EU Referendum

Anyone who listened to the Analysis programme on BBC Radio 4 this evening, called "Going to the Blogs?", on the phenomenon of political blogging, may be forgiven for coming away more confused than when they started.

Fronted by Kenan Malik, who explored the world of Blogs and analysed "whether they could really change our democracy", it followed the technique now common in radio journalism. The programme covered the subject at breakneck speed, offering time to a wide variety of speakers with diverse opinions, without itself coming to any conclusion.

Thus, variously, one can divine that political blogging is or is not significant, did or did not affect the course of the US presidential election, and may or may not become a force in Britain.

The view that they will become a force was espoused by former Tory leader Iain Duncan Smith, who also wrote a piece for The Guardian in February, in which he argued that Bloggers would "rescue the right" by allowing "Mr Knowledgeable" or (and it is usually a Mr) of Smallville, via his PC, to by-pass the established media and transmit his thoughts to the world.

No one, least of all Duncan Smith, thought to draw the parallel with Speakers' Corner, the blog being the electronic equivalent, allowing anyone to have their say. However, once on rainy Sunday afternoon, I recall wandering past the row of speakers in Hyde Park Corner, being arrested by a voluble and articulate Negro, who was delivering an impassioned and informed speech to a passive audience of a dozen or so bemused tourists.

Yes, we did have freedom of speech in this country, he stormed, and anyone was free to say what they liked. The trouble is, he added, was that no one listened.

I never forgot that speech and, for me, the most striking factoid that emerged from the Analysis programme was that 96 percent of internet users had never read a Blog. We may be the new Speakers' Corner, but the old problems stay the same.

Certainly, we can deal with issues which the mainstream media are ignoring, witness our attempts to instil some life into the debate on defence policy in this country. But one can feel for Mr Howard when yesterday he delivered what was for a politician a good speech on the subject, only to have it largely ignored by the media, in favour of wall-to-wall coverage of Jamie Oliver's attempts to improve school meals.

When you think about it, the first and main priorities of any national government are the defence of the country, the management of external relations and the protection of the national interest yet, when the leader of the opposition spoke on precisely these issues, he was largely ignored. By contrast, the prime minister took time out in Downing Street to meet a celebrity chef to discuss what is essentially a local government issue, and got the lion's share of attention.

That, in my jaundiced view, speaks volumes of the state of British politics today and justifies entirely our efforts on this Blog.

But there are two sides to the equation. As I am wont to say, you can lead a politician to water, but you cannot make him think. Similarly, Helen and I can write our pieces but we cannot make you read them – nor would we even attempt to if we could.

That, oddly enough dear readers, is largely up to you. As a popular phenomenon, Blogs are largely made or broken through personal recommendation. If you like what you see, tell your friends and colleagues, beat them over their heads and do not desist until they too are going to the Blogs.

Quelle horreur! Hollywood luvvies, who are supposed to make statements of deep disdain for President Bush and his administration are now turning on the European Union.

Well, one of them is, but he is a big-time luvvy. Richard Gere has an article in today’s Wall Street Journal, in which he describes his recent visit:

“I was in Europe this month to receive an award from the Geuzen Resistance 1940-1945 Foundation on behalf of the International Campaign for Tibet. The Geuzen Medal honors the memory of Dutch resistance heroes who fought the Nazis by recognizing those today who resist repression, discrimination and racism, and the Campaign was recognized for promoting human rights and self-determination in Tibet through nonviolent means. It was a very proud moment for those of us who care deeply about Tibet and the brave Tibetan people--and certainly for me as the Campaign's chairman.”

Well, for a start there is the United Nations Commission on Human Rights, from which all others descend. The Commission is meeting in Geneva, as I write.

It has 53 members. The independent campaigning group Freedom House has produced a report in which they categorize its members. According to this, and according to everyone who has looked at the situation, six of the most oppressive regimes have representatives on the Commission. They are: China, Cuba, Eritrea, Saudi Arabia, Sudan and Zimbabwe.

Then let us look at some of the other members. Freedom House also identifies other members that can be classified as “not free”, among them: Bhutan, Egypt, Guinea, Mauritania, Pakistan, Qatar, Russia, Swaziland and Togo.

What of Congo, Burkina Faso and Nigeria? Do they count as free countries? I have serious reservations about Gabon or Romania but they are there on the Commission and when they are replaced it will be by countries whose record is not that dissimilar.

Jennifer Windsor, Freedom House’s executive director, expressed herself forcibly:

"Rather than serving as the proper international forum for identifying and publicly censuring the world's most egregious human rights violators, the (commission) instead protects abusers, enabling them to sit in judgment on democratic states that honour and respect the rule of law."

It seems that my colleague and other such ill-natured people who refer to that great and good man, Jacques Chirac as l’escroc (the crook)are not alone. Oh dear me, no. Try putting the word l’escroc into Google, that fount of all modern knowledge.

The first reference is to the official website of the French President, complete with (selected) biography, picture, speeches, whatnot. Curiously enough this is the English language website though it responds to a French word. Perhaps they know something that the whole world has already acknowledged.

Actually there are some other interesting aspects to the website. I mean, who knew that Jacques Chirac (or Jacky as he liked to be called in his youth when he was obsessed with American culture, American films and American fashions) has, among his many other decorations (a bit like the leaders of the late unlamented Soviet Union), a Croix de la Valeur Militaire.

Well, the Croix may be listed but its reason is not. Try as we might we cannot discover where l’escroc practised his valeur militaire. It was suggested to me rather unkindly that he might have got it for standing in front of his troops.

But then M le Président l’Escroc also has the Médaille de l'Aéronautique (aerospace industry) and numerous other medals. For example, he is a Chevalier du Mérite Agricole, des Arts et des Lettres, de l'Etoile Noire, du Mérite Sportif, du Mérite Touristique.

Any information on the reasons for this excessive display of merit will be very welcome. Unlike the fragrant Margot we do genuinely welcome all comments and even reply to them.

It did not take Jack Straw long to capitalise on Redwood’s Financial Times interview, modifying a speech he was due to give on the general theme of the European Union this morning.

Michael Howard, Straw averred, had been consistent in his support for the UK’s continued membership of the EU. Redwood’s failure to rule out withdrawal in the event that renegotiations did not succeed represented, in Straw's view, "a dramatic and disturbing shift in official Conservative Party policy".

This was picked up by BBC's Radio 4 World at One, with the egregious Nick Clarke interviewing UKIP leader Roger Knapman, who pointed out the "inconsistency" of the Conservative position on "Europe", saying that "if you try and renegotiate but you don't have the threat of saying you're getting out, then the renegotiation carries no punch".

The Guardian's Tom Happold, on the paper's newsblog was also quick off the mark, remarking that Labour will have been delighted to read Redwood’s interview. Jack Straw is claiming, according to Happold, that it reveals the party’s secret plans to withdraw from the EU.

With Labour's blood up after the fiasco of the Flight affair, the party will be working hard to convince voters that the Tories are being dishonest about the plans, says Happold. Expect things to hot up further, he adds.

A headline in today's Financial Times puts John Redwood on the spot, claiming: "Tories plan European Union renegotiation".

If that is not pointed enough, the paper then starts its report with: "A senior Tory has refused to rule out a British withdrawal from the European Union should its vow to repatriate large swaths of policy face implacable opposition from Brussels."

The comments, by John Redwood, the shadow deregulation secretary, it says, "highlight the dilemma facing the party as it seeks to convince voters that it could renegotiate crucial European agreements while avoiding a damaging internal row over the UK's future relationship with the rest of the EU."

A Conservative government would go to Brussels with a "renegotiation package" as soon as it had secured a "no" vote in a referendum on the constitution, Redwood says. This would include withdrawal from the common fisheries policy; more control for the UK on social chapter and employment measures; "whatever powers are required" to allow the UK to control immigration over its borders; and other unspecified regulations.

According to the FT, Redwood insisted that such a sweeping renegotiation was feasible, but admitted he had "no idea" how long it might take. He added that the Tories were "not envisaging” Britain leaving the EU" and insisted it was "a Labour lie" to suggest the Tory policy was tantamount to pulling out of Europe.

However, then came the crunch. When Redwood was asked if Britain would stay in the EU, no matter what, he responded by saying: "I'm saying that we will negotiate a better deal for Britain." Then asked if that deal would be within the EU framework, Redwood replied: "I've said what I want to say. We will negotiate the best deal for Britain."

From this, the paper adduces that Redwood has refused to rule out withdrawal from the EU, an omission which may get him into trouble with the Party hierarchy, after the Howard Flight controversy.

We can certainly expect other journalists to pick up on this, in an attempt to make mischief but, if action is taken by the Party, it will bring into high profile the opposition of Europhile MP David Curry to repatriating the CFP.

Any action against Redwood will inevitably be judged in the context of continuing inaction against Curry, to say nothing of the toleration of Ken Clarke's support for the EU constitution.

A lot is at stake here and many party workers will be watching anxiously to see what, if anything, happens.

In Blackpool yesterday, Michael Howard made a speech on defence, talking to a theme that the Conservatives will invest in Britain's armed forces .

The Telegraph website "take" was somewhat different, with the paper choosing to headline: Defence cuts "stab in the back", picking up on the "attack" part of Howard’s speech. In fact, though, the speech was a lot more measured, with Howard making two criticisms of Blair's "stewardship" of Britain's defences.

Firstly, he said, Blair had "elevated European defence integration at the expense of our long-standing commitment to the Atlantic Alliance", and secondly, our Armed Forces had been asked "to do more without being given the resources to do the job."

Nevertheless, the Telegraph did pick up this European dimension, noting Howard's criticism of Blair's "obsession" with Europe, which he said was damaging Britain's defence capability. And also noted were his comments on the "EU proposals to lift the arms embargo on China", which Howard resolutely criticised as "a prime example of the way Europe was working against British interests".

What was particularly interesting, though, was Howard’s statement that a Conservative defence policy would be "guided by our overwhelming obligation to protect Britain's national interest", including our obligation to discharge to the full our global responsibilities.

For once, there is a definite sign of "clear blue water" here, for Howard went on to say:

I strongly support greater co-operation between European countries on defence. But it should take place within the framework of NATO. I have grave reservations about Europe's plans to undertake a new defence initiative which involves duplicating the planning and command structures of NATO.

NATO should remain the cornerstone of our defence. And the European Union should not seek to create a defence structure as an alternative to NATO or as a counterweight to the United States.

The European Constitution requires member states to "actively and unreservedly support the Union's common foreign and security policy in a spirit of loyalty and mutual solidarity".

It will mean that once the European Union has decided its line, a British government could not change it without getting the unanimous support of every other member of the EU. Our ability to defend our interests in the world and support our friends would be seriously compromised.

If Mr Blair gets his way with the European Constitution Britain will lose one of the central attributes of being an independent nation state.

Lest we forget, it is not only dictators that the EU loves but terrorists, as well. Though, of course, the latter would less likely to be in existence if it were not for the former.

It has been a given for “European” politicians that there is only one real problem in the Middle East and that is the problem of Palestine. Well, maybe they are right, though I do not myself imagine that Islamic terrorism would disappear overnight if that were solved and neither would the various unsavoury dictators.

However, beyond reproaching the Americans for not dealing with the Palestinian problem (a tad unfairly) the EU has not exactly covered itself in glory. There is no question about it: the persistent support for the late, unlamented Chairman Yasser Arafat, a man who has given kleptocracy a bad name, has done very little towards untangling the Palestinian knot.

Now Arafat is gone and the Syrian President-for-life Assad Junior has shown his total complete contempt for his supposed patron, France, there has been a certain pulling in of horns. President Chirac has joined President Bush in calling for the withdrawal of Syrian troops from Lebanon, though whether he will be all that upset if it never happens remains to be seen.

There is still the question of the terrorist organizations that are going to make all attempts to create peace in Palestine rather difficult. Foremost of these is Hezbollah, armed and funded by Iran and Syria, operating in Lebanon and determined to go on blowing civilians up as long as they can get away with it.

Which would not be very much longer if there was some kind of an agreement to put Hezbollah on everybody’s list of terrorists and try to cut off their funding. If Hezbollah were banned in Europe, said Hassan Nasrallah, its leader,

“The sources of funding will dry up and the sources of moral, political and material support will be destroyed.”

“Just last week, a Spanish court outlawed Aukera Guztiak, claiming they were a reincarnation of the illegal Batasuna party, which itself was banned two years ago for its ties to ETA, the Basque terrorist group.”

Well it did not take them long. According to the Chinese news agency, Xinhuanet, France has expressed full support for UN SecGen Kofi Annan (father of Kojo).

At a press conference Jean-Baptiste Mattei, the spokesman for the French Foreign Ministry said:

“We've noted that the report clearly excludes any irregularities on the part of the secretary general.

We reassert our full support for the secretary general and our willingness to work with him to confront the numerous challenges that the UN must take up, notably reform of the world body in the best possible conditions.”

“You cannot tell us to choose between reforms or Kofi Annan.

We are saying it very clearly today that there are no reforms of the United Nations without Kofi Annan and we commend him a citizen of the world.

The reforms of the United Nations will help us in order to have greater democracy in the world and the voice of the people to be heard.”

Despite hysterical headlines in the British press (the Evening Standard in particular), the most recent earthquake in Indonesia has not caused another tsunami. There are, nevertheless, many victims. The Indonesian government’s estimate is anything up to 2,000, which does not help us much.

There is also a good deal of devastation and help may well be needed to deal with the immediate impact and to encourage rebuilding later. Though, let me remind our readers, Indonesia is not a particularly poor country and, with some help, will be able to rebuild the areas in question. On the other hand, the authorities seem unable to create a situation in which natural disasters do not cause quite such enormous devastation. Some conclusion might be drawn from that.

According to the ISN Security Watch

“International aid has begun arriving on the Indonesian island of Nias and other areas affected by a massive earthquake on Monday, but bad weather, successive aftershocks, and a lack of equipment have indered rescue operations.”

“The EU’s executive commission has sent an assessment team to the affected area and said it would offer financial aid if needed.”

“three months later, with many millions of pounds raised, there is little sign of any funding from such organisations as the UN, the World Bank, the Asian Development Bank or larger international non-governmental organisations,directed at rebuilding livelihoods and or providing more permanent housing.

There are many factors, such as bureaucracy, politics and corruption,that complicate the efficient and timely deliverance of aid. However, the immediate future looks grim for tsunami-affected families who now face the prospect of the coming monsoon season living in a tent with inadequate sanitation and drainage.”

“It is scandalous that the vast amounts of money raised by public appeal in the aftermath of the tsunami are not being applied more effectively and with greater urgency.”

The Lord Pearson is a relatively happy bunny today as they printed his letter in The Telegraph today although, from the heights of Rannoch towers, he is somewhat miffed that they left out the word "corrupt", as in "corrupt octopus". Now what could he be referring to?

Anyhow, his Lordship is taking The Telegraph to task for expressing the hope in its 29 March leader that France votes "no" to the EU Constitution.

If it does, he writes, Brussels is likely to respond by setting up another inter-governmental conference, "listening to the people" of course, which would render our own referendum redundant. That IGC will then produce a new treaty, subtly achieving the constitution's aims, upon which we will not be granted a referendum, but which Parliament will rubber-stamp as usual.

In the meantime, he continues, the octopus (as in "corrupt octopus") will continue to devour the remains of our sovereignty piecemeal, under the treaties we have already been foolish enough to sign. So let us pray that the French run true to form.

This is one of several pieces on the "French situation" in today’s newspapers, although the Europhile Independent and The Guardian have very little of interest to offer (how often that is the case?).

A good summary of recent events can be found from "our man on the spot" and Charles Bremner of The Times describes the "Frantic scramble to revive the 'Yes' vote".

The Telegraph also has an interesting op-ed by Fraser Nelson with the somewhat misleading title: "Chirac is dragging us down with him".

"A spectre is haunting Europe - and terrifying the President of France," Nelson tells us, nothing other than "ultra-liberalism," branded by l’escroc as "the communism of our age."

That l'escroc thinks of it thus is to Nelson a "sad illustration” of how France is stuck in the political dark ages", but his main thesis is that Britain, under the ministrations of Messrs Gordon Brown and Tony Blair are following along the same path. "Britain… is slowly drifting from New Europe to Old," he writes.

That brings on the City comment which focuses on the referendum and argues that a "French 'Non' could echo across Europe".

So far, it says, the markets have reacted calmly as the French "non" to the EU constitution gains a solid eight point lead in the opinion polls. Everyone assumes that the EU has moved on since September 1992 when whiffs of a French mutiny against Maastricht set off speculative waves in the bond and currency markets, ending in a lira debacle and sterling's ejection from the ERM.

However, the Telegraph is worried that the markets may have misjudged the profound ructions that could occur if the French do indeed toss the constitution into the dustbin. It would be an ominous rejection of free market values and the EU cannot take many more hits on this front before real trouble begins.

With the simultaneous collapse of the Stability Pact, the Lisbon liberalisation drive, and the services directive, the piece concludes, it was perhaps the worst week for Europe in half a century and the risk for investors now is that a "non" could prompt market players to question whether monetary union itself has a long-term future.

Something of that theme is picked up by Bronwen Maddox in The Times "Foreign Editor's Briefing", where she argues to thesis: "The answer doesn't matter: it's the wrong question".

Europe, she writes, is making too much fuss about the French referendum. The "project" will stumble on without out it and what matters is that the EU should concentrate on policies to stimulate competition, to cut subsidies and curb government debt.

The constitutional debate is "a self-indulgent distraction if there is no interest in change" and the politicos are putting the importance of the constitution far above the actual policies which the EU is supposed to pursue, in the interests of its own future. In indulging its obsession with form, the EU is ignoring the content - and the urgency of the need for change.

That sounds like a half-way intelligent comment except for one thing. In truth, the EU only has one policy – political integration. Everything else is subordinate to that, and Maddox makes the mistake of assuming that the EU as a governmental entity is actually interested in anything else.

Thus, le crunch approaches as to whether France is going to put national interest above the interests of "le project", and that is why, actually, the constitution is not "a self-indulgent distraction". It is, in fact, a battle for the heart and soul of Europe.

But the point that Pearson raises is interesting. What happens if the French do vote "non". The danger is that the "colleagues" will fudge it, and proceed as before (as indeed they are doing now), with the UK deprived of the opportunity for a decisive vote on the process of political integration.

Happening after the UK general election, a French rejection of the constitution may indeed give Blair exactly the opportunity he needs to abandon a referendum he is unlikely to win, putting us back in the twilight zone, with no clear target to aim at.

On that basis, it might be just as well if l'escroc does manage to rig the poll and squeak home with a narrow "oui". His election agents had better get busy filling in all those polling slips.

Martha Stewart went to prison (not for long, admittedly) for not telling the truth to federal investigators about a supposed crime that she was not even being accused of; the chief executive of Boeing has had to resign because he was having an affair with a senior director, though there was no question of sexual harassment or improper pressure.

I could cite a long list of others in the private sector who are being forced out or punished not for real crimes like the various high-ups in Enron but for a slight mis-step or dubious misbehaviour. Who, after all, apart from Harry Stonecipher, his wife and his mistress really care about his affair, as it did not affect his work or hers?

Now let us look at the organization that claims to be the ultimate moral arbiter in world politics. Yes, of course I mean the United Nations.

The second of the three reports the Paul Volcker commission is planning to produce this year has finally, after much leaking, appeared and you’ll never guess it, but it has “exonerated” the SecGen, Kofi Annan.

Actually, it was more a question of no documents being found that would point to the SecGen directly. The shredders must have been working overtime.

While he has been at the helm the biggest humanitarian exercise, the food-for-oil scheme has collapsed into fraud and grand larceny, that has involved, among others, some of Mr Annan’s closest advisers, Iqbal Riza and Dileep Nair, respectively Annan’s chief of staff until last December and head of the United Nations' watchdog group, the Office of Internal Oversight Services.

Two high-ranking UN officials have already had to be suspended though we understand that the organization using our money will pay their legal expenses, presumably because the huge salaries they received for many years, the various perks plus the money they managed to skim off during the food-for-oil scheme cannot cover it.

Finally, there is the involvement of the SecGen’s own son, who was paid a retainer for several year by the Swiss company Cotecna, that had been tasked with monitoring the scheme and a fine mess they made of it, too.

Ah but there is no evidence that Kofi Annan intervened in any way with the choice of Cotecna. But there is excellent evidence that son Kojo’s involvement has been in public knowledge for at least six years. And what did daddy do? He had a one-day internal enquiry that dismissed the matter out of hand as being untrue and a wicked libel.

Paul Volcker’s report does rather mildly criticize the SecGen for that and for not realizing that there could have been a clash of interests there. Poor chap, how could he realize that? Such an innocent.

Let us add to this all the other scandals: the behaviour of the UN troops in Africa and the Balkans, the accusations of sexual harassment of staff within the UN itself, the complete inefficiency and concentration on their own creature comforts shown by the UN’s people after the Tsunami, the knowledge we have of the UN’s failure in Rwanda (that was on Boutros’s watch but Annan was directly responsible), the farcical situation whereby some of the world’s worst tyrannies are members of the UNCHR, and so on.

One cannot help asking oneself: what will it take for SecGen Kofi Annan to do the honourable thing and resign? And if he will not do it, what chance is there of any other highly paid, corrupt, unaccountable UN official doing the same?

What is the point of all those high-falutin’ reform proposals if we know, and the present situation shows it all too clearly, that nobody, but nobody will ever be held to account, no matter what crimes are committed in the name of transnationalism?

Remember that next time some ridiculous politician or commentator or just some fool who has nothing better to do except to go on yet another anti-American demo starts bleating about morality equalling multilateralism and the source of it being the United Nations.

According to a Reuters report, French churches yesterday combined to speak for the EU constitution, urging voters not to turn the referendum into either a plebiscite over Turkey's entry bid or a vote on local political issues.

In a joint letter, Roman Catholic, Protestant and Orthodox leaders said the constitution, "brought substantial improvements to the existing treaties". They added: "The referendum has no other object than to accept or reject the treaty… The purpose is to decide on the treaty itself, without being distracted by purely national issues or side debates."

This was co-ordinated with a message from prime minister Jean-Pierre Raffarin, who also emphasised that the treaty had nothing to do with Turkey and would strengthen the "French model in Europe". Valery Giscard d'Estaing, added his weight to the plea, warning the French not to reject it.

"If we say 'no', there will be a crisis, it means we will go back to Nice, the worst treaty for France," Giscard told France 3 television. "One must not believe that there will be a favourable negotiation after a 'no'."

