take effect in Britain.

Given the need for Mr. Smith to maintain a small Labour majority of only 963 votes at the next election, I realise that the elected Labour MP for Oxford East must now feel compelled to remain silent on the Lisbon Treaty and the impact that it will have on his constituency. However, as an elected Member of Parliament, can Mr. Smith not see that by refusing to let the people of Oxford East have their say through a referendum on the Treaty, the call for democracy within the constituency and across the country will be sunk beneath the authority of unelected European officials. This is clearly undemocratic.

I can only assume, on his own terms, that the case for a referendum remains in the interest of British democracy and our national economic interests and to put it right, he must push for a referendum or better still, vote against the Treaty given its detrimental consequences for the democratic future of Britain. Any action to the contrary would surely make Andrew Smith unelectable at the next election.

Corby – Where is Our EU Lisbon Treaty referendum?

James McConalogue (European Foundation, London): In the not so distant past, on 8 December 2003, the elected Labour MP for Corby, Phil Hope, told the House of Commons that “…in drawing up a constitutional treaty for the European Union, the UK Government have throughout been a leading advocate both of ensuring that subsidiarity is properly enforced and of strengthening the role of national Parliaments in Europe.”

Whilst I must congratulate Mr. Hope on his honesty to espouse essentially pro-European ambitions and views as he thinks fit (although I disagree), I wonder if he still supports the same view now that the UK’s All-Party Parliamentary European Scrutiny Committee has concluded that this Reform Treaty is “substantially equivalent” to the Constitutional Treaty, that subsidiarity is not properly enforced and if anything, the Treaty places a legal obligation onto national Parliaments, including Westminster.

The solid democratic case for a referendum is based on the underlying fact that this Lisbon Treaty fundamentally alters the constitutional nature of the relationship between the United Kingdom and the European Union. Having realised the errors of those previous statements, will the MP for Corby now admit that the case for a referendum is compelling? I am concerned that he will not.

Given the need for him to maintain his small (1517) Labour majority at the next election, I realise that the elected Labour MP for Corby must now feel compelled to remain silent on the EU Reform Treaty – and of course the wholly negative impact this will have on his constituency. However, as an elected Member of Parliament, can Phil Hope not see that by refusing to let the people of Corby have their say through a referendum on the Lisbon Treaty (which fundamentally alters the nature of the relationship between the United Kingdom and the European Union), the call for democracy in this constituency and across the country will be sunk beneath the authority of unelected European officials. This is clearly undemocratic.
I can only assume, on his own terms, that the Treaty does not withstand the criteria he had previously set for it and that the case for a referendum in the interest of British democracy is compelling. Better still, he could vote against the Treaty given its detrimental consequences for the democratic future of Britain. Any action to the contrary would surely make Phil Hope unelectable at the next election.

Nottingham North – Where is Our EU Lisbon Treaty Referendum?

James McConalogue (European Foundation, London): Five years ago on 2nd December 2002, the elected Labour MP for Nottingham North, Graham Allen, told the House of Commons that by creating an EU Constitution, firstly “it would not have 40 or 50 founding fathers, as the United States constitution had, but several million founding fathers and mothers”, secondly “such a constitution would enjoy the support of the population as a whole” and thirdly, it “would have to be endorsed by the British people in a referendum.”

Whilst I must congratulate Mr. Allen on both his honesty to espouse his essentially pro-European ambitions and views as he thinks fit (although I disagree) and to recommend the use of a democratic referendum to reach an agreement, I wonder if he would now support the democratic case for referendum on the Lisbon Treaty which – like its “substantially equivalent” precursor, the EU Constitution – fundamentally alters the nature of the relationship between the United Kingdom and the European Union. It most certainly is not in the interests of Nottingham North to allow their elected MP to allow Gordon Brown to sign this country up to a Constitution for the ‘United States of Europe’.

I realise that the elected Labour MP for Nottingham North must now feel compelled to remain silent on the Lisbon Treaty – and of course the wholly negative impact this will have on his own constituency by averting a national referendum – given the need for him to win a sufficient majority at the next election. However, as an elected Member of Parliament, can Graham Allen not see that by refusing to let the people of Nottingham North have their say through a referendum on the Lisbon Treaty (which fundamentally and irreversibly alters the nature of the relationship between the United Kingdom and the European Union), the call for democracy in this constituency and across the country will be sunk beneath the authority of unelected European officials. This is clearly undemocratic.

I can only assume, on his own terms, that the case for a referendum is still in the interest of British democracy and to put it right, he must enable a referendum or better still vote against the Treaty given its detrimental consequences for the democratic future of Britain. Any action to the contrary would surely make Graham Allen unelectable at the next election.

