Sunday 12 July 2015

EFTA And EEA: A Deliberate Deception?

We noted in our previous post regarding an article in Telegraph on the EFTA and EEA that it was not very reassuring when Icelandic and Swiss MPs are themselves seemingly unaware how their own country's agreements are made.

All is not what it seems however and delving in a little further shows that far from ignorance both authors of the piece Thomas Aeschi and Guthlaugur Thor Thordarson must be fully aware of the differences between EFTA and the EEA.

In the picture above second from the left sits Gudlaugur Thor Thordarson, as the EEA JPC ( Joint Parliamentary Committee) President. With him are Nora Skaansar, EFTA Secretariat to his right, Pat the Cope Gallagher, EEA JPC Vice President and Tarvo Kungla, European Parliament to his left. It's safe to say that Gudlaugur Thor Thordarson is in the thick of the EFTA/EEA action as it were.

We can see further confirmation of this from his profile on Althing, the Icelandic Parliament's website which lists the committees that he is a member of:
Present committees
  • Member of the Icelandic Delegation to the EFTA and EEA Parliamentary Committees since 2013 (Chairman since 2013) and 2003-2007 (Chairman 2005-2007).
  • Member of the EU-Iceland joint Parliamentary Committee since 2013 (Chairman since 2013)
Thus it's utterly inconceivable that he would not know that access to the EU market is via EEA agreements (or bilateral treaties) not by EFTA membership alone.

The second author of the piece is Thomas Aeschi of Swiss People's Party. A member of the EFTA Parliamentary Committe and as part of EFTA/ EU Parliaments delegation he is invited as observer to the EEA Joint Parliamentary meetings" (click to enlarge):

Not participants but observers. EFTA's impotence in EU trade relations made clear. In February of this year David Campbell Bannerman MEP hosted a conference on ‘Alternatives to EU membership, where Thomas Aeschi was a speaker (my emphasis):
Ruth Lea, representing Economists for Britain, Heming Olaussen who led the anti-membership campaign in Norway in 1994, Thomas Aeschi of the Swiss People’s Party, and Bill Cash MP all said that the European Economic Area (EEA) is not a good option (democracy by fax, against national sovereignty and so on).  
Clearly then Aeschi knows EEA and EFTA are not the same. A point emphasised further when he argues, in this speech below, that he is not particularly fond of the Swiss bilateral treaties:

Revealing at the end of his speech (14mins 10), Aeschi puts forward his preference for a UK exit - "EEA lite" or "EFTA plus". This is also the preferred option for David Campbell Bannerman, and it is a deeply flawed and unworkable option that Scribblings from Seaham (under his old guise of WfW) took apart last year.

It's understandable to be cynical as to the intentions of this article as Douglas Carter was in a comment on my previous piece. It's apparent that the misleading conflation of EFTA and EEA is very likely not to have been born of ignorance but a less than candid attempt at promoting a free-trade agreement for the UK.

Interestingly Daniel Hannan who has long advocated a position similar, tweeted this:

It's also worth noting that Guthlaugur Thor Thordarson is a member of the Alliance of European Conservatives and Reformists (AECR), who argue that the UK should seek a trade-only deal outside of the EU, which could provide the foundations for a greater economic union. And via AECR's official twitter account we see this:

And the secretary-general of AECR is...Daniel Hannan.

We guess international interventions in our referendum are going to be inevitable,and at least with the EU we can see the enemy coming. However with friends like this who confuse the issues and propose unworkable solutions...we will lose the referendum.

Saturday 11 July 2015

EU Referendum: The Difference Between EFTA And The EEA

In Friday's Telegraph we see an article by Icelandic MP Guthlaugur Thor Thordarson and Swiss MP
confusion between EFTA (European Free Trade Area) and European Economic Area (EEA), with a blurring of lines between the Swiss situation and Iceland's:
The clue is in the name: European Free Trade Association. Free trade and national sovereignty turn out to make a pretty good combination. Income per head in EFTA countries is, on average, 56 per cent higher than in the EU. And both our countries export more to the EU, in proportionate terms, than Britain does.
Britain was once the leading EFTA state. It could be again. Come on in: the water’s lovely.
This has led to confusion on social media such as this tweet from executive editor of ConservativeHome and a former campaign director of the TaxPayers' Alliance Mark Wallace:
Perhaps it's not surprising Wallace comes to this conclusion given that Icelandic MP Guthlaugur Thor Thordarson goes onto repeat this mistake on BBC's today programme (2hrs 49mins), a mistake echoed by presenter Mishal Husain.

Not that this is a recent phenomenon, for example here on Conservatives for Liberty they write, (with no mention of the EEA):
The main complaint that constitutes the ‘in’ camp’s only real argument against EFTA membership is that these countries have to follow all the EU’s rules without having any say in how they are made.
The "ruled by fax" argument is one that applies to the EEA not EFTA. And blogger Living in Greece, makes such a hash of describing the contrast between the two settlements that it is completely wrong.

EFTA and the EEA are very different agreements. EFTA membership consists of four countries Norway, Iceland, Lichtenstein and Switzerland. Of those four, three have EEA agreements, the exception being Switzerland which is a member of EFTA only.

EFTA membership is required for EEA participation and it's the EEA which gives Single Market access for Norway, Iceland and Lichtenstein (so-called NIL countries). Given Norway is the biggest county, it's known as the "Norway option" or sometimes the "EEA option".

Conversely EFTA on its own does not confer access to the Single Market - there is no trade relationship with the EU - which is precisely why Switzerland has to have bilateral agreements which are made outside the EFTA framework. Switzerland's EFTA membership is in no way related to its bilateral agreements with the EU.