Meanwhile, yet another poll, this one conducted by the IFOP research group for Paris Match magazine, has found 53 percent of respondents declaring an intention to vote against the constitution, with 47 percent in favour. This is the fifth consecutive poll to favour the "no" campaign.

A research report by Berg Insight - a noted "business intelligence" consultant to the telecom industry - tells us that, by 2009, all 15 million cars sold in Europe could have "telematics" – by which is meant a satellite navigation device and a mobile communication unit.

Navigation equipment, says the report, will drive growth in the premium car segment and – wait for it - EU safety regulations could open the volume market for embedded telematics solutions after 2009. By that year, says Berg, the EU commission has proposed that all new cars sold in the EU should automatically notify an emergency centre with an exact location in case of an accident.

If the proposal is realised, it adds, all 15 million cars sold in the EU annually will have to be equipped with telematics unit consisting of GPS satellite navigation device and a mobile communication unit,

From where Berg Insight obtained this information is questionable, as there are no firm proposals from the commission that cars should be fitted with "telematics".

The idea stems from the White Paper on Road Safety COM(2003) 311 final published on 2 June 2003 which suggested, tentatively that cars could be fitted with "accident alert system for the automatic transmission of essential information to the nearest emergency service unit".

There is no obvious connection between Berg Insight and the commission but what we are seeing is an insidious form of EU propaganda, paving the way for a major commission initiative – wittingly or unwittingly – making it appear to be inevitable (and unquestioned).

But of course, as we pointed out in an earlier posting, the real agenda is an EU-wide road charging system, based on the EU's Galileo satellite system. But how typical that the EU, through its useful idiots, is making the case on safety grounds, getting universal acceptance of equipment in cars which, latterly, will be used for road charging.

Softly, softly, catchee money. Mother Europe will look after you and summon help if you have an accident. Only later will we be presented with the bill.

For the second time, a Ipsos survey for Le Figaro and Europe 1 shows the “no” campaign in the lead, 54 percent against 46 percent for "yes", with a clear majority with the Socialist party

This is slightly down on Saturday's poll for the weekly Marianne magazine, which gave fifty-five percent of French voters opting to deep-six the EU constitution.

Nevertheless, this poll, the fourth in succession to show the "no" campaign in the lead, is especially significant as it was conducted on 25 and 26 March, after the European Council when Chirac declared his great victory on the "Bolkestein directive". Rather than improve its position, the "yes" campaign has lost two more points, compared with the previous Ipsos poll, carried out on 18 and 19 March.

The poll also finds that the increased opposition comes exclusively from the left, with 58 against the constitution, as opposed a "stable minority" on the right at 33 percent. This represents an eight point movement in one week, and compares with 59 percent support in December, when the Socialist’s internal referendum was held.

As to the more detailed spread of voting intentions, private sector employees polled at 76 percent "non", public sector workers at 58 percent and those on low wages at 71 percent.

Also significant is that the government's claim that a "non" vote would lead to the collapse of the European project has had little effect. The majority of voters – 51 percent against 48 percent a week ago – do not believe this is a significant factor. Opinion is more evenly divided, however, on whether rejecting the constitution would "weaken France in Europe". But more (45 percent) reject this thesis than agree with it (42 percent).

Most of those polled (67 percent) claimed they would be voting on the text of the constitution but "the economic and social situation in France" will weigh strongly in the vote: for 66 percent, this is a factor (70 percent of the Socialist electorate).

However, there is still everything to play for. Only 48 percent of those questioned expressed a strong intention to vote. Amongst those, 31 percent did not express a choice. Of those that expressed an opinion, 29 percent said they would be prepared to change their view.

Mr Charles Moore, erstwhile editor of The Daily Telegraph, does not have much sympathy for Howard Flight. In his Telegraph op-ed today, he believes "Michael Howard has acted ruthlessly - and rightly, too".

But the same Charles Moore, both in the op-ed and on the BBC lunchtime programme World at One, speaks for Adrian Hilton, the Conservative candidate for Slough, "sacked merely because the Catholic Herald recently attacked a couple of pro-Protestant articles he wrote two years ago." "If opponents see that the leadership will simply turn on any candidate against whom they can trump up an accusation, they will trump up a lot more," he writes.

But the more central point, which was raised on the World at One programme, was that Hilton has not been deselected for anything he has recently said – or indeed for anything that contravenes Conservative Party policy. Having been approved as a candidate by Central Office, which had full knowledge of Hilton's views, action has been taken retrospectively.

Actually, according to The Times, Hilton was sacked two weeks ago after complaints about an article he wrote for the Spectator magazine in 2003 that portrayed the European Union as a papist plot that would extend Vatican sovereignty over Britain.

Now, the Slough association has refused to play ball and is now in "supported status" - which means that its officers are suspended and all decisions made by a representative from Conservative Central Office. The party leadership decided last week that Sheila Gunn, John Major's former press secretary, would replace Mr Hilton as the official candidate.

A few days ago, we noted on this Blog that it had not entirely escaped notice that Michael Howard's ruthless deselection of Howard Flight, for deviating from the party line on public spending, was not matched by equivalent action against those Tory MPs who depart from the line on the European Union.

And although we hold no brief whatsoever for Adrian Hilton – nor agree with his views – once again we note that it is a Eurosceptic that has incurred the wrath of the party.

But what is more significant is that the action is being taken for views expressed two years ago, simply on the basis of a complaint made now – alleged to have come from, incidentally, none other than the serial Europhile John Selwyn Gummer.

Mr Moore talks and writes about fairness and equitable treatment in this respect and, if past sins are now to be taken into account, surely this must apply fairly across the board.

In that context, on 19 October, Tory MP David Curry had published in the Yorkshire Post a long article condemning the official Conservative Party policy on repatriating the Common Fisheries Policy, an article which has since been quoted with glee by Denis MacShane and fisheries minister Ben Bradshaw.

Curry followed this up with a letter to the same newspaper on 2 November, headed "Britain cannot abandon European fishing policy", the statements made then and previously being in direct conflict with the personal commitment made by Mr Howard to repatriate the fishing policy.

On this basis, if Adrian Hilton has to go, then on better and more secure grounds, David Curry should be deselected forthwith. What is good for the goose should be good for the gander.

It appears that that the "colleagues" are getting a little nervous about the proliferation of free speech on the Margot Walström Blog.

Confronted with a surge of pointed comments from a band of articulate Eurosceptics, England Expects informs us that, in an attempt to repel boarders, commission press official David Monkcom has issued a plea for assistance on the commission's internal notice board, 'intracomm':

Margot's blog: get involved!

Did you know that Vice-President Wallström is writing a twice-weekly "web log" (or "blog")? Please check it out on her page of Europa, and join in the very lively debates going on there!

Hundreds or even thousands of people visit this site every day, apparently, but so far most of the comments posted there are from anti-EU individuals, some of them legal experts or journalists. So far, very few of us pro-EU people seem to be willing to face the sceptics, reply to their arguments or answer their very probing questions.

So, dear colleagues, especially you economists and lawyers out there, please take a look at this "blog" and respond to our critics!

David Monkcom /DG Press

If Chirac thought he was going to be welcomed with open arms in Tokyo, he was quickly disabused when he met Japanese prime minister Junichiro Koizumi on Sunday.

In fact, Koizumi, leader of a nation renowned for its diplomatic protocols, was uncharacteristically blunt, telling l'escroc that Japan strongly opposed the lifting of a EU embargo on arms sales to China.

On another issue of contention, the siting of the proposed International Thermonuclear Experimental Reactor (ITER) project, Koizumi also refused to yield to the French bully, telling him equally bluntly that Japan would not give up its bid to host the site.

Wrapping up his visit to Japan, therefore, Chirac spoke not to the Japanese but to his own countrymen, kickstarting his government's campaign on the EU referendum, addressing the 7,500 expats in Japan, telling them to exercise their duty as citizens on 29 May 29 and "express yourselves on this crucial issue for the future of our country and for the French people."

Perhaps though it was his dusty treatment at the hands of Koizumi that put him in such a foul mood, French witness media reports over the weekend that he intervened to prevent the national television station, TF2, from allowing EU commission president, José Manuel Barroso appearing on the political programme 100 Minutes.

More likely, appears that Chirac feared that even 10 minutes of Barroso's "liberal" views on French television might cost votes in the referendum, although the French president is known to harbour a "low regard" for the commission chief and his "Anglo-Saxon" views.

However, there are fears that Chrac, by portraying the commission as an ultra-liberal Anglo-Saxon institution, may be fuelling the "no" campaign rather than his pro-constitution effort.

Certainly, the Daily Telegraph this morning sees hope in Chirac’s disarray, suggesting that after the third adverse poll, "one can almost hear the cry of 'Merde!' echoing round the Elysée Palace." With only nine weeks to go, it says, President Chirac is right to panic.

The paper also observes that French voters are in no mood to be addressed de haut en bas: the surge in support for the "no" lobby partly reflects the public's impatience with the tight-knit Parisian elite, so the propaganda may end up achieving the opposite of what was intended.

In common with other commentators, the paper feels that if M Giscard d'Estaing's "execrable constitutional treaty" is rejected by his own countrymen, the European federal project will almost certainly fall apart.

With that possibility in mind, following the long Easter weekend, prime minister Jean-Pierre Raffarin will this week try to revive the "yes" campaign, participating in a series of debates on the text and dispatching his ministers to do the same.

"Five hundred meetings are on the calendar. I personally will participate in more than 20 events to explain what is at stake," Raffarin has said on the private television network TF1. Foreign minister Michel Barnier has a marathon agenda of 70 meetings in the next two months before the vote and European affairs minister Claudie Haignere will also play a key campaign.

For once though, it is beginning to look like Chirac has lost his touch and all this activity is going to be to no avail. Fresh from the land of the rising sun, the man looks set to witness a sunset in Europe.

The mighty Microscof has groaned and given forth a mouse, in the form of a new name for its stripped-down version of Windows XP, demanded by the all-powerful EU commission.

But, instead of going for the obvious, its newly-emasculated product is to be called "Windows XP Home Edition N".

The new name represents a small step in Microscof's long battle with the commission, which last year ruled the software giant had abused the near-monopoly of Windows to crush competition, fined it nearly €500 million ($650 million), and ordered it to change its business practices.

The commission also ordered Microscof to sell a version of Windows without its Windows Media Player audiovisual software but, up to press, there has been no agreement on a name for the revised product.

Horacio Gutierrez, Microscof's top lawyer in Europe, says the names "Windows XP Home Edition N" and "Windows XP Professional Edition N" were suggested by the commission after it rejected 10 suggestions by Microscof, including their first choice, "Windows XP Reduced Media Edition."

We would dearly love to know what the other nine suggestions were, and whether one at least has the initials "F" and "O". As to what the "N" stands for is anyone’s guess – "neutered" perhaps, "non-functional", or what?

Suggestions in the "comments" section please, and keep them clean.

Well, he is still trying and you cannot blame him. In two months’s time there is another important land election, in North Rhine-Westphalia, and the polls are indicating a possible Christian-Democrat victory. After holding the state for 32 years, the Social-Democrats would not like to lose it at all.

Chancellor Schröder is caught whichever way he decides to turn. On the one hand, the great German welfare state together with the huge aid packages to the eastern part of the country, have all but bankrupted the country. A root-and-branch reform is needed in social welfare, taxation, pensions and, last but very much not least, the regulatory structure.

On the other hand, all such reforms reduce welfare payments at a time when unemployment in Germany has gone over 5 million, reaching at 12.6 per cent the highest level since the Second World War.

Then there is the regulatory structure. A good deal of it comes from the EU but a goodly part is home-grown. In fact, much of the EU’s regulatory maze was created to ensure that other countries can keep up (or down) with Germany.

So, what with one thing and another, German business has been moving out of the country, pleading inability to afford the German miracle any more. About the only thing that is left is services, as they, by definition cannot be moved. But they are not safe from cheap and agile labour from the hungrier eastern members of the EU.

Schröder has had one good idea recently: he has proposed a cut in corporation tax, down to 19 per cent, which will bring Germany in line with some of its cheaper competitors but not all. In any case, several commentators have pointed out that there are enough other taxes on corporations to keep the level above the promised 19 per cent. So that is not going to help.

But Chancellor Schröder thinks it should. In an interview in the Bild am Sonntag he has tried to shift blame from the unions and, indeed, himself onto those unreliable businesses. The new reforms, the Chancellor proclaimed, have created a new business climate in the country.

“Therefore, the constant talk of moving production and jobs should stop, and there should be investment in Germany.”

Yes, all right, the central issue for the general election is public spending – and the battlefield is set over who can save more money from government "efficiencies" in order to pump more back into public services.

The Tories, on the basis of the James report, aim to "save" £35 billion, of which £22 billion will be pumped back into services delivery, while Labour, through its Gershon review, claims to have identified "auditable and transparent efficiency gains of over £20 billion in 2007-08 across the public sector".

Against projected public expenditure of £400 billion or so, the difference between the parties is actually very little and possibly even less than the headline figure. A significant quantum of the projected James report figures are, in fact, unrealisable, as they relate to spending on activities required by EU law. The result, in any event, is the difference between public expenditure at 42 percent of gross domestic product by 2011 under Labour and at 40 percent under the Tories.

Thus it was our old friend Peter Riddell who remarked recently in his Times column that Sigmund Freud would have found plenty of material in British politics at present to illustrate his adage about "the narcissism of small differences". Very similar types of people tend to exaggerate the small differences between themselves and build them up into life-and-death struggles. That, he wrote, is exactly how the parties are now behaving:

We have an outpouring of claim and counter-claim about taxes and public spending, implying ruin if the other party wins. There are legitimate questions about how much the waste/efficiency savings from the Tories' James review can be achieved, just as there are about the Government's. But Labour is specialising in hyped-up, almost mendacious assertions about alleged Tory "cuts", mass dismissals of teachers, nurses, and so on.

The reality is that the differences between the parties' spending plans are pretty small: around 2 percent of national income over the course of a full Parliament. This is less than half the rise since 1997, or during the early 1990s. Similarly, as Vince Cable of the Liberal Democrats acknowledged this week, the differences between the parties on "the tax take" are minimal. The £4 billion cut in taxes promised by the Tories is merely a seventh of the projected rise in tax receipts which will occur under the existing tax structure.

As the crisis in Kyrgyzstan goes on, Javier Solana, the EU’s Foreign Minister in waiting has finally made a statement on the supersoft power’s behalf. (Perhaps, he has been reading this blog.) He has called on the people and politicians of Kyrgyzstan to calm down and restore law and order, presumably, in the way it existed under President Akayev.

According to Deutsche Welle

“Solana "strongly appealed to the people of Kyrgyzstan to behave responsibly, to ease restoration of law and order throughout the country and to refrain from violence and looting," said a statement issued by his office.”

“The EU "makes a strong appeal to the newly nominated leaders to restore public order as quickly as possible, to begin dialogue with all political forces and to implement a policy of national reconciliation," it said.”

“We count that international organizations, including the OSCE, will conduct themselves responsibly because too much depended on how these organizations assessed the events around the elections.”

The Commissar for Aid and Development, the Belgian Louis Michel, has just paid a four-day visit to Cuba, one of the last outposts of totalitarian communism. Not that you would guess it from M Michel’s comments.

Apparently, unperceived by anyone except the EU’s Commissioners and the Spanish government, Cuba has made some very satisfactory developments in its human rights policies, thus justifying the fact that the EU has decided to suspend its sanctions on that country. (The only reason they were suspended and not lifted outright was that the pesky East Europeans, who know totalitarian communism when they see it, protested.)

Apparently M Michel was allowed to meet families of imprisoned dissidents for a whole hour and, he added breathlessly, the government did not interfere with these meetings. Gosh! Wow!

I shall instantly throw away my copies of John Stuart Mill’s writings as well as those of Andrei Sakharov, Karl Popper and Friedrich Hayek, replacing them with the collected speeches of the new hero of liberal thinking: Fidel Castro. (I think I just about have enough room in my house for all those interminable speeches.)

One may jest but Commissar Michel takes these matters seriously. On the basis of this amazing display of freedom and openness he has announced that there will be no EU support for a planned congress of dissident groups and he has also advised pro-democracy activists not to “provoke Fidel Castro”. Try as they might, their political colours will show through.

The EU and M Michel were roundly condemned for their stupidity and dishonesty by the dissident economist Marta Beatriz Roque, who said:

“The government is not going to change. Castro is deaf. Sanctions have a political value because they demonstrate to the whole world that Castro is a human rights abuser. The EU should not be seeking deeper relations with a totalitarian regime. The fact that we could meet Mr Michel one day, for an hour, is an isolated phenomenon.

The Cuban government allowed it to take place so the EU would see what the authorities wanted them to see. I don't understand how Mr Michel, who is an intelligent person, can think that he understands Cuba in the short time that he was here.”

The leading article in yesterday’s Sunday Telegraph charts meticulously Tony Blair’s convoluted path through a maze of his own making: a “passionate” endorsement of the International Criminal Court, rightly described by the Americans as being nothing more than a “set of politicians with their own political agenda” and his equally passionate belief in the need to support the United States in its fight against terrorism together with a no less passionate need to have that fight endorsed by the UN Security Council.

As the article points out, Lord Goldsmith’s assertion, which ran counter to the opinion of “practically all the Government’s lawyers”, according to Elizabeth Wilmhurst, the deputy head of the Foreign Office legal department, who actually resigned over the issue, that the war was unequivocally legal, was made in response to Admiral Boyce’s worry that he or his officers might end up before the International Criminal Court.

The article concludes:

“The truth is that the war was probably not legal under international law. Those who believe that is a fact of cardinal moral importance have not yet had the courage to admit the inevitable conclusion of their position. It is that there now needs to be a “coalition of the willing” to restore the legal government of saddam Hussein to its rightful position as the sovereign authority in Iraq. Tony Blair must be arrested and tried by the ICC, and Saddam should be the primary witness against him. This is the inescapable logic of the champions of international law. It should make everyone realise how unreal is the world in which they live.”

It has not entirely escaped notice that Michael Howard’s ruthless deselection of Howard Flight, for deviating from the party line on public spending, is not matched by equivalent action against those Tory MPs who depart from the line on the European Union.

This, while Flight is consigned to political obscurity, the likes of Kenneth Clarke, who has consistently opposed the party line on the EU constitution, and David Curry, who openly trashed the party policy on repatriating the Common Fisheries Policy – seem to bear charmed lives.

In this context, neither has it escaped notice that Flight was a principled Eurosceptic and it is almost certain that he will be replaced with a Central Office "moderniser" who will hold no strong views on "Europe" but will tend towards the Howard line of "reform" and "renegotiation".

But the disparity of treatment has sent shockwaves through the band of Tory Eurosceptics, some of whom are actively toning down what were planned to be robust, anti-EU election addresses, and revising their local campaigns, for fear that Campbell's spies might be abroad, ready to cause trouble between them and Central Office.

All of this suggests that Tory activity on "Europe" will be extremely muted during the general election campaign, with candidates reluctant to engage on the issue, avoiding engagement whenever possible. If UKIP had its act together, it would find it had a more than usually clear field on the issue.

But it also lends a further sense of unreality to the campaign, which will be fought hard on extremely narrow domestic issues, leaving the "elephant in the room" disregarded. Thus, the general election takes on the aspect of a phoney war, with activists fully aware that the real battle will start – not finish – with the final parliamentary declarations.

From a personal perspective as a confirmed "election junkie" – having taken an active part in the last three general elections, in two of them as a candidate – I cannot recall ever having been less interested in the outcome of an election, a sentiment I know to be shared by many others. Of far more interest is the 29 May French referendum and, beyond that, the UK referendum, if indeed it materialises.

Thus does the baleful influence of the European Union extend its writ, deadening what should be the most vibrant political event on the calendar. In yet another way, therefore, the "project" has become the death of politics.

The usually sensible and well-informed business section of the Sunday Telegraph had rather an odd article in it today. Martin Baker was profiling John Elliott, chairman of EBAC, that sells water coolers all over Europe, and a well-known eurosceptic (though his achievements as chairman of NESNO ought to be put next to some appreciation of what Neil Herron and others had done before the organization was even thought of).

Mr Elliott, has been prominent in the Business for Sterling and No to the euro campaigns; he clearly dislikes regionalization of the UK; and he absolutely loathes the bureaucracy that emanates from Brussels and crushes any kind of entrepreneurial spirit across Europe and Britain.

Nothing odd about that, you might think. One assumes most businessmen and businesswomen think roughly along those lines. Not according to the Sunday Telegraph’s finest, they don’t.

Martin Baker finds that there is an

“… obvious irony in all of this [growing sales across Europe] is that Elliott is a loud eurosceptic”.

“It is, in fact, bureaucracy that Elliott dislikes. He may be a eurosceptic (and is violently opposed to any idea of Britain ever dropping sterling) but he is not anti-European or xenophobic.”

Mr Portaloo (aka Michael Portillo) is by no means our favourite columnist and our view is that The Sunday Times was sadly diminished when it recruited him. However, as Churchill once said, every dog has his day (and some days are longer than others), so even Portaloo, by the law of averages, must occasionally contribute something worth reading.

So it is today when, under the heading: "The escape door's open, but Blair stays on as EU hostage", Portaloo recounts how twelve years ago, selected members of John Major’s cabinet gathered at Admiralty House to hear the results of the French referendum on the Maastricht treaty.

Within minutes of the ballot boxes being sealed, he writes, Major received a call from Paris to tell him that the vote had been carried by 51 to 49 percent. That, says Portaloo, surprised me:

In my experience of elections it had never been possible to know the outcome of such a close contest so quickly. To this day I harbour shameful doubts about how the French government could be so sure so soon. British ministers exchanged sceptical glances in private as Major went outside to tell the media of his pleasure at the result.

The integrationists want a constitution, president and foreign minister because those are the attributes of a nation state. The treaty does not bring about a United States of Europe, but it seeks to accustom us to the terminology and institutions of a country called Europe. It lays the ground for further integration that will doubtless be proposed if the constitution is ratified.

Corruption is still rife at top level of French government says The Sunday Telegraph.

This follows on from the reports last week on the massive corruption trial in France. Some 47 people – among them Chirac's closest former political allies – have been on trial over a vast "kickback" scheme allegedly run from city hall while Chirac was mayor.

Now, Eric Halphen, the French judge who first uncovered the corruption is claiming that bribery and cronyism are still rife at the highest levels of government. He insists that France's political elite remain effectively untouchable.