Cossiga lashes out

The former President of Italy, Francesco Cossiga, has said that a recent audio tape in which Osama bin Laden attacks the former Italian Prime Minister, Silvio Berlusconi, as an American lackey, is a fabrication invented in the studios of Berlusconi’s own media company, Mediaset, in order to curry support for the tycoon as a potential victim of terrorism. “Circles close to Palazzo Chigi [the Prime Minister’s office], the nerve centre of the Italian intelligence services, point out that the fact that the tape is a fake is proved by the fact that Osama bin Laden ‘confesses’ that Al Qaeda was the author of the attacks of 11 September against the twin towers in New York, whereas all democratic circles in America and Europe, especially those of the centre-left in Italy, now know perfectly well that that disastrous attack was planned and implemented by the American CIA and Mossad with the help of the Zionist world in order to put Arab countries in the dock and induce the Western powers to intervene in Iraq and Afghanistan.” [Corriere della sera, 30 November 2007]

Agreement on Galileo system

After months of wrangling, the EU has reached a compromise on its planned satellite navigation system, Galileo. Two-thirds of the missing 2.4 billion euros will be taken from the agricultural budget, the remainder coming from the research budget and the competitivity budget. Germany had been opposed to financing it out of EU funds, which it wants to cap, and it feared that up to 500 million euros would have to come out of its national budget. A compromise was reached when Germany agreed to rules on tendering which are designed to ensure that German companies get a slice of the cake. The claim is that the money from the agricultural budget would have been unspent anyway, so no one is losing out. Money is also available from the CAP budget because food prices have risen and this means that less has to be paid out in subsidies.

The purpose of Galileo is to give Europe a navigation system which is independent of the American GPS system. The system will be composed of 30 satellites, and the system is supposed to go live in 2013, when it will have an accuracy of a few centimetres. The total cost to the taxpayer will be at least 3.4 billion euros. The EU states have also agreed on a 4.2 per cent rise in the EU budget to 120,346 billion for 2008. 285 million euros will be spent on the Common EU Foreign and Security Policy, 85 million more than originally suggested. One of the reasons for the rise is the police mission in Kosovo, which is to cost at least 160 million euros. [Frankfurter Allgemeine Zeitung, 25 November 2007]

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

Agreement on Galileo system

After months of wrangling, the EU has reached a compromise on its planned satellite navigation system, Galileo. Two-thirds of the missing 2.4 billion euros will be taken from the agricultural budget, the remainder coming from the research budget and the competitivity budget. Germany had been opposed to financing it out of EU funds, which it wants to cap, and it feared that up to 500 million euros would have to come out of its national budget. A compromise was reached when Germany agreed to rules on tendering which are designed to ensure that German companies get a slice of the cake. The claim is that the money from the agricultural budget would have been unspent anyway, so no one is losing out. Money is also available from the CAP budget because food prices have risen and this means that less has to be paid out in subsidies.

The purpose of Galileo is to give Europe a navigation system which is independent of the American GPS system. The system will be composed of 30 satellites, and the system is supposed to go live in 2013, when it will have an accuracy of a few centimetres. The total cost to the taxpayer will be at least 3.4 billion euros. The EU states have also agreed on a 4.2 per cent rise in the EU budget to 120,346 billion for 2008. 285 million euros will be spent on the Common EU Foreign and Security Policy, 85 million more than originally suggested. One of the reasons for the rise is the police mission in Kosovo, which is to cost at least 160 million euros. [Frankfurter Allgemeine Zeitung, 25 November 2007]

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

Merkel criticises Lisbon Treaty

Chancellor Merkel has said that the new Lisbon Treaty “has achieved some things” but that it is “obviously far from the clarity of our Basic Law, where competences are clearly defined”. She said that she would have liked to have seen greater emphasis on the Christian tradition in the Charter of Fundamental Rights.

On the whole, though, she said that she was happy with the treaty. “It will change a lot in the European Union,” she said. She said that she hoped that a conciliatory personality would be found to be the EU president, the new 2 -½-year post which replaces the old rotating presidency. [Handelsblatt, 5 December 2007]

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

Will Belarus-Russian Union now go ahead?

Elements of the Russian media are speculating that Vladimir Putin might stay in power after ceasing to become Russian President by becoming the President of a new Russian-Belarussian Union state. The Kremlin has firmly denied the rumours, which in fact emanate originally from the very anti-Putin radio station “Echo Moskvy”. It claims that the union state between Belarus and Russia is to be signed in Minsk on 13th and 14th December, after many years during which the project seemed to have run into the sands.

