Adrian Hamilton: Hobbling on in Europe is the best we can manage

International Studies
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The Independent Online

On Tuesday the Government got its EU Bill through the Commons, despite all the suggestions that anti-European Tory MPs would bring about a first defeat for the Coalition. Yesterday the Portuguese successfully sold £1bn of sovereign debt without having to pay above the 7 per cent so many had gloomily suggested would be the all-important rate they would have to part with.

So Europe totters into the new year as it had ended the last, with no one confident that the EU is out of the woods but no one quite ready – not even an intrinsically anti-European Conservative Party over here – to bring the whole edifice crashing down.

Is stumbling on such a bad thing, or should one – as many have – summon the blunt truth and predict either the end of the European dream, or demand that action must be taken by Europe's leaders to prevent it happening?

Well "must" is a difficult word at a time when political leadership is simply not there, in Europe or indeed anywhere else. We are in a period when keeping the vessel afloat is the order of the day. The highest achievement is technical competence in the management of the economy, not strategic vision for the coming decade.

It could be enough. The German ambassador to London was on the radio yesterday arguing that, true, the technical aspects of the European bailout scheme for euro countries in trouble had taken time to work out, but they were now in place and the markets would soon come round to accept them.

Perhaps. But given the way markets keep testing the limits, it's unlikely. If Portugal has managed to get away its bond issue at a long-term interest rate just short of 7 per cent, one has the strong suspicion that it was only because of some tactical buying by the European Central Bank. It's Spain today and then Ireland, Greece and Portugal back again for more this year. It would be a brave man who predicted a happy outcome.

But then, given the politics within Germany, and the widespread public dislike of bailouts of countries they judge wastrel (in contrast to the hard-working, high-saving and productive Germans), what choice did the German ambassador have but to sound sanguine?

You could say the same about David Cameron and the government here. Having kept the anti-EU Tory dogs at bay within the party, by promising a referendum on any perceived transfer of powers to Brussels, the Conservative Prime Minister was bound to introduce a Bill of some sort.

His Europhobic backbenchers, led by William Cash, might huff and puff that the Bill was soft and woolly. They are right. That is its object. But at this time, with his coalition partners buckling under the strain and the public far more concerned with domestic matters than seeking new quarrels across the Channel, the EU Bill at least enables government ministers and Mr Cameron himself to attend summits and join in.

Will it last? Can it last? It's hard to see how. The financial crisis poses real questions about economic governance within the eurozone and within the larger community. Europe cannot move to the kind of full fail-safe system demanded unless it imposes a high degree of centrally managed discipline and co-ordination for the whole region. And that in turn inevitably involves a loss of sovereignty.

The logic may impel a multi-speed Europe in which even some existing members of the euro have to exit in favour of a strongly integrated centre. But even then, when you come to the questions of regulating the financial institutions and markets, determining tax and bonuses, and securing anti-terror measures, it's hard to see how closer integration can be avoided.

David Cameron can try and play a hand in the politics of the non-euro countries, but passing laws on compulsory referendums isn't going to solve either the Tory dilemmas on Europe or the country's.

A simple question from Haiti

The first anniversary of the Haitian earthquake has passed with the near-universal conclusion that an unprecedented aid effort has resulted in a country whose inhabitants are woefully short of even the most basic services. The aid agencies may have prevented the worst of disease and famine – although there has been a serious outbreak of cholera. But if you had told the average citizen stumping up for aid appeals a year ago that the country could still be in the condition it is now, you would have found yourself going away empty-handed.

The UN blames the aid agencies for rushing in without co-operating with the authorities; the aid agencies blame the UN and the US for not producing proper plans for reconstruction; and the Haitians, understandably, blame foreign agencies of all types for driving around in smart 4x4s and living in air-conditioned cabins whilst they have no water or sewage system.

The broad lesson seems to be that, when it comes to a major disaster, organisation and the application of resources is all. Those countries with the infrastructure and planning manage. Those countries without are at the tender mercies of an international system in which the aid agencies compete for attention and donor governments follow their own agendas. You might have thought the lesson learnt after the tsunami of 2004, but apparently not.

But the question no one seems to want to ask, or answer, is the one that tens of millions of ordinary charitable citizens around the world are now asking: just where did their money go?



a.hamilton@independent.co.uk

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