"These cases in no way signal the end of high-level corruption in France," he says. "I have had several companies tell me recently that, despite all the court cases and scandals, the old organised systems of corruption, kickbacks and bribes are still intact, and anyone hoping to secure a deal with the public works sector has to play ball."

French politicians corrupt? Is the Pope a Catholic?

"Graham Morris, a farmer and contractor near Builth Wells in mid-Wales, is an angry man. Like thousands of other sheep farmers, as this year's lambing season approaches its height, he is being confronted for the first time with the horrendous implications of one of the greatest regulatory shambles Brussels has ever created."

So writes Booker in this week's column, and he does not exaggerate. His first piece describes the effects of one of the most grotesque pieces of legislation to emanate from the European Union – and that is indeed saying something.

As large numbers of lambs inevitably die or are stillborn on the hills, farmers are no longer permitted to bury them or to leave them to provide food for foxes, red kites and other wildlife.

Under the EU's Animal By-Products Regulation, 1774/2002, all "fallen stock" of any species must now be gathered up and placed in sealed containers, to be collected by contractors, at a cost of up to £50 an animal, then transported, sometimes hundreds of miles, to be rendered down or incinerated in a licensed plant.

So hopelessly impractical is this scheme that for nearly two years ministers were forced to turn a blind eye, in defiance of EC law, in allowing farmers to continue disposing of their stock by natural means, as they have done since time immemorial. But this year the Department of the Environment, Food and Rural Affairs and its Scottish and Welsh counterparts are insisting the law must be obeyed, on pain of fines up to £5000 for each offence.

Farmers must thus wait up to five weeks to have the rotting, stinking carcases of their animals collected, often by vehicles so filthy and infected that they make a mockery of hygiene or "biosecurity". These are then moved by public roads in a way which, as Mr Morris points out, "not only risks spreading infection to other farms, but could be a hazard to human health; as for instance by exposing pregnant women to the risk of infectious abortion".

The entire front page of this week's Farmers Guardian is devoted to the "fallen stock shambles". It pictures an Anglesey farmer burying a dead sheep in deliberate defiance of the law, so that visiting Easter holidaymakers are not exposed to the "filth and stench" from rotting carcases.

But the crisis facing farmers is only part of the much greater disaster being brought about by this regulation, introduced by Brussels in 2002 in hysterical over-reaction to fears of BSE and foot and mouth. In 2003, when the ban on landfilling any "animal by-product" was due to come into force, it became clear this would be catastrophic for the retail trade, which every year must throw away thousands of tons of meat and dairy products no longer fit for human consumption.

When Tesco and other firms pointed out that it would be impossible to separate out all the meat, fish and dairy products from their plastic wrappings, which rendering plants cannot take, their clout was sufficient for Brussels to give food retailers an exemption from the law until December 31 2005.

But that date is now fast approaching, and, as the British Retail Consortium last week explained to me, says Booker, there is still no way large parts of the retail trade in Britain and across Europe can hope to comply. A BRC food scientist said that technology is being developed to split food from wrappings, but "we are still two or three years from having a workable system".

So ill-drafted was the regulation that even now the retail trade has been waiting for months for a precise definition from the Commission as to what constitutes an "animal by-product". Does it, for instance, cover "honey nut flakes", because they include honey? Is it therefore a criminal offence to dispose of them by landfill?

Last week Defra confirmed the Commission is adamant that the law must come into force by 31 December, even though it still has no idea what quantities of food this will involve. Those rotting carcases waiting for collection on Welsh farms are a fitting memorial to the obscene absurdity of a law which in every respect defies reason.

It is impossible to embellish this story. There is simply no justification for this law which embodies the very worst of the madness that afflicts Brussels. We can only pass on to the next story.

This one picks up on a "poignant plea" that has gone from Westminster to the fragrant Margot, the "bag lady" charged with "selling" the EU to the peoples of Europe. It is signed by Jimmy Hood, the Labour MP who chairs the European Scrutiny Committee, which sits in secret examining the avalanche of new legislation which pours out of Brussels, so it can go through the charade of being rubber-stamped by the UK Parliament.

Each year tens of thousands of pages of this stuff passes across the desks of the MPs on this committee, all written in impenetrable Euro-speak, liberally sprinkled with those buzzwords such as "sustainable", "transparent" and "stakeholders" now de rigeur throughout our system of government.

But for once the worm has turned. One document was such a bureaucratic self-parody that the MPs asked their chairman to write to Ms Wallstrom, pleading for something to be done to "improve the way in which the Commission communicates with the public".

As an example they singled out this passage:

The complementarity between the Agenda and both the mid-term review of the Lisbon strategy and the sustainable development strategy makes it necessary to ensure close dovetailing with other Community policies on the internal market, competitition and trade. This approach implies taking full account of social and employment dimensions in other Community policies, and vice versa. The Integrated Impact Assessment tool developed by the Commission provides a valuable methodological contribution. Accordingly, the Social Agenda draws its inspiration from the Constitutitional Treaty, which proclaims the importance of an integrated approach.

Expect warblings of solidarity from European leaders for the hapless SecGen of the United Nations, Kofi Annan. For he will be named and somewhat shamed in Paul Volcker’s report on the food-for-oil scandal that is due to be published on Tuesday.

Kofi Annan will be criticized for his management practices (given recent scandals to do with the UN bureaucracy and its employees’ behaviour on the ground, that must rank as one of the understatements of the century) and for failing to see that there might have been a conflict of interests in his son being employed by Cotecna, a Swiss firm that had also been tasked with monitoring the supposedly humanitarian relief programme.

Should a man who cannot perceive that there is a certain clash of interests here be allowed out on his own, let alone be given a position of any responsibility whatsoever? But this is the world of the tranzis we are talking about. In it, as long as you make the right noises, your actual behaviour does not matter.

Cotecna, it seems, paid $400,000 to Kojo Annan between 1996 and 2004. Or so it seems for the moment but as the figure has already been adjusted upwards several times, we cannot be sure what it will be in the final reckoning.

Kofi Annan’s office maintains that he did not know the precise truth of his son Kojo’s employment but there have been serious complaints about lack of openness on the part of Cotecna about the terms of their agreement with the younger Annan.

The report by the supposedly independent but really rather UN-friendly Volcker commission will be only one of several. There are others, full of senators and representatives, who feel less friendly towards the SecGen and less anxious to save him from any further embarrassment.

But even this document is likely to shift attention away from Annan’s recent somewhat incoherent reform proposals and an even more recent report that has proposed a thorough overhaul of the peacekeeping operations in the wake of the various sex, mass rape and procurement scandals in Africa and the Balkans.

The one thing all these different stories have in common is the certainty we all have that nobody will be disciplined or punished for any of the misdemeanours. One could argue, of course, that another display of European loyalty towards the SecGen will be punishment enough for the man.

Speaking of anniversaries, this year, Germany’s Bundeswehr celebrates its 50th birthday, an event marked by Heinz Schulte, editor of the Griephan newsletter for the defence and security industry, in the current edition of DefenseNews.

Set up in the wake of the failure of Monnet's European Defence Community (EDC) – which was rejected by the French parliament in August 1954 - the establishment of an independent German army represented a major victory for then chancellor Konrad Adenauer. Now, however, things look very different and strike at the heart of the aspirations for European "superpower" dominance.

What is particularly striking is that, immediately prior to the unification of Germany in 1991, the Bundeswehr had a force size of 495,000, including 218,000 conscripts. But no sooner had the Wall come down than planning was underway for a new army, the upshot of which has been continuous rounds of cut-backs.

By 2010, the current plan is for an army of 250,000 soldiers – of which only 55,000 will be conscripts. This transformation is supposed to produce a mix of forces, which would include 35,000 as intervention forces, 70,000 intended for stabilisation operations and 106,000 conducting support operations. Under this plan, the Army will consist of five divisions and 12 brigades. There will only be six armoured battalions left.

But where the transformation is dramatically apparent is in this “Structure 2010”, which is to be adopted as of 2007. The service is to reduce its fleet of main battle tanks from 2,528 to 350, and its infantry fighting vehicles from 2,077 to 410. Artillery pieces numbers will be slashed, from 1,055 to 120 and helicopters from 530 to 240.

And it is not only the ground forces that will be savaged. Within the Air Force, the same radical reductions are planned. The number of combat aircraft is to be reduced from 451 to 262 in 2015 — about 180 Eurofighter Typhoon and 85 Tornado aircraft. There will be three Luftwaffe divisions instead of four.

The Navy has managed, with the exception of the naval fighter-bomber, to retain all capabilities even though it has fewer platforms. In 2006, the Navy takes on a new fleet structure. The current five flotillas will be merged into two operational ones. The main platforms will include about 12 frigates, five or more K130 corvettes, six U212 submarines, fewer than 20 mine warfare units, three task force supply vessels and four tenders, 30 MH-90 helicopters and eight P-3C maritime patrol aircraft.

Heinz Schulte puts this into political perspective, writing that it is an open secret that the three-way split of the Bundeswehr into intervention, stabilization and support forces was a fig leaf for the de facto halving of the Army. Furthermore, he writes, many issues are still unsettled. For instance, the Luftwaffe’s acquisition of a third Eurofighter tranche is not yet set. The total Eurofighter fleet could fall to between 120 and 140 aircraft rather than the planned 180.

Yet, despite these transformation ambitions, Berlin is still entertaining the idea of playing in the European "Champions League" with France and Britain, both of which have aspirations for establishing fully functional Rapid Reaction Forces. But, says Shulte, if it want to join the big league, it must back these ambitions financially, or it will operate one level below its most important European partners.

In fact, with the planned force structure and the lack of financial commitment – and the lack of any strategic planning for the German defence industry - Shulte sees only marginal interest in security and defence matters among the German political élites.

And, he writes, the chosen path of transformation for the armed forces is irreversible. But he concludes that "time will tell whether Berlin can and wants to close ranks with Paris and London." In fact, though, on the fiftieth birthday of the Bunderwehr, the indications are that Germany has given up any ambitions of being anything other than a "super-soft" power, and is not seriously entertaining any plans manitain a significant military capability.

As my colleague remarked recently, one really must wonder whether Europe – and certainly Germany – actually wants to play a part in the world. Given also the UK cutbacks and the impoverished state of the French armed forces, the answer seems to be firmly in the negative.

The ambitions seem to remain but, behind them, there is nothing of substance.

Yesterday, as a reader reminded us, was the birthday of the Treaty of Rome, signed as it was on 25 March 1957. In two years time, the Treaty will celebrate – if that is the right word – its fiftieth anniversary.

It is strange, therefore, that nearly fifty years after the signing of a Treaty which, amongst other things, supposedly brought freedom of movement of capital to its member states, we should read today in The Daily Telegraph an account of how one of the original signatories to the Treaty – Italy – still has not implemented that basic provision.

Under the heading: "Banks put Italy's siege mentality to the test", by Ambrose Evans-Pritchard, we learn that Italy is facing "a major battle with Brussels" over moves to block two high-profile attempts by foreign banks to break into its sheltered financial sector, the most impenetrable in western Europe.

It appears that Spain's Banco Bilbao (BBVA) has made a £4.5billion all-share offer for Banca Nazionale di Lavoro, while Holland's ABN-Amro has plans to boost its 13pc holding in Banca Antonveneta to a controlling stake.

These plans, writes Ambrose, have become a test of whether the EU's single market is genuinely open to cross-border bank mergers, or whether national regulators can effectively shut out foreign bidders.

Yet, despite the idea of cross-border mergers being central to the ethos of the Community, we are told that Italy's élites "have reacted with horror to the twin assault." Roberto Maroni, the labour minister, has called the moves "acts of aggression" against the Italian nation. "Italy runs the risk of being gored and cudgelled because our companies haven't managed to gain entry to European markets," he said.

Had his British equivalent uttered something so utterly non-communautaire, one can imagine that the serried ranks of continental politicians would have been quick to denounce perfidious Albion. But, from a senior Italian politician, it goes unremarked except in the business section pages of the Telegraph.

Yet this is not even an isolated incident as, for the past 12 years, Antonio Fazio, "the autocratic governor of the Bank of Italy", has scuttled every foreign bid for an Italian bank. He has also blocked internal mergers, preferring a fragmented network of regional banks. Predictable, his legacy is the least efficient banks in the eurozone.

However, this time Fazio faces the wrath of the EU commission, which is now itching for a fight to show it is serious about breaking down the EU's commercial barriers.

Charlie McCreevey, the single market commissioner, has written a blunt letter to the Bank of Italy warning that Brussels will not tolerate the use of unjustified pretexts to block proposed mergers. It has been taken as a clear threat of legal action at the European Court of Justice.

Fazio has already let a deadline for a first decision slip past this Monday, gaining time for the bank Monte dei Paschi di Siena to start preparing a home-grown offer. BBVA, Spain's second-largest bank, is flush with cash after the Iberian boom of the last decade. It already owns 15 percent of BNL but has now signalled its intent to mount a controlling bid.

Holland's ABN-Amro has repeatedly sought to increase its stake in Antonveneta, which operates in the Veneto region, but has been rebuffed by Mr Fazio at every turn. It has not yet made formal offer.

Ambrose quotes CreditSights, the bond research company, saying: "This is the first serious test of the central bank's resistance to foreign bank takeovers. It could open the floodgates for mergers and acquisitions not just in Italy but across Europe."

The interesting thing is why it has taken the commission so long to take action and why Italy, which is rated as one of the most Euro-enthusiastic states in the Community, is so reluctant to abide by the provisions of a Treaty for which it is so enthusiastic.

The answer is almost certainly that the Italians subscribe to the more general principle of "do as I say, not what I do". But it is this inherent hypocrisy which has done much to erode British support for the "project" which gives lip-service to a "level playing field" that is about as level as the north face of the Eiger.

There should be little surprise at the capacity of our noxious European minister, Denis MacShane, to cause offence – especially when he is referring to anyone who does not fawn over his beloved "Europe".

It was thus in August last that he mortally offended the Eurosceptic community in Britain by describing them as "latent xenophobes".

Now, with the lack of tact for which he is justly famous, he has had a go at the French – not that his Blog sees any problem with that, except that MacShane is supposed to be a British minister who is above all that.

Actually it is the French "nons" who have attracted MacShane's ire and, according to The Times, he has managed to mortally offend them as well.

His sin, written up by Charles Bremner, is that he made a pun during a talk to students in Bordeaux on Thursday night. He warned them, in French, not to listen to "the reactionaries, the neoconservatives, the neo-communists and les neo-cons who are trying to persuade you that voting 'no' to the treaty is a good thing."

Unfortunately, the word con is a term of vulgar abuse, roughly translating as arse or stupid bugger.

This has attracted a sharp response from Henri Emmanuelli, a former minister and one-time Socialist leader, who has broken with his party line to campaign against the constitution.

He has demanded that Jean-Pierre Raffarin, the prime minister, must react. "In the name of the French men and women who have been insulted in this manner, and in the name of the parliamentarians who have been grossly vilified, I ask M Raffarin to demand apologies from the British Government," he said.

As we know from old, however, it is not MacShane's style to apologise for anything. But perhaps les Frogs are being a little unfair to the man, as he may not have intended the pun. After all, he is also well known for not knowing his con from his coude.

Today's Daily Telegraph sports a headline: "MPs want drivers to pay to use peak-time roads" which, at first sight, has little to do with the EU.

The subject is the publication yesterday of the transport select committee report on road charging, entitled "Road pricing – the next steps" and the newspaper’s report focuses on the finding that "motorists should pay for using busy roads at peak times".

The same story was also picked up by the BBC, which on its website ran a similar report, saying that: "Gridlocked roads or paying by the mile is the stark choice facing British motorists, says a group of MPs."

The BBC website also retails ministers' views that a national scheme is not feasible before 2014, something which the Telegraph also mentions, saying that "there was no technology for a nationwide scheme" but that MPs say "it should be available in the next 10 years."

What is missing from both reports, however, is any indication of what technology will be used, and why it will take until the remarkably precise date of 2014 for it to become available.

The select committee itself, however, is not so reticent. It points out two things. Firstly, any national scheme will have to rely on satellite positioning technology and, secondly, any UK system must conform with Directive 2004/52/EC of 29 April 2004 on the interoperability of electronic road toll systems within the Community.

This directive aims to "create a European electronic road toll service in order to secure the interoperability of toll systems in the internal market and to contribute to the elaboration of infrastructure charging policies at European level", and it almost goes without saying that the core of the system will be the EU’s Galileo satellite positioning system – which will not be operational before 2014.

Thus, under our very noses, our own Department of Transport and the EU are conspiring to develop an EU-wide road charging system, based on the EU's Galileo satellite system, about which the media seems to be totally silent.

The particular attraction of this for the EU, of course, is that it helps fund the Galileo system. But it will also create a centralised "charging infrastructure! over which the EU will have total control. In the fullness of time, this could provide the mechanism for the EU to charge its own direct tax, levied through the road charging system.

Strangely, this prospect is not explored by the transport committee, which also examined the Galileo satellite system – in November.

Then, however, the committee reported that Parliament and the public were not sufficiently aware of Galileo’s costs and benefits which, it said, "in some cases appear to have been poorly articulated, and insufficiently assessed." Even then, though, road charging was central to the economics of the system. The committee failed to mention it.

There seems to be something of a lack of joined-up thinking here. But there is also, a particularly egregious example of “hidden Europe”. As always, the political and practical implications are profound. Methinks we should be told what they are.

Fifty-five percent of French voters are now opting to deep-six the EU constitution, according to the poll for the weekly Marianne magazine, to be published on Saturday.

This is the third consecutive poll showing a majority for "les nons" and, despite Chirac's histrionics over the services directive, it shows an increased majority against the constitution.

The breakthrough came just over a week ago when le Parisien reported 51 percent had turned against the treaty, followed a few days later by the Ipsos poll for for Le Figaro, which showed 52 percent.

Interestingly, opposition to Turkey's possible EU entry remains one of the main reasons cited by those in the "no" camp, with a desire for EU policy to have a "social dimension" close behind. However, twenty percent of "no" respondents said they would use the referendum as a chance to cast a protest vote against Chirac.

As with the previous polls, half said they would either abstain, cast blank ballots, or remained undecided.

The campaign is due to go up a gear after Easter as Chirac has pledged to take a greater part in the proceedings. But, with l'escroc's current unpopularity, this could prove a mixed blessing.

Despite Chirac's triumphalism over his "victory" on the services directive, we did suggest that the game was far from over.

That much seems to be endorsed by today’s report in The Times today, which suggests that Blair is planning a reprisal for Chirac's coup.

The report is in part based on Blair's report to Parliament on the European Council, when he told MPs that France would ultimately be outvoted on the issue. His vision of a liberalised EU jobs and services market had been backed in private discussions by "many other EU governments", he said, and would eventually prevail.

While l'escroc was boasting to his Cabinet that the so-called Bolkestein directive had "enabled me to show how Europe really works", Blair on the other hand was reminding MPs that "the final decision will be by qualified majority voting".

Chirac was telling his Cabinet that: "The Commission proposes, but the Council, which is to say the member states, takes the decisions." He made no mention of QMV and, of course, the Council is not "the member states" but an EU institution.

Much of Chirac's posturing, however, is almost certainly for domestic consumption, aimed at getting him past the crucial 29 May vote, but one wonders whether l'escroc has really got a handle on things.

Nevertheless, supporters of the beleaguered "yes" campaign in the French referendum say that the wind had shifted in their favour after what they saw as a robust demonstration by Chirac that France could still impose its will on a union that France deems to be dominated by Britain.

Francois Hollande, the Socialist leader, whose party is officially campaigning for a "yes" vote, said: "He should have done that a long time ago and we would not have had all the confusion." The "no" camp, however, merely mocked Chirac, stating that he had only achieved a delay in the progress of the directive.

They, like the rest of us, know the Single European Fat Lady hasn't sung yet.

2005 may well turn into another Annus Mirabilis. While the economist Joseph Stiglitz has been warning all those who would listen and many who would not that if Paul Wolfowitz takes over at the World Bank there would be riots in the streets of developing countries, the real demonstrations and riots have been happening for other reasons.

Strangely enough, it is their own oppressive governments and fraudulent elections that people object to. Think Georgia, Ukraine, Lebanon and now Kyrgyzstan, where the demonstrations since the highly unsatisfactory elections last month have brought about the desired result.

The Supreme Court has annulled the result and recognized the outgoing parliament as the legitimate authority. President Akayev is reported to have fled the country with his family and the opposition MP Ishinbai Kadyrbekov has been named as acting president.

The country seems to be in chaos at the moment, though in some places members of the opposition and demonstrators have joined the police to try to restore some order.

The United States has reacted cautiously, expressing a desire to see democracy triumph but also a wait and see attitude. The Russian Defence Minister Sergei Ivanov, one of President Putin’s siloviki, on the other hand, let fly at the opposition and interim government:

“I think that the so-called opposition, which has not controlled anything for a long time, should have the brains to find enough strength to calm down and bring the situation to the plane of political dialogue and not a dialogue of screams,shattering windows, destroying buildings and freeing prisons of criminals.”

In September last, we wrote of how, quietly, or so it seemed – and certainly without any noticeable publicity in the British media – the EU was gearing itself up to become a significant military space power.

That was in the wake of a meeting of the EU Council's "politico-military group" which recommended that the Union's member states should pool all their space navigation resources, fuse their civilian and military programmes and allow for collective access to them. The priority, the Council said then, "should be for Europe to define common standards for all planned and future Space programmes".

This is turn followed on from the publication in June of the Commission's White Paper on space which, as we noted then, bore the somewhat provocative title of "A New Frontier for an Expanding Union", more so when its sub-title was as "action plan for implementing the European Space Policy".

Considering that space policy does not become an EU competence until or unless the EU constitution is ratified, the very fact that the EU was undertaking serious studies on developing this area was, in itself, alarming, and it is very clear that the EU is proposing an extended European space policy to support, in its own words, "the achievement of the European Union's policy goals".

Effectively ignored by the mainstream media, policy development has continued apace and now a little-noticed provision stemming from the White Paper has come to fruition. That was the setting up of a "Panel of experts in the field of space and security" to provide the EU commission with a report "on the current EU needs for multi-use capabilities in accordance with the White Paper on European Space Policy".

The purpose of the panel of experts was to "define synergies and make proposals for inclusion in the European Space Programme", acknowledging the role of space "and the available capabilities for civil and military use".

After many months of toil, the report of the panel of experts is now available and very interesting reading it makes too. Writ large throughout the whole document are not only the space ambitions on the Union but, in that space assets have crucial military applications, what also come clear are the military ambitions.