According to the rumour, Putin would be president of the common state, the current president of Belarus would become the President of the Union Parliament and Viktor Zubkov, the current Russian premier, would become Union premier instead. [Die Welt, 7 December 2007] A Kremlin spokesman has denounced the rumours as “speculative fantasies” and indeed it is quite likely that it is but another piece of opposition–generated desinformatsiya.

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

Albania wants to become a nuclear power

Albania is one of the poorest and most corrupt countries in Europe and the situation there is made addedly chaotic by the fact that the country suffers from an acute shortage of electricity. The capital city is plunged into a cacophony of generators, as there are now power cuts for many hours every day. This is mainly because when Bulgarian joined the EU it had to close down one of its reactors which used to export electricity across the Balkans.

But the drought this year has also meant that the country’s old hydroelectric generators do not work. The Prime Minister of the country, Sali Berisha, has now announced that he wants his country to have its own nuclear power station instead. He wants Albania to become “an energy superpower” and claims that various companies have expressed an interest. A power station would cost 3 billion euros, 50 per cent of the country’s GDP. [Jens Tönnesmann, Handelsblatt, 2 December 2007]

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

EU to regulate guns

The EU commissar for industry, Günter Verheugen, has told Die Welt Online that the EU wants to strengthen laws against gun ownership in order to restrict the circulation of illegal weapons. A directive is being prepared which would require all EU member states to introduce minimum standards for the control of weapons. “Arms must be subject to the strictest controls and they should be in private hands only under exceptional circumstances,” said Verheugen. The commissar said that any new directive would certainly change German law. The proposal is to store information on the ownership of individual guns for at least 20 years in a computerised data bank. This list would be open to prosecutors and the police. Weapons will also have to bear a registration mark indicating the place and date of their manufacture.

Any arms retailer will be required to keep information about the weapons he has sold for as long as he is in business, not just for five years as at present. He said that the law would also cover so-called convertible weapons which are not dangerous in themselves, but which can be converted into shotguns. “This is particularly a problem in Great Britain,” he said. Verheugen said that illegal weapons would henceforth be destroyed as soon as they are seized. Verheugen said the new law would be introduced in 2009. There will also be a European weapon pass, restrictions on which will also be tightened. Verheugen and others who support this new law have reminded people that there have been mass killings in schools (in Germany and in Finland) and that this is the reason why the new laws are necessary. [Die Welt, 29 November 2007]

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

Belgium’s death throes continue

Is this the beginning of the end of Belgium? The country’s protracted political crisis shows no sign of coming to an end and the country remains without a government, even though elections were held in June. The basic problem lies in the inability of Flemings and Walloons to agree on the division of powers within the country, and over recent years Flemish opinion has hardened against their Francophone compatriots and against the Belgian state generally. Now a small Flemish party, the New Flemish Alliance, has refused to join a coalition under the leadership of Yves Leterme, the (Flemish) Christian Democrat leader, because its leader, Bart De Wever, does not think that Leterme’s agreement on devolution of power to Belgium’s regions (i.e. to Flanders) goes far enough. Although Leterme campaigned and won on more power for Flanders, he has played this down as he seeks a Francophone coalition partner. The Walloons are generally hostile to any further decentralisation of power because they are big recipients of federal money. They fear that if the regions (i.e., in effect, Flanders) have fiscal autonomy, autonomy over corporate tax, employment policy and family policy, then the country will have, in effect, split into two.

The sticking point with the New Flemish Alliance is the social security budget, which the Flemings want to regionalise. This would put an immediate end to the massive gravy train which is the Belgian state and Wallonia would lose out heavily. Mr De Wever knows that Mr. Leterme cannot do without the five seats he has in the federal Parliament, and therefore he is being intransigent. He calculates that Leterme’s inability to deliver proves that, in fact, separation for Flanders is the only answer. [Jean-Pierre Stroobants, Le Monde, 28 November 2007] In the meantime, the caretaker Belgian government (composed of the same ministers who ran the previous government) has signed the EU Reform Treaty (the replacement for the defunct Constitution) even though the Belgian constitution forbids a caretaker government from signing any new international agreements while it is in office.

