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13 October 2014

Observations on recent political discussions

Some bullet point comments on recent discussion with German and British MPs, as well as discussions on Eurobills.

Comments by CDU MPs

  • The tough German response to President Putin can be explained partly by the personal animosity felt by Chancellor Merkel towards him.
  • The changes in Ireland’s repayment schedule for its bail-out have just been voted through by the Bundestag in full plenary session – as it will do for any major changes/disbursements.
  • Accordingly, any financial problems in say France that arise from its failure to reform its economy as agreed with the EU will NOT be assisted bilaterally. Instead, the ESM is available and France can apply for a programme – with the associated conditionality.
  • Correspondingly, the ESM’s resources cannot be used for other purposes such as the €300bn investment package – no matter how worthy. (GPB note: the ESM Treaty is tightly written in its objectives and these are also written into the main EU Treaty (TFEU) so the main Treaty would have to be changed – with all the complexities and implications.)
  • Germany would be willing to see major changes to the shape (but not size) of the EU budget to finance expenditure in Member States that the EU has called upon them to make e.g. as part of the annual `Country Specific Recommendations’.
  • Germany recognises the need to boost investment spending in Germany and can see that the Capital Market Union could be very helpful in channelling funds to long term investment to say roads, broadband etc. (GPB note: CMU will be greatly aided by the existence of a safe, liquid yield curve such as would be provided by Eurobills).
  • Germany remains very keen to keep the UK inside the EU – but not at any price.

Comments by Conservative MPs

  • The Clacton by-election scale of defeat was a massive shock.
  • It now puts Rochester at serious risk of falling to UKIP and the decision to hold a public primary to select the candidate is extra-ordinary as t giver UKIP an extra two weeks to campaign without effective opposition.
  • UKIP hitting 25% in some polls suggest that a re-alignment of British politics could be at hand.
  • The current feeling amongst Tory MPs is that they will only get 240-280 MPs – well below the 326 required to give an outright majority next May.
  • Yet the feeling about Labour Leader Miliband remains that he is just not up to being Prime Minister. Trying to deliver the conference speech from memory and then forgetting key parts suggests a personal delusion about his own capabilities!
  • Europe: Is the EU `elite’ removed from its grass roots opinion? Yes – and the evidence is UKIP, AFD, Front Nationale etc. Should the whole of the EU have a referendum?? (GPB doubts the practicality of this – what question to be put? Etc. BUT if there is ever to be another major revision of the TEFEU that does change the power structure, perhaps that could also be voted on at the time of the next European Parliament elections???)


  • GPB has pointed out widely in Brussels that there is a huge difference between the classic concept of Eurobonds and his own definition of a Temporary Eurobill Fund.
  • Commissioner-designate Hill was careful to draw this distinction in his written answers to ECON and then proceeded to rule out Eurobonds, whilst remaining silent on eurobills. He was not questioned on this by MEPs.
  • The EU official sector is now looking at the practical mechanics of the Temporary Eurobill Fund.


© Graham Bishop

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