What the panel is proposing is a network of satellite communications, space-based Earth observation platforms, a "signal intelligence" capability, space-based early warning systems, a navigation system – the Galileo programme – and a space surveillance system.

Ominously, though, while the report is larded with "touchy-feely" sentiments about humanitarian aid and details of civil applications – including disaster relief and co-ordination of emergency services – what comes over unmistakably is the plethora of military applications, and the central role of space assets in the organisation and functioning of the European Rapid Reaction forces.

With the European Defence Agency as an observer on the panel, it is also no surprise to see a prominent place in the report for “network enabled operations”, to which we drew attention recently in the context of the EDA’s ambitions. Clearly, the panel has recognised that modern military forces are totally reliant on space assets and it is determined that there should be a European capability in this important respect.

In this context, the report looks at "interoperability". In terms of military procurement strategies, it says, there is a very clear shift away from procurement of large platforms (i.e., tanks) towards network enabled capabilities. These are increasingly focused, is says, on the needs of joint and combined forces in which interoperability lies at the heart of the requirement.

"This is not just a buzz word", the report goes on to say. "It is the word":

Interoperability between communities of interest within Europe is seen to be essential. This increasingly means interoperability of command structures as well as network protocols. European should evolve its own view of network enabled capability and ensure that researchers, development teams and the operational users are all clear about the vision that this embodies.

With his usual genius for self-publicity, l'escroc Chirac has dominated The Daily Telegraph front page today, and many other newspapers besides.

However, as far as the Telegraph goes, it would be hard to devise a less flattering headline: "Chirac betrays Blair on Britain’s rebate".

Blair, so the story goes, was humiliated yesterday when l'escroc attacked Britain's £3 billion EU rebate hours after the prime minister had come to his aid over the services directive. Instead of repaying the Blair by avoiding sensitive issues before a likely May election in Britain, he went out of his way to complain about the rebate Margaret Thatcher won in 1984.

"We can only truthfully achieve an appropriate balance if we reopen the debate on the British cheque [rebate]," he said. The rebate might have had some justification when it was secured by "Monsieur Thatcher" - an interesting slip of the tongue - but it could "no longer be justified; it is from the past".

The theme of Jacques the bully is picked up on the inside columns with a piece by David Rennie under the headline: "Chirac bullies Blair into saving French jobs".

Rennie starts his piece with: "The European Union summit that ended last night will not go down in history for its achievements. Instead, it will be chiefly remembered for the way President Jacques Chirac rode roughshod over Britain in his quest to shelter the French from the harsh winds of competition," reminding us – as if we needed it – that, for Tony Blair and other victims of Mr Chirac's bullying, it was nothing new.

This "thuggish behaviour", however, Rennie asserts, will be a lesson that the EU's newest recruits from eastern and central Europe, will not quickly forget. One diplomat from a new accession state described the French attitude as "all about French egocentrism, about Chirac and his referendum".

Instead of compromising, Mr Chirac railed against free-market reforms, or what he called "ultra-liberalism", denouncing this evil as "as great a menace as communism in its day". To Eastern Europeans who lived through real, as opposed to rhetorical, communism, it was a final straw.

That, incidentally, was not the gloss that was put on it by the Polish news agency (PAP), which had Polish prime minister Marek Belka "satisfied with the compromise". At his post-Council press-conference, he told reporters: "We understand concerns of other countries but we will do everything possible to ensure a full, even if gradual, liberalisation of the service sector."

The underlying agenda was clear from his subsequent statements, when he explained that Poland could not disregard reactions to the liberalisation in some EU member states, notably France. The stakes were too high, because nobody wanted a rejection by France of the EU constitution in a referendum due in May, he said. For Poland it was most important that the draft would not be rejected but serve as "the basis for further work."

That theme is picked up by the Telegraph editorial which proclaims: "France and Germany put the brakes on growth", declaring that, "When the Lisbon agenda was launched five years ago, it did not seem outlandish that the EU could build 'the most dynamic and competitive knowledge-based economy in the world’ by 2010."

Well, the paper is entitled to its opinion but it certainly has come to the view shared by the Blog that, by the close of the latest "summit"” in Brussels yesterday, that ambition was sounding like a bad joke.

The Telegraph notes that Messrs Chirac and Schröder have their eye on the domestic scene and that their calculations are "blatantly self-serving". Tony Blair's position, it adds, "is less easy to understand." In order to help Mr Chirac over the referendum, he did not bridle at diluting the services directive. Yet a "no" would let him off the hook as far as a British referendum is concerned, and his reticence over the directive was rewarded yesterday by a French attack on the British rebate.

But what is delicious is the "take" from the Europhile Guardian which, in muted coverage, reports that:

Mr Chirac's bullish interventions came as little surprise to Mr Blair and other European leaders who accept that the French president must adopt a harsh tone if he is to recover his position ahead of the EU constitution referendum in May 29.

… they seek that supersoft power everywhere. Our readers will, no doubt, recall that the EU was going to be the ruling power of the twenty-first century (an unwise prediction, given how much of the century is left) through its incredibly effective soft power. Indeed, it has already shown its mettle by influencing the legislation of … well, we are not sure who, but, according to Mark Leonard, Russia and Rwanda.

The trouble is that the supersoft power seems to be absent whenever there is something actually going on. The EU and several of its member states find themselves on the margins and beyond them as far as the developments in the Middle East are concerned.

Surely, there should be some interest in the former Soviet Union. It seems no. There are quite interesting post-electoral developments in Kyrgyzstan that remind one of similar events in Georgia and Ukraine.

At the moment it is not clear which way things will go and we have had all the usual warnings about democracy not meaning much to the people, tribal warfare, ethnic strife, blah-blah. But it seems that the people want free and fair elections.

The situation is being closely monitored by the US and Russia, both of whom have military bases in the country and by the OSCE. But where is the supersoft power of the EU? Have we no interest in seeing former Soviet republics turn into democracies?

Or is it that, as usual, there is no particular EU policy and the member states are again mesmerized by the endless nit-picking debates about budgets, rebates, 3 per cent of GDP and, of course, that wretched constitution.

How this reminds one of the days around the signing and implementation of the Maastricht Treaty. While the Soviet Union fell apart, Eastern Europe became free and Yugoslavia disintegrated into bloody chaos, the member states of the then European Community focused completely on that treaty.

Then there is Chechnya. The European Union has just been accused by the Human Rights Watch in its report on the situation in that part, of ignoring the abuses. According to the ISN Security Watch

“The 57-page report describes 43 disappearances that occurred in 2004, mainly carried out by pro-Moscow Chechen forces, and cites claims that there have been between 3,000 and 5,000 disappearances there since 1999.

By contrast, the Russian Prosecutor General’s Office said last December that just over 2,437 people had been “abducted” since the beginning of the operation in the province in 1999. Of those, 347 had been subsequently released by law enforcement agents, according to Russian authorities.”

“Earlier, Putin had instructed the government to step up the negotiating process for Russia’s integration with the EU in terms of economics, security, culture,education, and scientific research. All of these issues will be further discussed at the next EU-Russia summit in May.”

“The EU wants to see a political solution in Chechnya that commands the broad support of the population, and which respects Russia’s territorial integrity.This must be underpinned by respect for the rule of law, human rights, and democratic principles. The way forward is to hold early free and fair elections.”

That is what The Times is saying of l'escroc Chirac, the man who has subdued Bolkestein's monster but is not safe yet.

Their Paris correspondent, Charles Bremner, reports that France "heaved a sigh of relief yesterday" after it emerged from the European Council (he insists on calling a “summit”) that Chirac had won his battle against the monster that has been terrorising his country.

So it continues in a jokey vein, the article making comparisons between Frankenstein's monster and Bolkestein's directive. It has come to crystallise everything that France fears in the EU - and its new constitution in particular, writes Bremner. The people once again are up in arms against the ruling élite, as represented by Chirac's administration and the Socialist opposition, he adds.

The buzz-word has become "liberalism", the enemy of the people, the word having assumed demonic status, instanced by a rural caller to the France-Inter breakfast programme on Tuesday. He summed up the debate, saying: “They are closing my village post office, so how dare they ask me to approve the EU constitution?” he said. In this logic, post offices are closing because the “liberal” EU is forcing France to hand over public services to capitalists.

Daniel Cohn-Bendit, the Franco-German Green leader, 1960s revolutionary and no friend of naked capitalism, voices his frustration over his adopted country: "The degree of irrationality is incredible," he says. "Obviously, when the French cannot change something, they just say that they are going to stick it to liberalism, even if they do not know what that means." My heart bleeds for the man.

Bremner also reports that the pro-European Establishment is appalled that the "no" camp has managed to demonise a constitution that was proposed by France and drafted under the chairmanship of Giscard d'Estaing. Arguments that the treaty contains much that is in France's interest have been drowned out by the seductive arguments of the "no" camp.

Furthermore, Chirac is taking much of the blame. Having cast himself as anti-liberal champion of the welfare state, he has spent his presidency blaming Brussels and the "Anglo-Saxons" for the "liberal" drift, to the extent that first Brussels and now the constitution has become irrevocably linked with "liberalism".

Last minute changes in casting may not be enough. And if the verdict is "non" on 29 May, concludes Bremner, Chirac knows will spend his final two years in office as the man who lost Europe.

It's taken long enough – eight years to be precise – but the .eu domain is now scheduled to be available from this year. At last, the evil empire will no longer have to offer as its web site www.europa.eu.int but can join the ranks of nations that have their own top-level domain.

So says the Internet Corporation for Assigned Names and Numbers (ICANN), the body that oversees technical matters related to the Net. It has finally approved the application from the European Registry of Internet Domain names (EURid). Companies will be able to start registering their trademarked names with the .eu suffix in a four-month "sunrise period" which will begin in late 2005.

During this period, only public bodies and holders of rights, such as trademarks and company names, will be allowed to register the names using the .eu top-level domain. After that, general registrations will be granted on a first-come-first-served basis.

The only question is then, who will be the first brave soul to attempt to register www.f**k.eu.

Courtesy of the Transatlantic Intelligencer which last week brought us news of how the French left-wing were regarding the EU constitution as an American plot, this week we find, from the same source that the right-wing is also proposing to take American bogyman line.

However, according to Le Figaro, the brainchild of this line, François Baroin, is not going to argue that a vote for the constitution is a vote for Bush. Oh no, nothing so simple. He proposes to resort to "a little used argument":

Who is going to be happiest about a victory of the "no" vote in France? Le Pen? [French Socialist critic of the "constitution", Laurent] Fabius? Villiers? [Communist Party Chief Marie-George] Buffet? No. It's Bush. To say "no" to the constitution is to say "yes" to Bush.

Tucked away in the Telegraph piece we referred to in our previous posting is the following paragraph:

Mr Blair wants to strike a discreet deal on the rebate after the expected May 5 general election. He fears that a long-running row could spill over into the referendum campaign and overshadow efforts to sell the case for the constitution.

They all seem to have fallen for it. The Times is saying: "Blair backs down as French resist greater freedoms for EU workers", while The Guardian has it that: "Barroso seeks to calm fears of a Thatcherite laissez-faire Europe" and The Independent tells us that: "Chirac digs in to defend French vision of EU against Blair's free-market liberalism".

Even the Financial Times has: "EU leaders back changes to services directive" and only The Daily Telegraph is left trailing, with: "Blair under pressure to help Chirac win constitution vote".

The Times leads the pack with the statement that: "Tony Blair has given in to French demands for a 'far reaching' revision of controversial plans to streamline employment regulations across the EU after President Chirac of France declared that the free market policies championed by Britain were “the new communism of our age".

Blair, we are told, agreed after a major row to water down the proposals to open up Europe’s market in services to help the French Government to avoid defeat in May’s referendum on the European constitution and to protect the "European social model".

And so on it goes. The Guardian had José Manuel Barroso trying to "allay Franco-German fears that he is attempting to impose a Thatcherite vision on Europe". The Independent painted a picture of "a defiant French president" demanding a series of concessions to water down controversial British-backed plans to open up a large sector of the European economy to fresh competition, and The Financial Times told us that Chirac had "won backing" from EU leaders for a significant rewrite of the services directive.

What none of the assembled hacks seem to have done was read the communiqué issued by the Luxembourg presidency which, in it is original French, presents a somewhat different picture:

La directive ne sera pas retirée. C’est la seule Commission qui pourrait le faire. Le Conseil européen n’a pas le droit de donner des injonctions de ce type à la Commission européenne. Si la directive était retirée, nous donnerions l'impression que l’ouverture des services aurait disparu de l’agenda européen.

The directive will not be withdrawn. Only the Commission could do this. The European Council does not have the right to pass injunctions of this type to the European Commission. If the directive were withdrawn, we would give the impression that the opening of services had vanished from the European agenda.

This is more a piece of entertainment than anything else, a bonne-bouche as our allies (mistrusted as was accurately described in Yes, Prime Minister) say over the water.

It seems that the Mairie of Paris, having nothing much on its hands this week, the Olympic inspection team having been and gone, looked at the sad situation of water in the French capital.

Now, the sad situation does not mean that there is no water. Nor does it mean as, alas, it does on this side of the Channel that you have to ask for a glass of water several times in a restaurant or café until the waitperson deigns to hear you.

No, what they are worried about is that Parisians do not like to drink tap water. It is all a question of marketing, huffs and puffs an official. (Speaking from personal and very unpleasant experience, it is a lot more than just a question of marketing, but let us return to our muttons.)

51 per cent of the capital’s inhabitants never drink anything but bottled water, which, incidentally, is considerably cheaper than here. Others will touch what they consider fairly polluted stuff but only if they have to. Presumably, children will drink whatever comes their way.

However, Parisians are not simply tempted by information such as half the capital’s water comes from artesian wells and the other half goes through three separate filters. They might not believe that.

Instead, they are being given glass water carafes with stoppers, designed by Pierre Cardin and carrying the logo Eau de Paris with the Eiffel Tower (connection between the two are unclear).

The 30,000 carafes are carefully designed to be fitted into the refrigerators de luxe once filled with delicious Parisian tap water. The first of these were handed out outside the Hôtel de Ville yesterday to mark World Water Day.

Somehow, one gets the feeling that the day was not supposed to be a fashion statement, bearing in mind that large parts of the world have no proper drinking water anywhere within many miles and bearing in mind, also, that providing clean water throughout Africa is one of the projects the Copenhagen Consensus suggested as being highly valuable as well as cost effective

And talking of efficiency, just how much did this little stunt cost the tax payer and which tax payer is putting up the dosh?

Says the Daily Telegraph editorial today: "The European Union has been both unprincipled and inept over its arms embargo on China."

And your point is?

More on the fight against poverty or, at least, some people’s interpretation of it. Thanks to the Adam Smith Institute that keeps a wary eye on the various lunacies of the state machine, we hear that the Scottish Arts Council, funded by the taxpayer and lottery money has been handing out awards to far-from-starving poets.

One recipient of the £30,000 “Creative Scotland” grant is Robin Bell who has a “special interest in individual identity and national diversity”. (Eat your heart out Keats.)

He is proposing to

“… to produce a book of poems and a feature length piece suitable for broadcast based on his observations of the G8 conference, examining Scotland’s place in today’s global culture”.

“… will be ideally placed to capture the feeling of the G8 conference as it will all be happening next door to his rural Perthshire cottage”

Readers of this blog will know that we keep a close watch on developments in the sporting world, particularly on developments in the EU sporting world. As we pointed out some time ago, sport is to become an EU competence under the terms of the constitution.

Whether that will involve the Commission dealing with British footballers and football fans remains to be seen. We suspect President Barroso will balk at that.

In the meantime a conference was hosted by the King Baoudoin Centre and the European Policy Centre in Brussels on sports participation in the EU. Well what else can one do about sport but to hold a conference? We presume there were no compulsory physical jerks at the beginning or running on the spot in the middle. In fact, it is curious that, given the subject, we have heard nothing about the content and amount of food consumed during and between the intensive discussions.

Curiously enough, this week’s Sunday Telegraph ran an article about children playing games in school playgrounds or, rather, not playing them because of the endless health and safety regulations. One might think that this would worry the great sports wallahs that gathered for the conference.

Not so, but far from it. Health and safety regulations, many of them products of the EU regulatory machine, were not discussed. Instead Dr van Bottenburg from the W.J.H. Mulier Institut in the Netherlands (honest!) presented a paper on sports participation in the EU.

Unfortunately, the study seems to have been marred by loose definition of sports participation and insufficient data, particularly from the new member states. But Dr van Bottenburg was less than sanguine.

It seems that the situation has actually been getting worse even in the old member states:

“He observes that there there was a significant rise in the number of people taking part in sport between the 1960s and 1990s but that over the past ten years this development appears to have stagnated in a number of countries (Finland, the Netherlands, Belgium, Austria, Portugal, Spain and Slovenia), or has begun to decline (UK and, possibly, France; among young adults in Sweden and, as regards time devoted to sport, the Netherlands and Denmark; in a competitive and championship context in Sweden, the Netherlands and Italy).”

“… he will act together with industry and consumer groups, health experts and political leaders to tackle obesity. The Platform will pool expertise and act as a forum where good practice from one country is disseminated and replicated across Europe.”

Well, we all know where l’escroc Chirac stands on the services directive. And, to judge from an article penned by Slovakia's deputy prime minister and finance minister in the Financial Times, his views do not entirely accord with the aspirations of the Slovakian government.

"Europe must compete from within," writes Ivan Miklos, declaring that "the road to global competitiveness starts with competition at home."

Miklos believes that EU enlargement presented a unique opportunity for the Union to improve its economic standing by unleashing beneficial competitive forces internally, an opportunity it missed when countries joining the Union were not given free movement. "Good economics - and the European economy - lost out to populist politics."

With free movement of labour blocked, writes Milkos, capital, started moving more briskly. Companies from the 15 older member states began to invest more heavily in the ten new members after enlargement.

Still some people tried to hinder the forces of competition. The commission was even asked to produce an analysis of how the EU should deal collectively with the "problem of delocalisation" - the migration of manufacturing jobs abroad.

Unsurprisingly, the Commission discovered that no such problem existed. In line with other similar studies, it also concluded that the relocation of some productive functions could increase the global competitiveness of European companies. This is only one way in which such investments could increase economic welfare in both the investor's home country and the recipient country.

But there was a catch, according to the study. To reap the full benefits, the advanced European economies would have to implement some necessary reforms. Those reforms, including in the labour and product markets, have been on the agenda for quite some time. As a basic condition for improved competitiveness, they have even formed an integral part of the EU's Lisbon agenda. Unfortunately, since most such reforms tend to be quite unpopular, few countries have had the determination to implement them. These countries include most of the new EU member states, he adds.

Miklos is nevertheless convinced his country’s reforms have contributed significantly to increased competition and thereby also to the competitiveness of the entire EU. In fact, he argues, "some of our innovative solutions could probably serve as an inspiration for economic policy in the older member states as well."

One of those reforms was the introduction of the flat tax. Pioneered in the 1990s by Estonia, it was implemented "with great success" in Slovakia last year, with Miklos suggesting that his country now had one of the simplest, most transparent, and least distortive tax systems in the world – a system that has made Slovakia an even more attractive destination for investment.

Yet it has also contributed indirectly to the improved competitiveness of the German economy. For example, the concern that jobs would move east became one of the main incentives for liberalisation of labour relations in the German corporate sector. The first results of these changes are already visible - leading German companies recorded a dramatic increase in export performance and profitability last year.

Miklos asserts that the EU has now developed to the point that administrative intervention cannot halt the advance of internal competition - it can only be slowed down. The most recent attempt, he says, is the attack on the services directive. "If we want the updated Lisbon strategy to be taken seriously this time," he concludes, "efforts to hamper the directive must be resisted."

All good stuff this. But in the real world, many people – often unversed in economic theory - are adversely affected by large influxes of cheap labour, even if it is in the short-term. Miklos does not explain how democratic politicians should go about "selling" free movement of labour to those people and how they make such a policy electorally popular.

The heads of states and governments have tonight gathered in Brussels for their annual economics European Council, which will last until tomorrow.

And, defying the laws of economics, if not gravity, the first thing they undertook was to approve the changes to the growth and stability pact agreed by finance ministers last Saturday.

In what can only be described as a collective psychosis, however, the leaders then lauded the changes – which have every economics authority in Europe tearing their hair out in despair - as necessary to spur growth in lean times.

L'escroc Chirac was particularly voluble, declaring that the "amended" pact contained "more intelligent" monetary rules that will be "more accepted and more respected." Just which planet is he on?

Schröder chipped in with some patronising comments for Jean-Claude Juncker, telling the world he had done "a top-notch job." German finance minister Hans Eichel, who should have known better, then said that the new pact "is economically more sound".

Displaying an economic illiteracy not normally associated with German finance ministers, he then went on to say that the looser rules made economic sense "because they free up public spending that can trigger growth." And since when did public spending – especially on the scale of the German economy, trigger growth.

Clearly not having heard the maxim, "when you are in a hole, stop digging" – or whatever the German equivalent is - he then declared, with every sign of satisfaction, that the pact, "can now be used in an economically smart, growth-oriented way".

And now that this inconvenient matter is out of the way, the assembled heads of states and governments can now get down to another little round of collective psychosis as they discuss the EU budget for 2007-2013, to say nothing of fudging that services directive.

Noises are being made both in America and in Europe that maybe, perhaps, the Chinese arms embargo might not be lifted this year.

“We” are, of course, still committed to its lifting. After all, France and Germany need those orders, though, as French Defence Minister Michèle Alliot-Marie tried to explain in Washington a couple of weeks ago, lifting the embargo would not mean more arms being sold while at the same time it will ensure that the Chinese do not develop their own arms. That famous Gallic logic seems to have failed her.

Several things made the immediate lifting of the embargo difficult. One was the unremitting American pressure that came from the Bush administration and Congress.

Condoleezza Rice reiterated several time both during and immediately after her trip to Asia that lifting the embargo would be seen as assisting the destabilization of the area. These views have been echoed recently by Japan and India and worries expressed by Russia, Australia and other Pacific countries.

After visits by French and British ministers, Javier Solana stepped in and sent a top level envoy, Annalisa Giannella, to explain to the Americans … well, what precisely?

The need to lift the embargo? The advisability of such an action? Its lack of importance? Whatever it is she told them, according to the New York Times, “Ms Giannella was said to have persuaded no one, especially in Congress”.