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

France struggling to sell Mediterranean proposal

France is trying to persuade its EU partners to adopt its idea of a Mediterranean Union which President Sarkozy launched during the presidential election campaign earlier this year and which he mentioned again in greater detail in a speech in Tangier on 23 October. However, at a debate organised in Paris on 26 November by the Heinrich Heine House and the College of Spain, German and even Spanish scepticism of the idea became evident. The French State Secretary for European Affairs, Jean-Pierre Jouyet, tried to demonstrate that Mr. Sarkozy’s idea fitted into the Mediterranean policy of the EU (known as the Barcelona process) arguing that it would complement and add to an insufficient policy.

The Barcelona process had been originally conceived as a akin to the Helsinki Conference of 1975 which was intended to bridge the gap between East and West during the Cold War, but Paris’ view is that it has not had the desired effect and the two shores of the Mediterranean remain as far apart politically as ever. Barcelona has also not contributed to an end to the Israeli-Palestinian conflict, as originally hoped. The French minister explained that Paris was interested to hear what other Mediterranean states thought of President Sarkozy’s proposal and that the basic idea is for the Union to be built up progressively, starting with a few states and then being enlarged to include potentially all states on the shores of the Mediterranean. Northern EU Member States which do not border the sea would be invited to have observer or associate status.

It is precisely this point which has elicited opposition from Germany. Jouyet’s German and Spanish opposite numbers, Günter Gloser and Miguel Angel Navarro, insisted at the debate on the importance of the Barcelona process and of the policy of good neighbourliness which, they said, are “integral parts of the EU’s policy” and something in which “all EU states are involved”. In other words, Germany and Spain are hostile to any undermining of the EU’s role by the new Union. They said that the problems of the Mediterranean were “common problems” which must be tackled together by all EU states and the common approach forms part of the EU’s overall common foreign and security policy. All 27 EU states had to have the same rights, they said. The Spanish minister said that Madrid was “always available where the Mediterranean is concerned” but it is obvious that France’s partners are sceptical about the need to invent a new organisation. [Daniel Vernet, Le Monde, 28 November 2007]

President Sarkozy heard about German scepticism towards the plan from the horse’s mouth when Angela Merkel, the German Chancellor, came to Paris to talk about it on 5 December. The two agreed to ask their sherpas to come up with an agreement which would associate all EU states to the proposed new union by the time of the Brussels summit on 14 December. But Mrs Merkel said that it would be “a difficult test for Europe” if states on the Mediterranean decided to create their own union, because the EU, including Germany, itself takes a strong interest in that region. [Henri de Bresson, Le Monde, 8 December 2007]

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----

Balkan tinderbox: West strikes a light

As expected, Serbs and Kosovo Albanians have failed to come to an agreement on the future status of the South Serb province during three days of negotiations which were billed as offering one last chance for a solution. The negotiations took place in Austria and ended without an agreement on 28 November. The stage is now set for a unilateral declaration of independence by Kosovo and possible recognition of this by the EU and the United States. The Western troops in Kosovo are preparing for war: the Albanians are well armed and everyone fears a renewed outbreak of violence. President Václav Klaus of the Czech Republic told the Serbian President, Boris Tadić, in September, that any such recognition by the West of an independent Kosovo – effectively a truncation of Serbian territory – would be “a second Munich agreement”. Klaus was of course referring to the agreement between Britain, France and Germany, signed with Hitler in Munich in September 1938, according to which the Western powers agreed to allow the Sudeten Germans to secede from Czechoslovakia. This agreement, now universally condemned as an act of appeasement, is widely seen as having marked the beginning of the Second World War.

The president of Kosovo, Fatmir Sejdiu, said on 28 November that the differences between Belgrade and Pristina remained as great as ever. “Independence is the beginning and the end for the people of Kosovo,” he said. “We cannot say exactly when it will come about but it happen be very quickly.” The Serbian President, Boris Tadić, has said that he will “annul” any decision in favour of independence taken by the Kosovo authorities. “We will use all legal and diplomatic measures to annul any such decision,” he said. The European mediator, Wolfgang Ischinger, has said that it is “regrettable” that the two sides have been unable to reach an agreement. His American counterpart, Frank Wisner, said that the peace of the region was at stake. He called on both sides not to move towards violence. “We are not expecting violence immediately but we are entering a very difficult period,” he said.

Slovenia takes over the presidency of the EU in January and it has warned against a precipitate recognition of Kosovo’s independence. The Foreign Minister of Slovenia, Dimitrij Rupel, has said, “The move to independence must under all circumstances be coordinated internationally. We need a little more time for that.” Rupel demanded from the Kosovo Albanians more guarantees about the protection of the Serbian minority in Kosovo and of its cultural heritage there. “These are jewels of European culture,” he said, “we can take no risks with them.” On the other hand, Rupel said that he did not accept the Russian position, which would lead to a further blockage of the resolution of Kosovo’s status. “The Kosovars should not have to wait another year,” he said. The minister said that Slovenia could be an honest broker on Kosovo since it is an ex-Yugoslav state and has good relations with Russia while of course being a member of the EU. [Handelsblatt, 2 December 2007.]