And such detail matters for UK eurosceptics. Membership of EFTA is not automatic, each existing country has veto regarding the admission of new countries. And in particular both Iceland and Norway have dissatisfaction with the EEA agreement, but they are not powerful enough to force a renegotiation. UK membership of EFTA would therefore be seen as advantageous but only if we sign up to the EEA as well. Without agreeing to the EEA our EFTA membership submission will very likely be vetoed.

In addition we have EU-Swiss relations which are in crisis with the rejection in a referendum by the Swiss of the "free movement" provisions, with the bilateral treaties on the verge of collapse. The deadline for resolution is in February 2017, difficulties which will be high profile during the run-up to our own referendum. That though is a bilateral treaty problem not an EFTA one, but the failure to make such a distinction will lead to misleading interpretations of EFTA.

The above is probably a bit "Janet and John" for regular readers but it's not very reassuring when Icelandic and Swiss MPs are themselves seemingly unaware how their own country's agreements are made.

The two MPs probably meant well but their intervention has done nothing more than muddy the waters to the detriment of the UK's "no" campaign.

Friday 10 July 2015

The Euro And Greece: The Empty Trojan Horse

It is remarkably curious that Greece, a country of relative insignificance, whose economy is smaller than Volkswagen's, has dominated the UK media agenda with much frenzied anticipation of a eurozone meltdown. Leading economists began predicting 'Grexit' including the economist who is credited with coining the phrase, as did other 'experts';
"Grexit is inevitable, it’s an absolute certainty"
And not just economists, this what Daniel Hannan had to say on July 6th:

It's interesting that with a Greek deal looking increasingly likely when we went to find the above tweet last night we found Hannan has now deleted it. Thanks to the internet though it can be found elsewhere. I guess the deletion speaks for itself.

Among other predictions, such as the 'European project is dying' there has been ill-disguised Anglo-saxon gloating and praise for "little democratic Greece standing up to the bullying EU". Greece though did not vote to leave the Euro or indeed the EU itself. They had instead voted to keep spending Germany's money without the inconvenience of paying it back. It's worth noting that the UK is owed around £10billion by Greece.

Whatever the referendum was, an exercise in democracy it was not. Called at the last minute, the referendum was rushed through with no time to debate the complexities of the bailout package, there was an absence of a proper "yes" or "no" campaign, the government put the "no" option (which it favours) above the "yes" on the ballot paper, the Greek media have been accused of bias and breaking the law leading up to the poll and it now appears that the result has been ignored anyway.

In that sense the referendum cannot be fair, or be considered a reflection of a true democratic decision. Instead it was merely an exercise in trying to bluff the EU using the Greek people as pawns. We can only be grateful in this country that we have an Electoral Commission to help negate government referendum stitch-ups like this.

So rather blow apart the eurozone, instead Greece is capitulating. It has proposed and is accepting a deal far worse than the one which was put to its people in a referendum. It will crawl away with a whimper.

The reason of course, as we noted last month, is that the current crisis, and the Euro in general, has less to do with economics and more to do with politics. The current crisis has not come about because Greece ran out of money - there was a deal on the table - but due to Tsipras deciding to do politics, and he has not come out of this well. It would seem he has been rather naive when dealing with the EU and we venture as far as to say "out of his depth".

He had a much weaker hand than he seemed to think - Greece economically and politically is insignificant - and he played it badly. By calling a referendum he thought he would frighten the EU into a better deal by the threat of political contagion to the likes of Spain et al.

Instead the markets largely shrugged off the referendum result and the only consequence has been that he has annoyed just about every leader in the eurozone. Annoyed to the extent that the ever increasingly robust language coming out of the EU indicates how fed-up they are with Greece. Fed-up to the extent that Greece was given an ultimatum on to agree a bailout package or leave. Tsipras backed himself and Greece into a corner. He's had no choice but to climbdown.

And the reasons are two-fold. For all the gloating by the UK media, they have largely overlooked two key points. They can deal with the economic part of EU membership but uttlery fail to acknowledge the more important political aspect. For Greece to leave would be contrary to "ever closer union". The EU cannot politically afford Greece to leave.They will paper over the cracks until the "English Question" is resolved and then we will have a new treaty.

Secondly, despite "preaching" by British" commentators that Greece would be better of out, their own experience suggests the opposite:
When it comes to money, the Greeks learned a lot of lessons the hard way over many generations. The drachma has always been seen by them as a way for the series of corrupt governments to steal from the people through devaluations and inflation.
This is what monetary theft looks like from the Greek point of view, and why they don’t trust their politicians and central bankers in managing a currency. They’ve learned the hard way and won’t forget the drachma’s 82% devaluation against the euro in two decades.
Greece simply does not want to leave. So ultimately Greece's gestures were empty, they capitulated as we expected they would. If nothing else this saga demonstrates once again how badly served we are by our media which doesn't bode well for our own forthcoming referendum.
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Wednesday 8 July 2015

EU: Damned By Their Own Words

We have been carrying out some housekeeping on this blog and have added a whole tranche of new quotes down the right side. The quotes are now separated out into two categories; EU and Euro. For all the europhile arguments that the EU is an economic project, the EU's own words contradict them. It becomes an odd position for europhiles to find themselves in when they contradict the founding father of the very project they're trying to defend.
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Saturday 4 July 2015

EU Referendum: Global Britain

Above is an old Guardian cartoon from the '75 referendum that I've tweaked so that it has more relevance for the 21st century. The original version can be found here. EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU ReferendumEU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum EU Referendum