In fact, after her visit

“Congressional leaders reiterated their opposition to lifting the embargo, in some cases threatening retaliation by blocking purchases of European military equipment for American forces”.

“Europe wants to move forward on the embargo, but the recent actions by China have made things a lot more complex. The timeline has become more difficult. The timeline is going to have to slip.”

On the eve of the annual economic European Council, The Daily Telegraph reports today the ascerbic comments of José Manuel Barroso on what he regards as the failure of the French political élites "to explain the constitution" to their voters.

They should "do their job", and "make an effort " to French voters, who are turning against the treaty. It was not the commission's fault, said Barroso, if the debate on the French referendum had been side-tracked by issues such as the distant prospect of Turkey joining the EU. "If there is confusion in French public opinion, it is not our fault," he added, just to make sure he had been understood.

Barroso is, of course, under considerable pressure. He is facing demands to come up with a cure for the economic woes of the European Union while, at the same time only having the services directive in his pocket – which l'escroc Chirac and his cronies have taken agin.

He is also confronted not only with a split between member states – viz Poland - but also in his own commission. Being conciliatory to France would risk widening splits elsewhere so, instead, the commission president is taking the calculated line of rebuffing Chirac in the hope that he can keep together a fractious coalition long enough to get an endorsement of his plans.

Hence, he has little option but to tell Chirac "to work to clarify public misunderstandings" about the EU constitution, adding that "The French referendum is not on the services directive." His parting shot, though, was particularly pointed, when he stated that he could not "accept the idea that because there is a referendum in one country, the commission cannot continue with our own work programme."

The trouble is that The Telegraph suggests the collapse of voter confidence in France "is tied to an increasingly surreal debate in France about an obscure piece of EU legislation, which proposes slashing the bureaucracy required by language teachers, architects or other 'service providers' if they move from one EU country to another."

This directive, it says, has become a symbol of French fears that Europe is under the control of an "Anglo-Saxon" cabal, determined to impose Thatcherite employment laws across the EU, and destroy the cosy French system of lavish benefits and worker protections.

The trouble is that, positioning it in this "Anglo Saxon" context, as our previous piece demonstrates, polarises a debate that is far more complex and has significant implications for all the economies of the EU member states. At best, the directive has mixed blessings, although its one great advantage seems to be that it could be the issue on which the French referendum will fall.

It thus took the Europhile Chris Davies, leader of the British Liberal Democrats in the European Parliament, therefore, to point out Barroso’s dillema. Said Davies, Mr Barroso's defence of the commission was factually correct, but politically wrong-headed. "I want to see a Yes in the French referendum on May 29," he said. "I agree entirely with what Barroso just said, but if he loses the constitution treaty in the process, he won't have done any of us any favours."

For a hard-pressed London householder, for whom plumbers or electricians are rarer than hens' teeth and twice as expensive, the thought of a ready supply of willing, competent and cheap Polish plumbers is highly attractive.

For Polish plumbers, access to the UK market is a good deal. On a salary of £200 a month in their home country, it makes sense to jump on a Ryanair flight and head for London. A few weeks or months sleeping in a doss house, living off take-aways, working all hours and forgetting things like weekends and bank holidays, and they can send a relative fortune back home. A few years and they have enough of a nest-egg to set up in business back home, and live very comfortably indeed.

That is the reality of the EU's services directive and the free marketeers are applauding the initiative as a major liberalisation of the EU's internal market. After all, the argument goes, the Single Market is about freedom of trade and services account for something like 70 percent of the economies of EU member states. "Liberalisation" could add €30 billion to the member state economies and create an extra 600,000 jobs, so the mantra goes. Everybody is a winner.

Actually, though, everybody is not a winner. What happens if you are a British plumber or electrician. Not the most popular of species, granted, but what about the many honest, diligent and skilled craftsmen who have gone to college, done their training and worked their way up? They earn their living, they look after their families, buy their houses on the inflated British market and pay inflated British prices for food, services and all the other goods that make life comfortable. What about them?

And it is not just plumbers. It's lawyers, architects, surveyors, veterinary surgeons, doctors, caterers, builders and blacksmiths – any other profession and occupation where a service is provided to the public or business. All or any of them could face cut-price competition from anyone else in the EU, and especially from the Central and Eastern European countries where, at present, labour rates, taxes and living expenses are low.

Of course, economic theory would suggest that, over time, the various economies would begin to converge. Wages in high-cost countries would be driven down and those in low cost countries would rise. But how long would that take, and how much disruption and heart-ache would be caused in the interim?

And then, given that there would be for the foreseeable future a ready supply of cheap service-providers, where would be the incentive for our children to go to college to learn the skills, to take the examinations and acquire the experience for a whole range of occupations – if the end result is that they have to compete with low-cost operators who are quite happy to accept privation and hardship in order to progress in the world?

Possibly, the end result would be the closure of any number of occupational training colleges, the permanent export of a range of skills and our long-term dependency on workers from other member states.

And then how do we pay our way? With many of our own children preferring to go on the dole, turning to crime, or relying on parental support well into their thirties, how do we motivate a new generation and make it economically self-reliant? And how to we deal with the increasing resentment as people see more and more jobs taken by foreign workers?

In other words, whatever the real and potential benefits of the services directive, there are problems attendant on it, and questions to be answered. But the questions are not even being asked. It is about time they were.

Mark Steyn in The Daily Telegraph today takes a look at "the strange death of the liberal West", noting that "almost every issue facing the EU - from immigration rates to crippling state pension liabilities - has at its heart the same glaringly plain root cause: a huge lack of babies."

Human inventiveness, he writes, depends on humans - and that's the one thing we really are running out of. When it comes to forecasting the future, the birth rate is the nearest thing to hard numbers. If only a million babies are born in 2005, it's hard to have two million adults enter the workforce in 2025 (or 2033, or 2041.

He links this with the highly sensitive issue of abortion – territory in which this Blog is not disposed to tread – but he does acknowledge that this issue is itself symptomatic of the broader crisis of the dying West.

Since 1945, Steyn tells us, a multiplicity of government interventions - state pensions, subsidised higher education, higher taxes to pay for everything - has so ruptured traditional patterns of inter-generational solidarity that in Europe a child is now an optional lifestyle accessory. Thus, he notes, by 2050, Estonia's population will have fallen by 52 percent, Bulgaria's by 36 percent, Italy's by 22 percent.

This is the political issue that will determine all the others, he concludes, with the payoff line: "it's the demography, stupid."

Avowed fans that we are of Steyn, we would hesitate entirely to disagree with the man, and he is far from the first to draw attention to the growing demographic crisis that is increasingly pre-occupying planners.

However, in the context that people are living longer and are more healthy, and where there are a wider variety of productive tasks that do not impose strenuous physical burdens, it seems a little simplistic to argue that the problems confronting the West are entirely due to a lack of babies.

Surely, another crucial factor is the setting of the current retirement age at 65 – and age set in 1889 by Bismarck at a time when only a very small proportion of the population was expected to live beyond that age.

And it is not only the question of people retiring at that age. This is taken as a "benchmark" with considerable numbers taking early retirement – some in their fifties – when they almost certainly have years of productive life ahead of them.

In an age when "modernisation" seems to be the watch-word, and almost everything seems to be open to change – sometimes just for the sake of it - it does seem odd that an age limit set by a German chancellor at the end of the last Century but one is taken as sacrosanct.

With the "social model" so firmly entrenched in the psyche of European leaders, however, it would be a brave politician who dared suggest that a population that has enjoyed unprecedented health in a stable political world should pay for that privilege by working for that bit longer in order to avoid burdening successive generations with unmanageable debt.

Not least, an economy which was not struggling to fund an ever-increasing pension liability could afford to invest in families and babies, putting tax incentives in the way of married couples and children, at least to ensure that the cost of furnishing the nation with a new generation is more equitably spread.

But that would be too much to hope for. The Western political sclerosis, typified by the dirigiste European Union, does not allow for innovation or imagination. Instead, we are locked in the past, bound by the ghost of Bismarck.

We are used to "stinging attacks" delivered against the EU by our own politicians, not least the egregious Gordon Brown, but these are usually couched in generalities and invariably avoid making criticisms against specific countries.

But not so Polish politicians it seems. The man widely expected to become Poland's next prime minister has directly attacked France and Germany over their stance on the services directive, saying it is a "scandal" that it is being blocked.

This is Jan Maria Rokita, currently a senior official in Poland's centre-right Civic Platform party, who has declared that, "If we don't manage to create a coalition to fight against this social protectionism, then there might be an impression that the entire EU will rather contract than develop."

Perhaps no one has yet told the Poles that it is distinctly non-communautaire to attack the colleagues – but then, since when did the Poles give a damn anyway.

With nearly ten million people relying on agriculture, for an industry that can support maybe two at most and remain competitive at a European level, unless an outlet can be found for their surplus labour, no Polish politician is going to stay in power for very long anyway.

For Rokita and his ilk, offending France and Germany is the least of their worries. A certain lack of diplomacy is a small price to pay.

So, Mr Friday thinks he can reform the UN does he?

He can't. See here.

The once mighty Bundesbank, responding to the changes to the growth and stability pact agreed last night is complaining that the so-called reforms will "decisively weaken" the pact.

The Bundesbank said it is "seriously concerned" about the proposed changes, especially as they will "water down" the 3 percent GDP deficit limit. It also said the changes to the pact could impair the framework of ECB monetary policy.

There was a time, of course, where not even a German chancellor could do anything without the permission of the Bundesbank. How the mighty have fallen.

Featured in The Guardian, The Daily Telegraph and other newspapers today is the sorry tale of corruption in high places which threatens to "dynamite" the French political establishment

This cannot at all help Chirac's referendum campaign as 47 people have been in court today – some of them his closest former political allies – on trial over a vast "kickback" scheme allegedly run from city hall while Chirac was mayor. And, to add to the embarrassment, on of those in the dock, Guy Drut, is now a member of the team coordinating the Paris Olympic bid.

The case involves Chirac's RPR (Rally for the Republic - now UMP) party, whose officials were alleged to be siphoning off millions of pounds in bribes from construction companies in exchange for contracts worth £2.8bn to build and maintain secondary schools in the Paris area. Altogether, £60m in bribes between 1989 and 1996 - the year after Mr Chirac's 18-year tenure at city hall ended – is estimated to have been paid out

Four former RPR ministers, including Guy Drut - the 1976 Olympic 110m hurdles gold-medallist - 24 company bosses and several high-ranking party officials are among the accused. Civil servants, businessmen and public works executives are also accused of benefiting from the scam, dubbed the "lyceé dossier". Most have admitted that they knew of the scam, and if convicted of a range of corruption offences they could face up to ten years in jail.

Chirac, often known as l'escroc, remains immune from prosecution, or even questioning, for as long as he remains president. And, despite statements by investigating judges in the case that they had "strong and concordant evidence" that he was at the very least aware of the scheme, he has consistently dismissed any suggestion of his being implicated as malicious and unfounded nonsense.

But his credibility is not helped when Michel Roussin, Chirac's chief of staff for more than a decade - both while the president was mayor of Paris and prime minister – is accused of "complicity in and receipt of the proceeds of corruption".

Louise Yvonne Casetta of the RPR is also one of those accused. She was already at the centre of another party funding scandal involving fictitious jobs at the Paris town hall, which caused the downfall of former prime minister Alain Juppé. As the RPR's unofficial treasurer, she has already testified that it was Mr Roussin's responsibility to inform Mr Chirac of all corporate "gifts" to the party.

Further evidence of the president's involvement came in accusations by a former property developer and senior RPR official, Jean-Claude Méry, made public in 2000. In a videotaped confession, Mr Méry, who died of cancer in 1999, accused Mr Chirac of setting up the covert fundraising system. He said he had helped many companies to win city hall contracts in return for the bribes, usually of around 1.5 to 2 percent of a contract's value.

Describing how he once handed over a suitcase containing £500,000 to Roussin in Chirac's presence, Méry said that total payments to the RPR reached "£3.5m to £4m every year for more than seven years, all under my direction". "We worked only on orders from Mr Chirac," Méry added on the hour-long tape.

Other former Paris officials have also implicated Chirac in their testimony. The former deputy director of the city's public works department, François Ciolina, told investigators that Chirac was "the inspiration" for the scam, and that the coffers of the RPR party were "the main beneficiary".

However, illustrating the corrupt nature of French politics, Chirac's right wing party is not the only one involved. Prosecutors allege that his party received 1.2 percent in "kickbacks" while the Socialists got 0.8 percent, which explains why the Left have been muted in their criticisms of official corruption.

Now, with the investigation having started in 1997, the trial is due to run through until the end of July, and may have a significant impact on the referendum, where the constitution is being labelled as Chirac's project. Just for once, there seems as if there might be some justice, with the mighty EU project being brought down by the venality of French politicians.

Always volatile and unpredictable, the French electorate seems to be shaping up to taking on Chirac and his constitution (interestingly, it is being positioned as "his"). According to the latest opinion poll of 860 people, carried out on 19-20 March by Ipsos for Le Figaro, 52 percent are now saying that they will vote against the new treaty

This is the second poll in less than a week giving the "no" campaign a lead, the last one being published on 18 March for le Parisien, giving 51 percent "non" and 49 percent "oui". That poll also found that 53 per cent of voters are likely to abstain on 29 May.

In early March, the "no" campaign was only taking 40 percent of the poll and the baseline survey on voting sentiment, carried out by Eurobarometer in December, showed 48 percent in favour of the constitution, 17 percent opposed and 35 percent "don't knows".

The fall-off in support for the EU treaty is attributed to voter dissatisfaction with Chirac's unemployment record, which rose in January to a five-year high of 10 percent. Other factors include the unpopularity of Chirac's centre-right government, fears over Turkish entry into the EU, and the recent focus on a controversial proposal to liberalise EU service industries.

Described by former Socialist prime minister Laurent Fabius as a "foretaste of the European constitution," the so-called Bolkestein directive has been condemned by left-wing activists as a charter for "social dumping" and, although Chirac has himself condemned the directive, the issue has played strongly into the hands of his opponents.

The result of today's poll is said to have caused "consternation" in government ranks, particularly as the main factor boosting the "no" camp is seen as the conversion of many Socialist party voters, indicating that the referendum is taking on an entrenched party-political dimension, something which the government was keen to avoid.

Adding to Chirac's concern is the memory of the 1992 referendum on the Maastricht treaty which was won by just a whisker after the "yes" vote fell sharply in the campaign. And l'escroc also knows that many left-wingers resent having been made to vote for him against far-right leader Jean-Marie Le Pen in the 2 May round of the 2002 election.

But the opposition Socialist party, which is officially campaigning for the constitution, is also deeply embarrassed as it has been unable to hold the line and keep its deep internal splits out of the limelight.

Observers in Brussels are watching with concern as it is unlikely that the constitution could survive a rejection by France. "If France votes no, the constitution is dead," said Daniel Keohane of the Centre for European Reform. "The momentum is on the no side. It's going to be difficult to regain and it's worrying."

Even former EU commission president Jacques Delors is weighing into the fray, warning that a "no" vote would cause a "political cataclysm" in France. "And in Europe it will open up a very serious crisis which will slow down European construction - at the expense of French interests," he said.

But, in the popularity stakes, it is hard to beat Frits Bolkestein, architect of the services directive, who has described the French opponents of his measure as "myopic and xenophobic", claiming that it also demonstrates anti-German feeling in France. "Only in France," he told Dutch TV yesterday, "is the Germanic character of my name so emphasised."

Looks like someone else is getting the measure of the French.

After an emergency meeting of the 12 eurozone finance ministers of the EU yesterday, a last minute attempt to agree revisions to the contentious growth and stability pact have succeeded – subject to the approval of the European Council later this week.

But the agreement represents a huge cave-in to Germany, which has forced through its demand that the costs of unification should be taken into account when calculating its deficit. As this spending accounts for four percent of its GDP, this effectively drives a cart and a team of horses through the pact.

The agreement was reached after nearly 11 hours of talks and it remains an "agreement in principle", with some technical details to be clarified by Tuesday, before the European Council meets.

Austrian finance minister Karl-Heinz Grasser, who in a previous meeting on 8 March complained of “progress… but largely in the wrong direction”, entrered this meeting declaring that it would be "a bit of a joke" to exempt spending on an event that happened 15 years ago, after the fall of the Berlin Wall.

Part of the deal seems to be an agreement by Schröder to give more powers to the EU commission in policing the pact, and it seems that Austria and the Netherlands are also insisting that Germany will only be able to invoke the "reunification get-out" if its deficit is only "slightly and temporarily" above 3 percent limit.

More details may emerge over the next few days and there is still scope for a major bust-up at the European Council, not least because France does not appear to have gained anything from the agreement – although this may simply be because the full deal has not yet been disclosed.

Either way, this makes a mockery of the EU's attempts to reign in the spending of its members and bodes ill for any sustained economic recovery. Still, as long as there is "progress", it does not seem to matter that it is in the wrong direction.

A number of my colleagues are suggesting that, if the pace of European integration continues, it will precipitate rather than prevent another war in Europe. What they have failed to appreciate is that the EU has abolished war – in a way not foreseen by the founding fathers.

For a start, the Single European Tank is still in the Single European Workshop awaiting conversion to ensure it complies with disability access directives. Specifications are also being drawn up to ensure full conformity with the physical agents directive – which limits noise and vibration – although no actual standards have yet been agreed.

Meanwhile, a high level working group is busy finalising the text of the rules of engagement, preparatory to having them translated into the 20 official community languages, a task that will be completed only when they have found a Maltese translator and settled the question as to whether an additional copy in Irish will have to be provided.

The group, however, has recently been given an unexpected extension of time, owing to the difficulty encountered by the EU military planning cell in determining the optimum gender, ethnic and national balance for the tank crew, while Javier Solana is consulting urgently with his colleagues on who to appoint as the tank commander.

The compromise being considered is a rotating commander, with one drawn from each of the member states, each serving his (or her) term for 15 minutes in the tank turret. This proposal is to be considered by the European Council in June 2007.

The EU commission, though, has ordered that use of the gun has been prohibited under the Kyoto protocols because the emissions have not been factored into the trading scheme. No move to order the ammunition can take place until the authority of the commission to make this ruling has been tested in the European Court of Justice, with a preliminary judgement expected in September 2009.

There is a possibility that this situation may be resolved more speedily as the gun may have to be removed completely to allow room for the disabled toilet. However, the European Defence Agency is being difficult about this. It is also being less than helpful about the pedestrian-friendly front and rear bumpers, the high visibility panels, the flashing warning lights on each corner and the motion beeper, as required by the European Road Safety Agency.

And it is being positively obstructive about fitting the guard rails to the turret, the escape ladders and the guard cages around the tracks. A consensus among the defence ministers will be needed to drive these changes forward. There is no immediate resolution, however, to the vexed question of the child-locks on the Single European Machine Gun, but the multi-agency task force is expected to report shortly, as soon as transparency issues have been resolved.

Even then, matters may have to wait until the European Health and Safety Agency has completed its move to its new headquarters in Sicily, where the choice of town seems to have been bogged down in local politics and where the allocation of the construction funds – already spent – is subject to an investigation by OLAF, the EU's anti-fraud office.

When the Agency is in place, it has promised to forge ahead on preparing "on a case-by-case basis" the ex ante validation of external scientific experts of the methodology used for certain impact assessments, in order that it can then produce the risk assessments needed before the tank crew can drive their vehicle out of the Single European Workshop – providing of course that the requisite translations of the safety manuals can be secured.

From his temporary office in the Seychelles, Bjorn Marszalkowski, the Agency's new chief executive, has promised that there are unlikely to be any delays beyond the expected revised timetable for completion in early 2015, but he is refusing to address the question of where to fit the crew and the 25 commanders when the health and safety manuals are stowed inside the tank.

There is also the problem of how many spare drivers will be needed, to conform with the working hours directive on drivers' hours.

At the moment, though, further delays do seem to be certain as Germany and France are arguing about whether the funding for the Single European Tank comes into the remit of the Growth and Stability Pact. The German finance minister is arguing that the costs of fuel should be excluded, while the French are suggesting a new Roadmap to determine acceptable exemption parameters, which they are prepared to waive as long as the tank is repaired in French workshops.

A major row has also broken out between France and Italy about how many additional reverse gears should be fitted - to take account of experience (not) in the Iraqi war - and how many white flags should be carried.

This is further complicated by Spain which has threatened to withdraw its support unless its cohesion funds are increased by 350 percent, while Poland is demanding an increase in its pigmeat quotas or it will back Spain's move. An added complication is that Denmark wants the tank to meet EU sustainability criteria and is calling for all materials used to be biodegradable.

All of this, however, pales into insignificance as the workers in the Single European Workshop are still negotiating their social rights in their workers' council and have not yet had the time to do any work. They are looking to reinforce the constructive dialogue with their social partners before they then move on to discussing pension rights and enhanced stress payments arising from being forced to work on military equipment.

Nevertheless, the new European Council president is confident that the project will be fully up and running in time to meet the Berlin Plus Plus Plus Agenda, due to come into force in 2027, as long as the commission brings forward its new Military Vehicles Coatings Directive which will enable the Council to decide on which colour to paint the Single European Tank.

Even here, some delay is expected as the Greens - having lost their argument about the tank being powered by renewable fuels (after that unfortunate accident with the wind turbine) - have now tabled an amendment in the EU parliament, requiring it to be coloured pink, in order to reinforce their solidarity with the gay and lesbian community and to distance the project from the environmental groups who objected to the original choice of olive green.

The final scheme will, in any event, have to await the announcement by the European Youth Convention of the winner of the junior EU citizens' tank colouring competition, which is being organised in 1,728 schools throughout the European Union and associate states. No one is sure whether a REACH-compliant paint manufacturer can then be found. A company in Shaghai is expressing an interest but any order may be blocked as a result of the Chinese government's refusal to agree the reciprocal purchase of 93 Airbus A380 Super Jumbos.

The only bright spot is the United Kingdom, with Blair having agreed to finance the development of the Single European Catalytic Converter for the tank, which will be built by a seventeen-nation consortium in Vilnius - as soon as the Objective 1 funds have been obtained for the new factory and the EU business partnership has approved the scheme.

This aside, not until the final paint scheme has been determined, and agreed by qualified majority voting at the Council, and the final coat applied, will the EU consider, on the basis of a proposal from the commission, whether it can authorise a Single European War.

The column today – the first story, at any rate – is a labour of love. Having dragged himself from his sickbed to write it, Booker nevertheless enjoyed the opportunity of tacking one of the most odious politicians in Nu Labour's ranks – and that is saying something – the egregious environment minister, Elliot Morley.