Thursday, 20 December 2007

Tusk tries to mend fences

The new Polish Prime Minister, Donald Tusk, has moved to try to repair the damaged relations between his country and Russia by abandoning his country’s opposition to Russia joining the Organisation for Economic Cooperation and Development. “I have informed Russia that Poland will no longer block the negotiations,” said Tusk, adding that he hoped to visit Moscow soon. His predecessor, Jaroslaw Kaczynski, the President’s twin brother, had frozen relations with Russia when it placed an embargo on Polish meat imports in November 2005.

Moscow would thereby become the third foreign destination for the new Prime Minister, after Vilnius, the capital of Lithuania, in late November, and Rome in early December, to see the Pope. It remains to be seen when he will go to Germany. Tusk is said to want an improvement in relations with Berlin but he is approaching the issue cautiously since he does not want to be denounced as “pro-German” by President Kaczynski. On 21 November, Tusk appointed Wladyslaw Bartoszewski to the post of State Secretary to the Prime Minister. Bartoszewski, 85, who was imprisoned in Auschwitz but who has since become an indefatigable proponent of German-Polish reconciliation, and who speaks German fluently, is a popular figure in Germany. In 1995, when Foreign Minister, he gave a noted speech to the Bundestag for commemorate the 50th anniversary of the end of the World War. He said on that occasion that he regretted the expulsion of Germans from what became Polish territory.

Perhaps the most significant appointment in the new Tusk government, however, is that of Radek Sikorski who becomes the new Foreign Minister. Sikorski, 44, who has British citizenship having studied at Oxford, is married to Anne Applebaum, the noted Washington Post columnist. For several years he worked at the American Enterprise Institute, one of the most influential neo-conservative think tanks, and his elevation to head of the Polish Foreign Office means that Warsaw’s foreign policy will be every bit as pro-American as it was under the previous Kaczynski government, in which Sikorski was Minister of Defence. [Célia Chauffour, Le Monde, 29 November 2007]

Indeed, in an interview, Tusk has confirmed that his country remains as Atlanticist as ever. He told Le Monde that he is opposed to a purely European system of defence and that all military matters must remain within NATO. He also said that he was very pleased when Mr. Sarkozy went to Washington because good relations between France and America were good for Europe. Tusk said that Poland would probably be the first country in Europe to ratify the new Lisbon Treaty, the replacement for the old Constitution. “That will enable us to be seen as the most European country in Europe,” he said. He claimed that public opinion in Poland was 80 per cent in favour of the EU and that he wanted his country to shake off the Eurosceptic reputation it had acquired in recent years under the Kaczynski government. Tusk refused to be drawn on his position on the proposed anti-missile shield for which the Americans want to station launch sites in Poland. He had suggested in his campaign that he was against it: watch this space. [Interview in Le Monde, 8 December 2007]

The new government in Warsaw has also made it clear that it sees no way that Poland can adopt the euro before 2012. The Finance Minister, Jacek Rostowski has said, “This goal goes beyond the horizon of the four-year legislative period.” Tusk has said, “Poland’s accession to the eurozone must not represent any kind of danger for the economy and it must be especially useful for the ordinary citizen.” Poland in this respect resembles most of the other new Member States of the EU, which also are not expected to adopt the euro until 2012. (Slovenia is the exception: it adopted it this year. Slovakia hopes to adopt the euro in 2009. Bulgaria has aligned it currency to the euro for some time and might also adopt it before 2012).

The main reason for Warsaw’s caution is economics: Poland does not satisfy the criteria. Inflation remains at 4 per cent, well above the required level, and prices are still rising. The deficit is also above 3 per cent of GDP although the government has said that it will try to bring this down. On the other hand, the new government has also promised spending on various big projects like roads, and to raise the salaries of teachers. But there are also political obstacles. The Polish constitution would have to be changed if the country wanted to adopt the euro, because it specifies that the National Bank issues currency. A two-thirds majority in Parliament would be needed to change this, and the Law and Justice Party of the Kaczynski brothers would probably vote against. [Reinhold Vetter, Handelsblatt, 29 November 2007]

---- An excerpt from John Laughland's Intelligence Digest. For a free e-mail subscription to the Intelligence Digest, please click here ----