Last week, Morley made the mistake of having published in the Sunday Telegraph a letter attacking fly-tipping as an "anti-social and potentially damaging crime". He was not prepared, he said, to tolerate the criminals responsible for it any longer.

What made this outburst "curious", Booker writes, leading the reader gently to gave at the elephant trap about to be constructed for the minister, was that Mr Morley himself recently authorised one of the most glaring examples of fly-tipping in the country. This was the granting of a licence for a further 200,000 tons of rubbish to be dumped this year in one of the most beautiful bays in Cornwall.

The local community along the shores of Whitsand Bay, south-west of Plymouth, is outraged by Mr Morley's agreement that the Ministry of Defence should be allowed to use their bay to dispose of vast quantities of spoil being dredged to clear a channel in the nearby Tamar estuary. Video evidence shows that this includes rubber tyres, metal offcuts and piles of assorted man-made rubbish, which has already turned the clear waters of the bay into a dirty fog, inflicting serious damage on the seabed and marine life.

The protesters, who include local politicians, such as Tory county councillor Sheryll Murray and Lib Dem MP Colin Breed, scientists, GPs and representatives of tourist businesses, are baffled as to how Mr Morley could have agreed to the dumping without a proper environmental impact assessment.

The highly-respected Marine Biological Association nearby has offered to assess the scheme, but – amazingly - Morley preferred to rely on his own officials from the Centre for Environment, Fisheries and Aquaculture, whose report is still not available months after the scheme was given the go-ahead.

What makes the Whitsand Bay dumping scandal even odder, adds Booker, is the contrast it provides with the fate of the Cornish Calcified Seaweed Company, forced to close at Christmas when English Nature refused to renew its licence to dredge for the dead remains of calcified seaweed off Falmouth, for use as a valued organic fertiliser.

A scientific report had shown that commercial dredging was doing much less damage to the seaweed deposits than natural wave action. But English Nature - which has not objected to the Whitsand Bay dumping - ended the licence to meet its targets under EC legislation.

Now work to clear a channel to Falmouth harbour will require the dredging of 174,000 tons of calcified seaweed. But when the company asked whether it could buy this for use as fertiliser, English Nature ruled that the seaweed remains - worth millions of pounds - must be dumped at sea.

Morley's letter last week was, of course, a reply to Booker’s item reporting that the cause of the current epidemic of fly-tipping is the deluge of EC environmental directives which have recently made it much harder to dispose of waste legally.

Since Mr Morley – like the BBC - astonishingly, denied that there is any connection, Booker suggests he sends for last year's special issues of Your Environment, published by the Environment Agency, which focussed on how "waste experts fear new waste rules could see illegal dumping soar this summer".

Here he would see his own officials predicting that new EC rules greatly extending the categories of waste classified as "hazardous", combined with their massive reduction in the number of sites licensed to take such waste, were about to create a waste "nightmare", with "criminals dumping it illegally" in an epidemic of fly-tipping.

Morley's officials have proved to be spot on. Yet his only response is to write petulant letters to the press, making claims he surely must know are not true. To compound this strange behaviour, he himself authorises perhaps the most reckless example of fly-tipping anywhere in Britain.

Why minister like Morley are so keen to parade their environmental credentials, and support the EU’s dire laws, defeats me.

Anyhow, for Booker's second story, he recounts how a year ago today he was talking to Hans-Martin Tillack, a German journalist. At six the previous morning he had been woken by six Belgian policemen, who came into his flat, held him prisoner for 10 hours, then confiscated his computers and all his papers.

This was done at the behest of the EU's anti-fraud unit, the "Office européen de lutte anti-fraude" or "Olaf", following what turned out to be a wholly fabricated charge that Tillack had paid for evidence to be used in articles exposing EU corruption in Stern magazine.

When Mr Tillack went to the European Court of Justice to prevent his papers being handed over to Olaf, the ECJ last Christmas found in the EU officials' favour, even though it was shown that the evidence on which they had ordered his arrest was concocted, and that the judgment was in clear breach of rulings by the European Court of Human Rights that a journalist has the right to protect his sources.

Mr Tillack's ordeal fitted in only too neatly with what has now become a classic pattern. Anyone in Brussels who gets too close to the corruption rife in the Commission will face ruthless attempts to bully and intimidate them into silence. The list of whistleblowers subjected to this treatment grows ever longer, from Bernard Connolly and Paul van Buitinen, the auditor whose revelations forced the resignation of the Santer Commission in 1999, to Marta Andreasen, the Commission's former chief accountant.

Miss Andreasen, who was appointed to clear up the irregularities in the EU's accounts, was sacked last October for doing precisely what she had been hired for. All her efforts to improve the system had been rebuffed, not least by Commissioner Neil Kinnock, supposedly responsible for making the Commission more honest.

Booker then picks up the story we ran on this Blog, commenting on the Muis story broken by Ambrose Evans-Pritchard in The Daily Telegraph.

He draws the same conclusion as us, pointing out what a far cry the commission’s behaviour is from the other face of the commission presented by Margot Wallstrom, its vice-president charged with selling the EU to the peoples of Europe.

Last week, Booker reminds us, she regaled readers of her weekly internet "blog" with a toe-curling account of a recent visit to Ireland, where she described looking in on "a training centre for people with mental disorders", meeting representatives of organisations ranging "from churches to aid workers, to anti-poverty, to environment", and being moved by the sight of a young girl to think sadly that she is too old to have any more children.

Quite what this touchy-feely stuff has to do with the arguments for the European Constitution, Booker writes, is not very clear. But then the two contrasted faces of such omnipotent institutions - the one bullying and the other soppily sentimental - are far from unfamiliar.

For his final story, Booker is definitely “off topic” when it comes to the EU. He describes how he read with particular sympathy how Michael Howard's wife Sandra found her beloved old banger so comprehensively trashed in a station car park that it was a write-off.

Four days earlier, he had had the same experience, finding my 16-year old Fiesta XR2 in a "Euro Car Park" near Bath station smashed in such an identical manner that today's vandals seem to be working to a manual.

Mrs Howard had to deny reports that the police had arranged for her car to be taken to a breaker's yard. Like her, Booker obtained the statutory crime number from the police (before the RAC with their usual efficiency took my own wreck away).

The only consequence was a letter from Avon and Somerset's finest three days later offering Booker their counselling service, joined in the same post by a council tax demand showing that charges for our "police service" had again risen at twice the rate of inflation.

The thought occurred, writes Booker, that we might be better off handing over chasing criminals to the RAC, while renaming the police the Crime Number Issuing Agency. At least, if they are writing crime numbers, they are not locking people up for not paying their council tax, I suppose.

Jean-Claude Juncker, whose tiny little countrette is currently holder of the EU presidency, is a worried man. An arch-Europhile, who claims to have been "in this European business for 20 years," he fears that the "project" is running onto the sand.

In an interview with the International Herald Tribune, to be published tomorrow, he observes that the willingness of the "European public" to compromise national interests in the name of the "European Union project" – yes, he does call it the "project" - is fundamentally weaker than in past decades.

His great concern now is that this lack of enthusiasm may threaten the pace of future integration.

"People in all our countries are far more interested in seeing their own governments prevailing in Brussels rather than having the government coming back to London, Paris, Berlin or wherever, saying we had to do it because otherwise the EU would be blocked," Juncker wails. "Europe has stopped being an argument by itself."

Faced with this resurgence of national sentiment, however, his remedy is to push harder and faster. He notes that the current generation of European leaders is the first without direct experience of World War II.

Therefore, he says, it "has a responsibility to forge ahead with closer European ties - most crucially, the adoption of the proposed new constitutional treaty - because future generations which are more distant from the war will not do it."

Unless they do that, he warns, the generation after us will not be able to prevent the EU being "split back into its national components with all the dangers entailed." Thus, the next 18 months will be an "exciting and dangerous period" for the EU, with 11 countries due to hold their EU referendums.

So there you are then – another reason for voting for the EU constitution – 'cos if you don't, no one else in the future will. It's now or never, folks.

It is a reflection of the incurable parochialism of British newspapers that, despite its importance, you will struggle to find any mention today of US secretary of state Condoleezza Rice’s visit to Asia this week – in stark contrast to the coverage given to her visit to Europe last month.

To give it is due, however, the BBC Radio 4 programme World at One did feature Rice’s visit as its lead item today, although – as one might expect – did not mentioned the lifting of the EU arms embargo.

Yet this was one of the main issues addressed by Rice in a news conference in Seoul today – her last before leaving for Bejing - when she warned that European weapons technology should not be used by China to expand its military, again warning against the lifting of the embargo.

She was speaking alongside South Korean foreign minister Ban Ki-Moon, when she said that the EU "should do nothing to contribute to a circumstance in which Chinese military modernisation draws on European technology...," adding, "Our view is that it is not appropriate."

And, with more than a hint of steel, Rice went on to say that the United States would maintain its armed forces in the Asia-Pacific region to safeguard the current balance of military power.

Already, however, l’escroc Chirac has reaffirmed Paris' support for lifting the embargo, although when he spoke alongside Friday the leaders of Germany, Russia and Spain on Friday, he declared that Europe will not sell sophisticated weapons to China.

The "European" (i.e., French) position, he said, is "clearly for the lifting of the embargo - without meaning, naturally, that implies the sale of arms and notably sophisticated systems to China."

He really ought to talk to his defence minister Michèle Alliot-Marie. Only recently, she declared that, by selling sophisticated weapons to China, it would reduce that country’s need to produce her own.

Then, joined up government does not seem to be Chirac’s speciality when he represents a country that is at one is so morally superior that it misses no opportunity to parade its human rights credentials, and lambastes the United States for keeping the death penalty, yet on the other hand is so anxious to do business with China which does not even pretend to observe basic human rights.

That much was brought into high focus today by The Sunday Times, with a piece about high-tech, mobile execution vehicles, which retailed an account of the execution on 19 January of Li Jiao, who was executed within 14 minutes of sentence being pronounced.

This is a country which Amnesty International estimates is executing up to 10,000 people each year and which celebrated the lunar new year six weeks ago by putting 200 to death.

Nothing of this, of course, would affect Chirac’s view of the embargo which, after all, was imposed in the first place because of China’s breaches of human rights. But then hypocrisy is something of a traditional for a country of which American writer Fran Lebowitz once said: "To the French, lying is simply talking."

As far as demonstrations go, it was no big deal and, with no reports of the well-practised Belgian police water cannons in action, it was a pretty tame affair.

Nevertheless, more than 50,000 protestors gathered in Brussels yesterday to march against the proposed EU services directive, complaining that the commission's attempt to "open up public service markets" would drive down social and labour standards and threaten jobs.

The demonstration was organised by the European Trade Union Confederation which claims that, if the measure is approved it would provide ample opportunity for competition and privatisation in all public services, including those of general interest such as education and health.

John Monks, secretary general of the confederation was joined by other union leaders including Mickael Summer of the Federation of German Trade Unions (DGB), Jose Fidalgo of Spain's Comisiones Obreras (CCOO) and Francois Chereque of France's CFDT, in leading the crowd in chanting "Stop Bolkestein!"

The name refers to Dutch former EU commissioner Frits Bolkestein, who first introduced the measure – although it has been adopted with gusto by the Barroso commission which regards it as "a key plank" in the strategy to revive the flagging "Lisbon agenda", the programme adopted in 2000 with the aim of making Europe the world's most competitive society by 2010 (Do pay attention and try to stop giggling).

The commission continues to argue that the directive will revitalise the economy by enabling service providers to compete anywhere in the EU, but it has attracted the ire of the unions by introducing the "country of origin principle". This would allow a business to operate in another country under the laws of its own.

The unions fear this will drive "standards and wages" down to the level of the poorer countries, as businesses will be able to set up their headquarters in countries where the labour laws are least costly. Barroso, we are told, has infuriated the unions by saying there was no question of abandoning the country of origin principle.

Rejecting the claims of job losses, he retorted that: "Some people think the European Commission is there to protect the 15 against the new 10. It is not. It is there to promote the general interest of Europe."

The left-wing genesis of the dispute was illustrated by an Italian union demonstrator, Sergio Sinchetto, who told a reporter yesterday that "In Italy, we are already at war with the liberal policies of (Prime Minister Silvio) Berlusconi. We do not want to see a directive that extends this policy on the European scale."

The discontent with the proposed directive is also spilling over into the referendum campaign in France, with even Chirac latterly speaking out against the proposals, demanding that it is taken back by the commission and "rewritten".

Michel Barnier, the French Foreign Minister, condemned it as "social dumping" and even the right-wing deputy Philippe de Villiers railed the proposal that "would permit a Polish plumber to work in France with the salary and employment protection of his own country".

The British government, however, is largely in favour of the directive, although it has reservations about essential services, such as health, and concerns that service companies will be able to evade national taxes in high tax areas by relocating to Central and Eastern Europe where a number of accession states have adopted very low company tax rates.

Thus, although only 50,000 may have taken to the streets in Brussels yesterday, the opposition is far greater than the numbers would suggest, leaving Barroso with a serious problem on his hands. If he gives in, be will be condemned for pandering to protectionist forces and, if he does not, opposition can only intensify. He is damned either way.

If anyone needed any confirmation that Bush's visit to Europe last month was not going to herald a new era of cordiality in transatlantic relations, look no further than recent developments in the long-running Boeing-Airbus dispute over subsidies.

Although both sides had agreed on 11 January to pull back from invoking a fully-fledged WTO disputes procedure, in favour of bilateral talks – setting a three-month deadline for their resolution - the US last Friday decided to call off talks, accusing Brussels of refusing to negotiate in good faith.

The US complained that, although the EU had agreed to a negotiating structure for eliminating large civil aircraft subsidies, over the last two months they have been back-tracking and seeking to change the terms of that agreement.

The breakdown came late on Friday following a telephone call between EU trade commissioner Peter Mandelson and Robert Zoellick, the US deputy secretary of state.

US representatives are now saying that they will go back to the WTO to try to force an end to subsidies for Airbus unless the EU agrees to continue indefinitely a ban on new European government launch aid for the Airbus A350, a planned competitor to Boeing's long-range 787 jet.

Richard Mills, a spokesman for the US trade representative's office, says: "Despite our best efforts, it's clear the EU is unwilling to eliminate launch aid subsidies."

Initially, EU commission spokesman Anthony Gooch played a dead bat, saying that: "If Mr Zoellick is announcing that the negotiations are at an end, Mr Mandelson has not been informed of this development." He added that, while there were difficult issues, the EU trade commissioner "doesn't recognise the portrayal of the state of play as offered by the US side."

Today, however, EU spokesmen are condemning the move as "premature and unnecessary", with Mandelson expressing "regret" at the unilateral action.

The "linkages" to which the US objects include the EU's insistence on ending to tax breaks for Boeing and it trying to bring Japan into the talks, so that Tokyo's support for suppliers to Boeing's 787 will also be constrained.

An EU official is now adding fuel to the fire, denouncing the US complaints as "a completely irrational and incomprehensible response to a difficult but ordinary negotiation." In the same breath, he then called for a resumption of the talks, stating that the EU still regarded 11 April as the target date for a substantial agreement.

Some commentators are suggesting that pressing the case at the WTO would be courting "mutually assured embarrassment", as neither side has entirely clean hands in this dispute

A new chief trade negotiator for the US, Robert J Portman, a Republican congressman from Ohio will shortly take over from Robert Zoellick, but no difference in line is expected. Two men, each new to the job, will now be battling it out, an odd couple taking on a drama that seems to have no end in sight.

Gijs de Vries, the EU counter-terrorism co-ordinator, last heard complaining bitterly that the member states would not do as he tells them, has found one willing listener.

According to the Waltham Forest Guardian (we take our news where we can find them), he told Leyton’s Labour MP Harry Cohen that what he wanted was

“A single EU analysis centre to examine threats from inside and outside the EU and the European arrest warrant which speeds up extradition were two elements of the approach …. [as well as] … better identity documents with digital information to check suspected terrorists' movements.”

“We must make the rule of law work against terrorism.

And we need to have the right balance between measures to protect against terrorism with the right to privacy and the right to due legal process. We should not impinge on the latter more than is necessary.”

According to official figures Greece has recorded a budget deficit in its GDP of 6.1 per cent, that is exactly twice as large as that allowed by the Growth and Stability Pact. To be fair, Greece had massaged figures in order to get into the single currency and has never actually been within the allowed margins.

This, however, goes beyond any previous achievement and is the highest deficit recorded by any member of the economic and monetary union since 1999. The figures may not be entirely unconnected with the financial black hole that was last year’s Olympic Games.

Meanwhile, in another part of the Union, Eurostat has announced that Italy may well overshoot the 3 per cent mark. Not that Italy has ever been within the boundaries but this statement from an organization, whose own financial affairs could do with a closer examination, drew a blistering response from Prime Minister Berlusconi, already busy smiting enemies all around him:

“We're pretty tired of all this bureaucracy. We are really determined to do battle over this because Europe's job should not be to create difficulties for member states, but precisely the opposite.”

Funny isn't it – faced with a problem on the ratification of the EU constition. They only seem to have one response. Be it l'escroc Chirac in France or Jack Straw in the UK. They all bleat about being "isolated".

So it is with Chirac and his answer to yesterday’s poll showing the "nons" two points ahead. Speaking at a press conference with other European leaders today, he ended up bleating: "We will be isolated in Europe", adding that a "non" vote would be a victory for the status quo.

Don’t these people have anything original to say?

What a lovely expression that is: the Big Five (not, I hasten to add, the Famous Five, who were more useful in fighting all sorts of national and international baddies, as I recall).

It is redolent of early twentieth century and inter-war politics. Then it became the Big Three, then the two Superpowers and then there was one with the EU aspiring to be the other and so on.

The Big Five in this case are Britain, France, Germany, Italy and Spain and their interior ministers met this week in Granada to co-ordinate the fight against terrorism. One wonders whether Charles Clarke regaled them with his own tales of woe at the stroppy House of Lords that would not let him pass whatever legislation he wanted in whatever form he wanted.

Anyway, they met in Granada and came to various agreements: to co-ordinate their approach to North African countries in order to be able to deport terror suspects back to their homeland. Actually, the French seem to be doing this already without any co-ordination and a goodly number of the terror suspects in Britain are not from North Africa. But never mind, it’s the thought that counts.

Agreement was reached on better sharing of information on such matters as fingerprinting, DNA, ballistics, criminal intelligence, stolen vehicle and identity theft. The precise method of sharing this information will be decided by a panel of experts to be set up, though the principle of it all was agreed by the ministers at the meeting.

There will be further work to develop exchange of information on people suspected of activities related to terrorism and on sharing information about air passenger movement.

There may be joint action to shut down websites of fanatical groups. This is a little ominous as the definition of fanatical is rather vague. If they mean terrorist then this may be the right time for France and Spain to stop pandering to some of their own Islamic groups and recognize Hizbollah and Arab Jihad as just that.

One cannot help asking: were there no exchanges of information between police forces in the past before the great and good Javier Solana came along and demanded greater co-ordination of activity? Was Interpol not operative? In fact, why do we never hear that word in these discussions?

Could it be that all these agreements have nothing to do with the fight against terrorism and everything with the ongoing attempts to integrate police and judicial activity across the European Union?

In July 2004 the EU established a European Defence Agency (EDA), about which we wrote as recently as last Sunday.

What is particularly offensive about this agency is that its establishment pre-empts the EU constitution which makes provision for this agency to be set up by virtue of Article I-41 3. Without waiting for ratification, therefore, the "colleagues" have gone ahead and set it up anyway.

As a result, it has a somewhat anomalous status, not being formally an EU institution but nevertheless coming under the control of Javier Solana, the EU's putative "foreign minister". As such, it reports to the EU Council of Ministers.

This position was recently explored by the House of Lords European Union Select Committee – the report of which was published this week.

It turns out that the agency is to be funded directly by member states, outwith the EU budget, with the UK contribution being £2.5 million this year and £1.5 million per annum thereafter – which is in addition to our general EU contribution.

On this basis, one of the witnesses to the committee, a certain Dr Sarah Beaver, Director General of the International Security Policy Division of the MOD, sought to represent the organisation as an "inter-governmental" agency.

This cut no ice with Lord Tomlinson, who launched an icy blast at the unfortunate Dr Beaver, telling her in no uncertain terms that it was not "inter-governmental". Having established that it was responsible to the Council, he said, he informed her, with a precision that seems to elude Denis MacShane and the FCO, that:

The Council is a European Union institution. The main European institutions are the Council of Ministers, the European Parliament and the Commission. The Council of Ministers is a formal institution of the European Union. It happens to be made up of ministers, but if they want to meet inter-governmentally, they do not meet as the Council. If they are meeting as the Council, they are a European Union institution.

In another story of the shambles that passes for fisheries enforcement, this week’s Fishing News tells the tale of a Brixham beam trawler which was arrested last Friday in the Western Approaches, seven miles within the French median line, for allegedly having one of its net meshes 2 mm undersize.

Skipper Geoff Cudd and his crew were on the last but one day of a "a very good trip" and were due to land at Newlyn on the Sunday. However, they were boarded by French fisheries officers who checked his nets for mesh size with a regulatory measure. One was measured at 80 mm and then another was checked, which was also at 80 mm – the minimum legal size.

However, after measuring the second net, the officers decided to measure it again and this time claimed it was 78 mm. They threw the first piece of paper recording 80 mm over the side, says skipper, Cudd and wrote 78 mm on another piece of paper.

The trawler, Lady Maureen, was then ordered to steam 160 miles in to St Malo. Says Cudd, the French officers were "vindictive" and "just wanted a weekend in port."

But what is particularly chilling about the tale – as if this was not bad enough – was the experience with the British authorities.

Co-owner Dave Langdon contacted Defra's acting chief fisheries inspector, who was "polite but not helpful". "What are we coming to when the British government will not help his own citizens?", he asks.

Quite.

As the drama over lifting of the EU arms embargo on China grumbles on, giving observers the feeling of a perpetual "Groundhog day", Luxembourg prime minister Juncker is now pledging that he "will do his best" to get the embargo lifted by the end of June – which was always the intention anyway.

Much of the "European's" case for reassuring the US that the lifting the embargo will not lead to high-tech weaponry flooding into China rests on the resolution of the so-called "code of conduct" which purports to limit the types of armaments that can be sold.

Already dismissed as a fig-leaf, arising from the very simple fact that the code has no legal status and cannot be enforced, the pretensions of the Europeans are brought into stark focus by a positively surreal story in the latest edition of DefenseNews which describes how Belgian government, that most communautaire of all governments, has completely lost control over its own arms export policy.

Under the heading, "No control from the top, no coordination", DefenseNews's Brussels correspondent writes that a 2003 decision to devolve arms export authority to the country’s three autonomous regional authorities has left Belgium with no national authority over arms exports.

Furthermore, this "glaring inconsistency" between national and regional interests has been underscored with a recent move by Belgium's French-speaking Walloon regional government to authorise the arms-maker New Lachaussée, Liège, to export a munitions factory to Tanzania. The Walloon government announced its approval of the export in mid- February.

Yet there can be no assurances that ammunition produced by the factory in Tanzania will not make its way illegally to Africa’s conflict-devastated Great Lakes region, especially as the US State Department has previously cited Tanzania’s porous borders as a source of illegal weapons that permeate east Africa.

At the same time, in total contradiction to the Walloon stance, the Belgian national government is brokering reconstruction and stability accords among former warring parties in the Great Lakes region. The Tanzania export decision, therefore, has pitted Belgium's national security interests against regional economic ones.

Says DefenseNews, the problem exists because the federal and three lower governments of Wallonia, Flanders and the municipal region of Brussels have not produced a cooperation agreement for pre-export consultations as called for by the 2003 regionalization decision.

All policy responsibility except for defense, federal tax and social security has been spun off to the three regional governments. Each region even has its own international relations minister, who competes to a certain degree with the country’s federal foreign minister.

The 2003 decision arose from a dispute the previous year, when Flanders opposed federal government approval for arms-maker Fabrique National, also based in Liège, to export 5,500 automatic rifles to Nepal, where the government was fighting rebels.

Many international groups described that conflict as a civil war, and Belgian law forbids arms exports to countries engaged in civil war. Flanders subsequently forced the national government to devolve arms authorization to the regional level.

The lack of an export consultation agreement among the country’s various political authorities "has created a serious lacuna in our arms export regime," said Claudio Gramizzi, arms export researcher here at Groupe de Recherche et d'Information sur la Paix et la Sécurité (GRIP), a policy group.

"We already pointed this out in 2003, that transferring authority to the regional level ran the risk of a contradiction in national versus regional interests," he added. "They took the decision too fast, without thinking through the consequences, and now they’re paying the price."

The cooperation agreement was supposed to prevent this kind of conflict, but bureaucratic inertia has stymied its development, said Gramizzi. “Belgium also held its regional elections in June 2004, and that didn’t help expedite things either,” he added.

But even if the agreement was in place, the GRIP official doubted the regional governments’ ability to assess the complexity of arms exports. “All the expertise has traditionally lain with the federal government,” Gramizzi said. “The regions don’t have this and they haven’t set up the proper kinds of services to do it, whether for resource reasons or whatever. The whole situation is ambiguous and could lead to dangerous contradictions of policy.

"I exaggerate - but not much - when I say this situation could see Wallonia exporting arms to one side of a conflict and Flanders to the other, such as India and Pakistan. It is not logical and not watertight the way things now stand."

Into this absurd situation, we now can see the blandishments on the “code of conduct” in their true perspective. If Belgium cannot even mange its own internal affairs, what is the chance of the 25 EU nations successfully co-operating on enforcing a code which has no legal bite and runs contrary to the commercial interests of many of the major players?

For the EU to throw out the arms embargo, which is shaky enough already, in favour of relying on something even less tenable, simply does not make sense.

It seemed such a good idea at the time – to set up a blog analysing and commenting on EU affairs, trying to make sense of what is happening for the better information of those who will eventually cast their vote in the EU referendum.

"Trying", in the context of making sense of what is happening, however, turns out to be the operative word which, currently, has to be followed by the qualifier "…and failing". A sense of panic now pervades one tries to make some sense of things that seem to make no sense at all.

Take for instance, a piece offered by the Scotsman website this morning which informs us that EU defence ministers are holding talks today aiming to halve the time it takes to send elite battle groups to international trouble spots.

EU officials, we are told, want to secure backing from ministers to ensure the 1,500-strong rapid response units "which the EU is setting up to snuff out potential crises can be ready to deploy within five days of the bloc deciding to launch a mission."

All this sounds nice a cosy except that one of the only operative groups, of 13 which EU member states agreed to set up in November is led by Britain, which has undertaken to provide to troops and other military assets to turn the ambition into reality.

Yet, was it only yesterday that we read in The Daily Telegraph a report of the recent findings of the Commons Defence Select Committee headed: “Defence cuts 'put country at risk'” by instigating cuts in the number of aircraft, ships and infantry battalions which have created “major capability gaps”

Every service has left with only "just enough" equipment and personnel and in some cases too little, says the committee, which adds that "It may take another decade before the capabilities to deliver those requirements are in place. In the meantime, equipment withdrawals and personnel reductions may leave gaps in capability. Those gaps, in turn, may create risks. Some of those risks, in our view, need not have been taken."

Even then, that is an optimistic view as the new capabilities are tied up, on the one hand, with the Future Rapid Effects System (FRES) for the Army, the carrier programme for the Royal Navy, plus deliveries of the US-built Joint Strike Fighter, and – for the Royal Air Force – trouble-free delivery of "tranche 2" Eurofighters equipped for the ground attack role.

FRES, which was initially supposed to be operational by 2010, now has no completion date attached to it, and the concept specifications have not even been decided, much less translated into a development phase. The aircraft carrier project is totally bogged down, the fate of the JSF project is uncertain, and – given the chequered history of the Eurofighter project – anyone who sets any reliance on deliveries or performance – needs their head examined.

In other words, the UK – which is the most capable (or was) of the forces – does not have the capability to deliver on existing commitments, and here we find “EU defence ministers” blithely meeting to talk about increasing their commitments to the EU’s rapid reaction force.

This gets even more surreal when one reads of the utter shambles taking place in Italy, where the Italian government last October, in a great show of pomp and ceremony, signed a contract with France, jointly to build 27 frigates, grandly known as the Frégate Européene Multi-Mission (FREMM).

Now, we find – according to DefenseNews - that the Italian government has made no financial provision for the ships (each of which cost €350 million) in its defence budget, and is at the point of reneging on its commitment unless it can borrow the money at short notice from commercial banks.

This is the country, incidentally, that is selling off Army barracks to meet a €1.2 billion shortfall of current account commitments on its defence budget.

This is but a tiny snapshot of the situation throughout Europe, where the rhetoric and ambitions of the "colleagues" are consistently failing to match the reality that, if you want to be a military power, you actually have to commit to spending very large sums of money.

What is happening at the moment, therefore, does not make sense. All we can do here, therefore, is to record this and take the advice that we gave to one of our readers – that trying to make sense of something where there is none is the surest path to madness.

According to The Times today, the French are likely to vote "non" in their EU referendum.

The paper reports that a poll carried out by the CSA Institute and published today in le Parisien, the daily newspaper, has found for the first time that a majority of the French are against the project.

The figures break down as 51 percent "non" and 49 percent "oui". The poll also found that 53 per cent of voters are likely to abstain on 29 May.

Of course, these results do not take account of the warehouses full of pre-completed polling slips, or the payroll vote in the French overseas departements – the latter swinging the vote in the Maastricht referendum in 1992 when there was a margin of victory of less than two percent.

However, the Eurobarometer poll published in December showed 48 percent in favour of the constitution, 17 percent opposed and 35 percent "don't knows". With just over two months to go before the vote, the current poll represents a major reversal for l'escroc Chirac.

It is an article of faith amongst a certain brand of Europhiles that the eagerness of neighbouring states to join the EU demonstrates who wonderful the project really is. It cannot be too bad if so many countries are queuing up to join – so the refrain goes.

What price then the response of Croatia, which has had talks on its application to join the evil empire "suspended" sine die because the Zagreb government has not sent fugitive former general Ante Gotovina to the UN war crimes tribunal in The Hague.

According to AP there had been fears of a nationalist backlash and even a wave of collective depression. But a day after the EU the announcement, Croats were nursing their "disappointment" with a sense of humour.

"EU-thanasia," the popular weekly Feral Tribune splashed on its front page Thursday, with a photomontage of foreign minister Kolinda Grabar Kitarovic lying on a hospital bed, applying an ice-pack to her forehead.

Radio commentators quipped that nothing could stop Croatia from moving closer to the EU - citing seismological research that showed tectonic movements were shifting Croatia 15 mm to the northwest every year.

But Alen Orlovic, a computer technician, was more forthright. "If they don't want us, we don't need them either," he says. "We should become a neutral country oriented toward tourism, ecology and producing organic food."

The only person to spoil the fun was a po-faced psychologist who intoned that the news might be "traumatic for politicians, but it's hard to say how ordinary people are dealing with the news." His view was that some people may be using humour to disguise their frustration, while others may have already gone beyond it. "Poking fun" was their way of moving on.

There again, maybe they just see the funny side.

Following on from our story earlier today on the commission’s latest “deregulation” initiative, we note that the Telegraph has also done the story, another in today’s edition under the Ambrose Evans-Pritchard by-line

The story also gets editorial treatment in the City Comment section and we wonder if the headline writers were aware of the irony implicit in the words.

Ambrose's piece gets the headline, "EU orders 'bonfire of the diktats'" and the City Comment goes under: "Breath of fresh air is just what Brussels needs to whip up the diktats bonfire".

Ignoring the fact that turning EU diktats into a "bonfire" would probably breach every environmental directive in the book – and in any event, surely the emphasis sould be on recycling? - the idea that any "fresh air" can emanate from that foetid hothouse of the commission is frankly laughable.

Quite how forlorn that expectation might be is writ large in the commission's press release, introducing the "new initiative". This starts off by claiming:

Over the past few years, EU institutions have put increasing emphasis on streamlining the EU’s regulatory environment to increase its effectiveness. A range of initiatives have been launched to codify, consolidate and simplify existing legislation and better evaluate the likely economic, social and environmental impacts of new regulatory proposals.

Timothy Garton-Ash (whom some of our readers insist on calling Garton-Trash, although I cannot imagine why) is in full flight in the Guardian today, with a "challenge" to the "anti-Europeans". "Where's your story of the future?", he asks.

"We new, sceptically (cheek!) pro-EU Europeans have a great story to tell,a story that is about the past but also about the future," writes the Great Sage. "Our challenge to these old, doggedly anti-EU Europeans is: we hear your story about the past, but where's your story about the future?"

This rather reminds me of the joke about Saddam Hussein when he came to New York to attend the United Nations. On his way into the assembly, he met George Bush senior, who asked him how he was enjoying his stay.

Saddam burst into rhapsodies about American television, which he had been watching in his hotel room, and in particular about Star Trek. But, he complains to Bush, "The programme is missing something. It has Americans, it has Blacks, Coloureds, Chinese, Russians and Europeans, but no Arabs. Why is that?"

"That's because it is set in the future," Bush replies.

Interestingly, you do not see any EU flags on the Starship Enterprise, probably for the same reason. The EU hasn't got a future.

The point that GA misses is that it its something of a truism that every political construct that sets out to define the future always fails. Be it Communism or Nazism (whatever happened to the 1000-year Reich, or Stalin's five year plans?), they always end up in inglorious failure.

The rest of us survive, Mr Garton-Trash – sorry, Ash – by not being so presumptuous as to define what is to come. We are happy to concentrate on the present, hoping we leave it in good shape so that our children can deal with the future.

The latest volume in the Yale University Press excellent and invaluable series, Annals of Communism, is entitled The History of the Gulag – From Collectivization to the Great Terror. This, like all the other volumes, is a collection of priceless documents with learned and detailed explanation.

Not a cheery subject, you might say, but the fact is that people have always found bleak amusement in the horrors of communism. Almost as soon as I started reading the tome I came across the following document:

Excerpt from Order no. 208 by the GULAG of the NKVD USSR

25 December 1938

Secret,

The bureau of complaints of the GULAG conducted an investigation, and an inspection team has found an inadmissible level of red tape in reviewing complaints by citizens and convicts addressed to the GULAG.

At the time of the investigation, 4,000 new complaints were registered, including 125 complaints sent for review by the central party and government organs. The majority of these complaints arrived during the past twenty days. However, the inspection team noticed the entirely unacceptable failure to process complaints received in July, August, and September 1938. Though facing such a high volume of complaints and statements (more than 20,000 each month), the GULAG apparatus still lacks procedures regulating the review of, and response to, these complaints. As a result, incoming complaints are often left unanswered, which leads to a large number of duplicate complaints ….

"And for all of those that say, if you look at the last thirty years, we have lost power to Brussels, actually it isn't true. In the last, certainly in the last eight years, as we, the Labour government, have been more involved in Europe, so we have become more powerful and more prosperous, better able, literally to implement a patriotic case for the European Union."

Jack Straw
Foreign Secretary
BBC Today Programme, 9 February 2005

Apparently not in the online edition (hence no link) Ambrose Evans-Pritchard runs a story in the business section of The Daily Telegraph today headed: "EU will scupper plans to raise duty-free allowance".

Gordon Brown’s budget breaches EU tax rules, he writes, and will almost certainly have to be dropped or modified, officials in Brussels said last night.

The chancellor said he planned to offer travellers a boon by raising the duty-free ceiling on goods entering the EU from £145 to £1000 per trip. Mr Brown had "notified" the commission of his proposal, giving the impression that it was merely a formality.

In fact, Ambrose says, any increase in the EU’s import duty threshold requires a formal proposal from the commission, followed by a unanimous vote by all 25 EU member states, a reminder of how much power has already been ceded to Brussels in economic policy.

A spokesman for Lászlo Kovács, the tax commissioner, said last night Mr Brown's plan had no chance of winning support. One official said the Eastern Europe was certain to block calls for a large increase in the ceiling, fearing a loss of vital customs revenue from travellers entering from Russian and the Ukraine.

"Try telling them that £1000 is peanuts and it won't go down very well", he said. The EU's duty-free allowance has not changed since 1992.

Writes Ambrose, there were suspicions in Brussels that Mr Brown was picking a fight with a policy that faced certain EU rejection to burnish his credentials as a Eurosceptic.

Thank you Mr Brown. How very useful to have a chancellor demonstrate to us how much more powerful we have become since the Labour government became more involved in Europe.

There are occasions when reading commission documents when you have to do a double-take and wonder if their authors actually occupy the same planet as the rest of us.

Such an occasion arose reading the latest commission excrescence , another of its infamous COM finals, so new that it has not even been allocated a reference number.

This one is on Better Regulation for Growth and Jobs in the European Union, the subject of a major initiative in Brussels, flagged up by numerous news sources today, not least The Times

This newspaper’s report sports the headline: "EU aims to slay 'bureaucratic monster'", with Rory Watson in Brussels telling us that the EU commission has moved to shed its reputation as a “bureaucratic monster” by launching a campaign to cut the volume of legislation and regulation that flows out of Brussels each year.

The ambitious exercise, Watson writes, will involve simplifying and repealing some existing laws; carrying out in-depth assessments to determine the economic, social and environmental impact of new laws; and encouraging self-regulation by industry where possible.

Brussels, we are told, will also send a strong message to national governments not to "gold plate" EU directives by adding unnecessary administrative burdens.

The progenitor of this initiative is the enterprise and industry commissioner, Günter Verheugen, who has obviously been told that there is something amiss with the EU's regulatory system hence his statement that: "We all know that Europe's citizens view Brussels as some sort of bureaucratic monster." How very perceptive.

The commission, Watson asserts, intends to sift through all existing EU legislation, sector by sector, to decide where improvements can be made. Verheugen says that 900 separate Commission proposals in the legislative pipeline would be reviewed as well.

The CBI has given a "cautious welcome to the campaign". A spokesman said: "It is a positive move in the right direction" – as opposed to a move in the wrong direction? Adds the CBI, "but the proof of the pudding is in the eating."

We will have a detailed look at this "pudding" later today.

Silvio Berlusconi has announced that he is thinking of gradually withdrawing Italian troops from Iraq. At present there are 3,000 there and some will be withdrawn by September, some by the beginning of next year.

Or maybe not. It all depends how Berlusconi’s election campaign will be going. There is no doubt that his announcement has more to do with domestic politics than with international affairs and the American government appears to be treating as such.

The point is that there is a great deal of dissatisfaction in Italy with that country’s involvement in what they still perceive as America’s war. The dissatisfaction tends to be on the left and in the main stream media but that is enough for our own main stream media to perceive it as being widespread throughout the country. Other people and other opinions do not exist.

Berlusconi clearly shares the opinion that he is vulnerable and, even more clearly, he does not want to be that in his battle with Romano Prodi for the government of Italy. Hence the rather disgraceful and self-defeating payment of ransom for Italian hostages, first the two left-wing aid workers, then the communist journalist. It is still not clear which of those ransoms Berlusconi provided out of his own pocket.

This policy is completely suicidal, as Italian civilians will now be seen to be fair game by all groups in Iraq or Afghanistan that want to augment their budget. It has also led to the tragic events of last week, which ended with the killing of a brave and admirable Italian intelligence officer. And it has added fuel to the traditional “Yankee out” cry of the left, though at present it consists of “Italia out”.

Berlusconi’s semi-announcement comes after a number of other European countries that have supported and participated in the war in Iraq have made similar semi-announcements.

Poland will withdraw several hundred of its 1,700 troops in July with the rest, possibly, at the beginning of the year. The Netherlands have started withdrawing some of its troops and Ukraine is talking of it. (Whether the Ukrainian soldiers will be all that happy remains to be seen. They are unlikely to get as well paid back home as they are in Iraq.)

In Britain, there has been no official announcement and not likely to be, though Sir Menzies Campbell has been jumping up and down and demanding that a similar decision be made. What happens in Iraq itself or surrounding countries matters little to him, though he will undoubtedly jump up and down again if things do not go right.

By contrast, Australian Prime Minister, John Howard, secure in his recent electoral victory, has mooted the possibility of more Australian troops going to Iraq.

According to the ISN Security Watch:

“Australia announced last month that it would deploy an additional 450 soldiers to southern Iraq to provide protection for Japanese engineers working there and to help train Iraqi troops after the Netherlands withdrew its 1,400 troops.”

“Declares that it is the policy of the United States to promote freedom and democracy as a fundamental component of U.S. foreign policy, to see an end to dictatorial and other non-democratic forms of government, and to strengthen alliances with other democratic countries to better promote and defend shared values and ideals.”

Barely reported anywhere, and worth only a brief mention in EU Observer and The Scotsman, on Monday the EU crossed the line into a whole new area of activity which creates an important precedent in the march of European integration.

That event was the agreement by the fisheries council to establish the EU's Fisheries Control Agency, which will be based at Vigo in Spain, dubbed the world capital of illegal fishing.

The real significance of this move – which was reported at face value by those few journals that did not it – is that it represents a shift in historic division between the responsibilities of the EU commission, which traditionally makes the laws, and the member states which enforce them.

Up to now, the only area in which the commission has had a direct enforcement role is in the competition portfolio. But with the establishment of the fisheries agency comes the power of the EU to appoint its own fisheries inspectors and, in due course, operate its own fleet of vessels bearing the EU flag – a putative EU navy.

This much we reported on last year, in early September, again a few days later and then later that month.

In the Scotsman article, Ross Finnie, Scotland’s fisheries minister, is cited, welcoming the initiative. He is quoted as saying: "Creating a level playing field in fisheries enforcement across member states is to the commercial advantage of Scottish fishermen."

He adds: "We argued for, and were instrumental in securing, key reforms to the European Commission’s original proposals. These guarantee greater involvement of fisheries’ interests and ensure that operational control rests with member states."

In fact, as we pointed out in out earlier posts, the agency takes the supreme coordinating role, with the commission stating that it will "assume leadership in the deployment of means of inspection and surveillance". Effectively, the EU will be running the entire fisheries enforcement effort.

The great tragedy of this is that it opens a new chapter on one of the great scandals of the Common Fisheries Policy, where the idea of a common resource has effectively meant that member states – which no longer have control of their own waters – have walked away from effective enforcement of their own fisheries.

Only last week we reported on the growing ecological disaster developing in the deeper waters at the edge of the continental shelf to the West of Scotland and Ireland, where researchers reported that "there is little or no management of these fisheries and existing control and enforcement regulations have little or no impact. Essentially these fisheries remain totally unrestricted."

On the other hand, in today’s Daily Mail, columnist John Edwards interviews the Hasting fisherman Paul Joy, on whom Booker report at the end of January , after he had been prosecuted by Defra for exceeding his “monthly” cod quota, when the quota system did not apply to his type of small boat under EU rules.

In his piece, Edwards also interviews another fisherman, Graham Couglan who described the Gestapo as "better people to deal with" than Defra fisheries inspectors. "They put in a Royal Navy gunboat to skulk about Dungeness," he says:

Do you think it was to arrest foreign trawlers with undersize catch or protected species? Was it hell! They didn’t touch them. They were there to check us out, to interfere if possible. Nobody is fighting for us any more.

Following through our three postings in the Muis e-mail yesterday, here, here and here, we promised an analytical piece today, drawing together the threads and implications.

What comes over from the e-mail, and by far the most important issue, is not that the financial arrangements of the EU are unsound – that we knew already – but quite what an unpleasant organisation the commission really is.

In fact, we knew that already. Bernard Connolloy made that very clear, when he dared to write his book about the "Rotten Heart of Europe", and there are the other "whistleblowers", not least Van Buitenen and Douglas Watt, all of whom have retailed their first hand experiences of what is it like to be at the receiving end of what is, in fact, a very vindictive organisation.

More recently, there is the disturbing case of the German journalist Hans-Martin Tillack, arrested by the Belgian police at the behest of the EU's anti-fraud body, OLAF, and the case of Robert McCoy, who lost his job as financial controller for the Committee of the Regions after revealing to MEPs in 2003 that he had uncovered widespread abuse of travel expenses.

One also must not forget the fate of Dorte Schmidt-Braun, a Danish official who was seriously harassed when she rang alarm bells over corruption in Eurostat, where over €5 million disappeared into black accounts in what investigators described as "a vast enterprise of looting". She received no support from the commission and, while she was not fired, suffered a nervous breakdown and returned to Denmark.

Even then, it is perturbing to learn, direct from the horse's mouth of Jules Muis, an official drafted in from the upper reaches of the World Bank and at the top of the hierarchical tree in the commission that he too was not immune from the vindictiveness, having been told that "we have ways of breaking people like you".

But there is also the dishonesty. For those of us who remember the tumultuous days of the end of the Santer commission, when the whole shabby crew resigned en masse – only to be back at their desks after a long lunch break - the follow-on was Prodi, full of honeyed words about "reform".

What comes over from Muis, however, is that the reforms were resented, were half-hearted at best, and were never in any case fully implemented, leaving the commission still with "sordid accounting" that cannot and is not intended to function effectively.

Nor is this dim and distant history. Muis wrote his e-mail in September of last year and he paints a picture of the commission effectively as it stands today, a sinister "autocratic body with an 'incestuous esprit de corps' that uses its bureaucratic muscle to 'trash' any official who dares to question its methods."

Compare and contrast, therefore that account, with the glowing, "touchy-feely" presentation of the communications commissioner, Margot Wallström, a person we like to describe as "the commissioner for truth and reconciliation".

In her latest blog, she describes her recent visit to Ireland, where she tells us she "saw a training centre for people with mental disorders, a girls college, a very good exhibition on James Joyce and met representatives of civil society: all kinds of organisations from churches to aid workers, to anti-poverty, to environment."

What she doesn't tell you, however, is that she went to Ireland at the invitation of the National forum on Europe, a Europhile propaganda body and then made statements to the Irish media which were clearly aimed at influencing the forthcoming EU referendum, possibly in contravention of the Irish constitution.

Instead, towards the conclusion of her piece, she writes:

I went bowling with two 11-year old boys – both of them utterly surprised when I won! On the way back, I watched a beautiful and mischievous girl and for a moment I felt a deep sadness about the fact that it is definitely too late to have another child – a girl…

I suppose there is some point to the Telegraph's story today, which trains the headline: "Britain 'gets less out of EU than anyone'". Why this should be news at all is anyone’s guess, as that is one of the main points Eurosceptics have been making for decades.

Nevertheless, Gordon Brown has said it and that makes it good enough to put in the paper, with the claim that he had "launched the second broadside in two days at the European Union" as it became clear that a row over the EU and its finances would be one of the defining features of his Budget today.

This "intelligence" was based on a parliamentary answer yesterday by Stephen Timms, financial secretary to the Treasury and one of Mr Brown's junior ministers, who used it "to demonstrate the Chancellor's growing impatience with the EU's financial laxity." According to the Telegraph, "in a rare outburst from a Labour minister," he claimed that the EU's budget system is "unfair" and that Britain gets less out of it than any other member state.

Mr Timms' answer was accompanied by a table of Britain's net contributions to the EU, which showed that in 2003, the latest year for which figures are available, Britain paid £3.7billion more than it got back, even after the rebate of £3.6billion. This makes Britain the second largest net contributor after Germany.

However, says the Telegraph, the figures also reveal that chaotic accounting means nobody is absolutely certain how much Britain contributes. The Treasury's estimate for 2003 is more than the £3.3 billion reported by the Office for National Statistics and the €1.8billion (£1.2 billion) quoted by the EU in its own accounts.

That is something we have always been puzzled by as the Treasury "pink book" figures rarely correspond with those produced by the commission. Apparently, the Treasury has investigated the big differences and says they can be partly explained by the timing of payments and the fact that the EU itself does not count some tariffs. It is rather appropriate though, that we cannot even agree on how much Britian pays.

Nevertheless, Brown believes the position to be unfair as the UK receives little from the EU in the form of agricultural subsidies or structural funds. An official EU document called European Commission Allocated Expenditure 2003 shows that Britain received grants from the EU worth just 0.36 percent of national income, less than any other member.

Anyhow, despite the Telegraph's prediction, the EU budget did not feature prominently in the budget speech today – if at all – in an event that was described by one commentator on the BBC News as "boring". All the same, it is not going to be the end of the issue by any means and one hopes it comes back to bite Blair when he has to deal with the subject when the UK holds the EU presidency in the second half of this year.

A little squall has broken out following the approval yesterday of the EU parliament's budget committee to spend £6 million from the parliament’s contingency fund on an "information campaign" on the EU constitution.

This was picked up by BBC Radio 4's Today programme, which had UKIP MEP Nigel Farage denouncing the allocation as "a monstrous abuse of taxpayers' money". It is not “neutral” he said, as it would be directed at explaining the benefits of the constitution to ordinary people.

Farage was joined by Tory MEP Den Dover, who led the fight against allocating the funds told the BBC that he though giving the money was "unacceptable" and possibly "illegal".

In the absence of Denis MacShane, who refused to come on the programme, it was left to hapless EU parliament official Hosé Liberato to claim that the campaign was not intended to influence the result of any vote in any country.

However, one blog points out that the sum involved represents only one penny for every person in the EU, which is hardly going to make a tremendous difference. It is hard to disagree, not withstanding that I would prefer the money to be in my bank account than spent on such a fatuous enterprise - especially as the council tax bill arrived today.

This notwithstanding, our experience is that the more Europhile MEPs open their mouths about the constitution, the less likely people will be to vote for it. In that context, there is an argument for them being given more money to spread the word.

I suppose though, that if the EU parliament is really genuine about wanting to provide information on the constitution, it could do no better than fund this Blog. Does anyone think we should make an application for a grant?

Well, does he or doesn’t he? Believe in the free market, I mean. Absolutely impossible to tell.

My colleague has already described how Commission President Barroso seemed to give in to the pressure exerted by the big cats, France and Germany, on the subject of the services directive and made mewing noises about the need to ensure that there is no social dumping (free competition to you and me).

It seems, however, that, still speaking to the Lisbon Council, he also explained that actually he was in favour of freeing up the services sector and thought growth and employment were more important for the future welfare of Europe than the protection of the present benefits.

He is, of course, at the same time fighting what will turn out to be an interesting battle to raise the contribution of various countries to the EU budget in order that more EU projects be carried out and, at the very least, more money be transferred from the nominally richer to the nominally poorer countries.

In an eerie reminder of his Marxist past, Barroso told his audience that the fight for the fulfilment of the single market, which is not precisely the same as a free market but comes closer than many of the present arrangements, is not a right-left divide but a dispute between reactionaries and progressives.

Very nice, too, but which side is Señhor Barroso going to be on? Or does this depend on the day of the week or, even, the number of minutes into a speech?

Forgive the pun, but it looks like China's new "anti-succession" law which authorises military force against Taiwan could make the EU think twice about selling new weaponry to the Chinese. This is the view of Condoleezza Rice who is in Asia for talks this week.

"The Europeans... know very well our views on the arms embargo, that this is not a time to end the arms embargo," Rice told reporters en route to India, first stop on her one-week trip. "I would hope it would at least remind the Europeans that there are still serious security issues in this region."

China, however, is insisting that its new law is meant to promote peaceful unification, but Rice was not convinced – as indeed very few others have been. "It's our responsibility", she says, "to say to both the parties that unilateral moves that increase tensions are really not helpful."

Don't you love, incidentally, the diplomatic language - "...really not helpful"? That's one way of putting it, I suppose.

In our third post today on the Jules Muis e-mail which Ambrose Evans-Pritchard featured in this morning’s, Daily Telegraph, we resume our account with a study of the questions put to Muis by the commission and his responses.

These were framed in September last year as evidence for the inquiry into the appointment of Marta Andreasen and provide a fascinating insight into the nature of the commission, its treatment of staff and its accounting systems.

Muis prefaces his first response with a personal view of Andreasen, confirming that his "limited contacts" showed "a highly concerned, focused and determined professional who was asking the right questions and clearly seeing the professional responsibilities and exposures that go with the position of the commission's accountant."

She was, says Muis, seeking to get the weaknesses in the accounting system acknowledged by her managerial and political peers. This, she set as a precondition for accepting responsibility for the immediate financial management functions that went with being the commission's accountant.

Then addressing the first question, where he was asked whether he thought there was any substance to the claim (by Andreasen) that the new financial regulation - and all the implementation measures – would encourage fraud, Muis was more than a little equivocal.

It was up to Andreasen to explain what he meant, but then added:

Reality has it that fragile controls are conducive to error, waste and fraud; and, I would add, fragile controls mask the real exposures for an organisation by reduced discovery risks of fraud and error. Our (accounting) audit reports, and those of the European Audit Court, and to a lesser extent BUDG itself, show a major longstanding compliance gap with standard practice and even with the 'old' Financial Regulation.

The new Financial Regulation does not really change the picture that much unless there is a political and senior managerial will, backed up by adequate resources, to make a break with the past in the substantive spirit of the Reform White Paper.

There is an interesting post on this site on French left-wing misconceptions about the EU constitution. It is worth a read.

That is a direct quote taken from the e-mail on which Ambrose Evans-Pritchard bases his story in the Daily Telegraph this morning.

It is what Jules Muis, the former director-general of the commission's Internal Audit Service, says he was once told in private by a chef de cabinet in the EU commission, illustrating quite how sinister is the culture.

The point Muis makes is in the context of the "whistleblower" Marta Andreasen, the former chief accountant who was sacked by the Prodi commission after she had complained about the inadequacies of the commission’s accounting system, claiming that the EU budget was "an open till waiting to be robbed".

Muis, who was recruited from the World Bank as a trouble-shooter to help clean up the commission accounting system, had "director general" status, which put him at the top of the pecking order in terms of seniority. If he, in such high office, was vulnerable to commission pressure, Andreasen did not stand a chance.

Anyhow, the purpose of the Muis e-mail is to respond to a series of questions put to him by the commission's "Appointment Authority", which is undertaking an investigation into why Andreasen was appointed in the first place – presumably with the intention of ensuring that no similar person is ever again appointed to the commission ranks.

In answering those questions, Muis prefaces his responses with three pages of personal remarks, stating that:

Core to this issue is not only a possibly totally bungled recruitment process - which started it all - but with no apparent accountability by anyone - and with no winners – but also the challenges a first Commission Accountant professional faced, whatever her (and her immediate environment's!) alleged social skills/intelligence, or the lack of it, fully aware and increasingly concerned about the professional risks she ran if matters were not clearly spelled out up front…

...may well have felt comfortable surfing the so-manieth (sic) year of seeing the Accountant's unit Service get away with impunity with financial reporting and controls frameworks which were in substantial non compliance with the Financial Regulation prevailing.

The Appointment Authority will be well aware that once the Commission has branded a staff member as non functional, few will step forward to counter that claim. I am surprised as a matter of fact there are not fifty witnesses stepping forward in the same vein as quoted. This is after all an organisation that, anachronistically, can sanction people for not speaking well about the Commission.

Ambrose Evans-Pritchard has come up with a blinder in this morning’s Daily Telegraph, with a piece in the business section that should have been on the front page.

Under the heading, "EC's 'sordid accounting' damned in email from top auditor", Ambrose reports that the EU commission has a "chronically sordid" accounting system and is still unable to keep track of the EU's £73 billion budget after a decade of financial scandals.

This is according to "a top EU insider", the former director-general of the commission's Internal Audit Service, Jules Muis, who retired last year after attempting to spearhead the EU's reform drive.

In an internal e-mail, he paints "an ugly picture of an autocratic body with an 'incestuous esprit de corps' that uses its bureaucratic muscle to 'trash' any official who dares to question its methods."

Ambrose's full story can be read on the web from the link above. In the meantime, we have obtained a full copy of the e-mail, which runs to 11 pages of A4. We will be posting long extracts shortly, with a full analysis.

Incidentally, please bear with us. Blogger is undergoing severe technical problems which is making posting very difficult, on top of which I am having great difficulty accessing the internet.

You say potato, and I say potato… It doesn't work in print, but everybody knows the song. Nevertheless, when you try it the commission way, it does work – with a vengeance: you say competition, I say social dumping. And it cannot be allowed.

So says José Manuel Barroso, who yesterday told a "free-market think tank" that "pro-business plans" to deregulate the EU's fragmented services sector must avoid undermining Europe's cherished welfare state. "Appropriate guarantees" were needed to accompany service sector reform to guarantee the survival of social rights.

What is exercising the tiny mind of Barroso is that such proposals could lead to companies from nations with lower taxes and fewer regulations guaranteeing workers' rights undercutting those with higher levels of social legislation.

Such "social dumping", says Barroso, would occur when companies from eastern Europe could enter a market where social benefits are more expensive, while continuing to offer their workers benefits at the level of the home country.

Thus, while the man is "committed" to what he claims is deregulation, it seems that he will be borrowing from St Augustine: "Lord give me deregulation, but not just yet." We wonder if he knows the end of the song?

There was an agreement during President Bush’s visit to Europe that the vexed question of lifting the arms embargo on China should not be raised. It was all going to be sweetness and light; there was no real need for fractious disagreements.

The subject, however, will not go away. At the moment it looks like the actual decision to lift the embargo will be taken during the British presidency, which must be one of Tony Blair’s nightmares: there he will be squirming between America and Europe. Far from building bridges, he will be in the unenviable position of deepening the chasm.

In fact, this week Lord Bach the defence procurement minister is going to Washington to try to minimize whatever impact the lifting of the arms embargo may have on American attitudes to all their European allies, including Britain.

Meanwhile, France is anxious to show America that it means well …. errm …. that it does not mean too badly … well, anyhow, that it only wants to earn large sums of money and that should not bother anybody at all … oh no, just a minute … it wants to build up a European foreign policy that will stand up to America … zut alors! What do we mean, enfin?

Last week it was the French Defence Minister Michèle Alliot-Marie went to Washington, as the International Herald Tribune put it:

“….hoping to capitalize on improving trans-Atlantic relations and win some measure of support for the European Union’s plan to lift its arms embargo against China”.

“… the elites in France, Germany, Spain or Belgium who brashly speak for the whole of Europe”.

“The embargo prohibits arms sales to China except through special export licenses. According to the European Union, French export licenses to China were valued in 2003 at €171 million, or about $228 million - the most of any member state, and up from €105 million in 2002.”

“… Jiang Enshu, a spokesman for the Chinese Parliament, said his country intended to increase officially declared military spending by 12.6 percent this year to $29.9 billion, or €20 billion.”

“That isn’t at all reasonable, nor constructive for US-European relations. Such threats send an extremely negative signal.”

Of course, there are some things which the French do extremely well. One, not entirely confined to their political classes, is to squabble interminably and another, of more general utility, is to demonstrate.

The first talent was well illustrated this morning by a long piece in The Independent, which was the only "quality" mainstream newspaper to carry a substantive EU story today.

Headed: "French vote on EU threatens to tear apart Socialist party", Paris correspondent John Lichfield retails how the Socialists risks tearing themselves apart over the EU referendum. "The mood within the party is terrible, dramatic, the worst I've known in 20 years as a Socialist," a former minister and leading member of the party tells Lichfield.

Despite the internal referendum last December, when members returned a pro-constitution majority, the party's left wing and several senior leaders have refused to abide by the result. Leader of the Socialist "yes" camp, François Hollande, was booed and pelted with snowballs by anti-EU treaty Socialists and members of more extreme left-wing parties at a rally in France last week.

Former party secretary general, Henri Emmanuelli, is now saying that a Socialist vote for the constitution would be a repeat of earlier "mistakes" such as Socialist politicians' support for the collaborationist Marshal Pétain in 1940.

Akin to spitting in church, his remark drew furious denunciations from Hollande and other party leaders, forcing Emmanuelli to apologise – but the deed had been done, signalling the eruption of open warfare within the Parti Socialiste

More immediately, says The Independent, this threatens the bi-partisan centre-right and centre-left campaign for a "yes" vote in the referendum, due on 29 May.

And although polls still show a 60-40 split in favour of the constitution, pro-EU politicians of right and left fear that high unemployment, a widespread sense of political and economic malaise, the split in the Socialists and the extreme unpopularity of the centre-right government of Jean-Pierre Raffarin could yet sink the "yes" vote.

That was the Independent "take" on the situation, but others has already had their say. Yesterday, it was the Sunday Herald having a go, with the headline: "Chirac told: halt France's decline or forget the EU".

This paper reported on Tuesday's "mammoth demonstrations" across France which had "brought out the usual cavalcades": Greying veterans of May 1968, legions of railwaymen, teachers and their students, union apparatchiks, civil servants of every grade, journalists, air-traffic controllers and museum staff: all marching beneath a colourful display of banners and balloons and to an ear- splitting din of firecrackers and foghorns.

Le manif, said the Herald, is a ritual in France, and the ritual of the day after – apart from clearing up the tons of debris – is assessing the numbers that took part and deciding whether or not the campaign has been a success. Assessments by tradition vary ludicrously. This time the unions said 150,000 people took part in the Paris protest; for the police it was 35,000.

Not that it mattered. By Friday morning the consensus had settled: the mass movement had exceeded the unions’ hopes. More than one million workers – including many, unusually, in the private sector – had downed tools. The government of President Jacques Chirac, commentators agreed, should be seriously rattled – and not just because the demonstrations took place at the same time the Olympic assessors were in town.

But for Chirac, and his long-suffering prime minister, Jean-Pierre Raffarin, the banners that counted were elsewhere. They were proudly arrayed along a substantial section of the cortege – and though their message flew in the face of the official policy of the opposition socialists and most trade unions, nobody on the march seemed to mind. The words were: "Non à la constitution Européenne!"

The Sunday Times took up the story, showing a photograph of some of the banners – these read: "Pour moi, c’est NON". One banner had the additional words, "Une autre Europe est possible!", but on the others, it looked as if that slogan had been hacked off.

Under its headline, proclaiming: "Chirac tries to buy off the 'non' vote", The Times told us that Chirac had adopted the standard French reflex to the unrest: he had reached for the chequebook, undertaking to pay his bloated ranks of state employees and extra one percent salary increase.

But it was to Reuters that we had to turn to find out why Chirac had taken this action.

Apparently, a survey for the L'Express weekly news magazine had reported opposition to the constitution rising to 44 percent from 37 percent since January and, crucially, the "no" vote had most support among public sector staff, at 57 percent.

Pollster Jerome Sainte-Marie said "The more people vote on the merits of the treaty, and that alone, the more people vote 'yes'. Conversely, any link with the government's policies benefits the 'no' campaign". Hence the money flows to them who shout loudest.

But the last word, however, should go to Valery Giscard d'Estaing, father of the constitution. While his compatriots were out on the streets demonstrating, he was in Pennsylvania, telling 300 people at the National Constitution Center that he believed all 25 member states would ratify the constitution. "The builders of modern Europe are not building a nation. They are building a continent," he said.

So now we know.

Just so they don’t feel left out while we are being delightfully non-communautaire about our wonderful neighbours in our previous post, we thought we would add a kind word or two about our revered Belgian partners – or, at least, their prime minister, Guy Verhofstadt.

In an interview for Euractiv about a paper he has just written for the EU commission telling Barroso how to do his job, the creepy Verhofstadt is also asked what he would propose to his "colleagues" if the EU constitution was not ratified by all member states.

His reply is a classic of its kind, proving that – is if we did not know already – Mr Verhofstadt is not a democrat. "It is too early to say," he replies, adding:

We should all hope for the ratification by the 25. I do not think that it is productive today to start a discussion about what could happen afterwards, as this will create arguments for Eurosceptics who do not want to see the Constitution go through. I am a European in favour of a more integrated union so I do not want to give arguments to those against further integration.

Being rude about the French is one of the perks of running this Blog but, for once – and doubtless not the last time – we have been totally upstaged by an editorial in the Taipei Times, the writer of which seems slightly less than enamoured by our Gallic partners.

Headed, "French perfidy must be challenged", the framing of the piece is France's pressure on the rest of the EU into lifting the arms embargo on China.

It invites readers to remember that Christine Deviers-Joncour - the erstwhile mistress of former French foreign minister Roland Dumas whose tell-all books played a serious role in clarifying details of the scandal surrounding the kickbacks involved in Taiwan's purchase of Lafayette frigates in the early 1990s - once wrote a book about herself called The Whore of the Republic.

Says the Taipei Times, "the former lingerie model's right to this title is now under severe challenge from France's defence minister Michele Alliot-Marie, who last week said - and you should probably reach for your sick bags now - 'France has the strictest, most stringent rules applying to the sale of weapons of the European Union and probably in the world.'"

Its response to that is delightfully robust, citing the American writer Fran Lebowitz, who once said: "To the French, lying is simply talking."

The editorial continues, and we cannot improve upon it:

In Taiwan, we know about French arms sales - principally how they are manipulated so that everyone in on the deal can pocket huge wads of cash at the taxpayers' expense. According to Dumas himself, the sum involved in the Lafayette case was US$500 million with People First Party Chairman James Soong's then office, the Chinese Nationalist Party's (KMT) secretariat general, acting as bagman. What could Alliot-Marie's "strict rules" be? Perhaps she means a strict scale of bribes.

The English poet Coleridge, of Ancient Mariner fame, once said that "Frenchmen are like grains of gunpowder, - each by itself smutty and contemptible, but mass them together and they are terrible indeed."

How well the arms embargo case illustrates this. The desire to sell arms to a tyranny like China is smutty and contemptible indeed. But when those who have influence can persuade the government to do their bidding, the result may quite possibly be terrible - France conniving at the destruction of a liberal democracy simply to enrich its "merchants of death" and their politician friends.

President Chen Shui-bian broached the issue twice on Thursday, and it is a shame that he was not a little stronger in his condemnation of lifting the EU arms ban. The plain truth is that for purely commercial motives, France is prepared to collude with the Chinese dictatorship in the stamping out of Taiwan's liberties. It is an ugly and shameful state of affairs and this ugliness and shame must be brought home with far stronger language than Chen has so far used.

Deeds, as well as words, should also be considered. The arms ban is EU-wide, but the pressure to lift it is almost entirely driven by France, with a little help from the Germans. Taiwan should let it be known that should the ban be lifted it will immediately act against French interests in Taiwan and will subsequently do the same thing with any other EU country that sell weapons to China.

What sort of actions should be taken? The immediate cessation of visa-free privileges and an astronomical raising of visa fees, the closing of cultural institutions, the ending of scholarships for French students, refusal to grant or renew French nationals alien residency, refusal to accept documents authenticated by the French government, the severing of air agreements - most of these measures are quite feasible and were used against South Korea in the early 1990s.

But Taiwan should go further and impose a massive tariff, say 100 percent, on all goods made by French companies; the proceeds, such as they might be, should go to the defense budget. That this violates WTO protocols bothers us as much as the UN bothers US Defense Secretary Donald Rumsfeld. That the French might retaliate makes us laugh. Let them double the price they pay for information technology if they want; much of it simply cannot be sourced elsewhere. Taiwan, however, will survive more expensive Louis Vuitton bags.

As the general election comes closer, candidates from all parties are going through the ritual of writing the texts for their own personal electoral addresses, nervously wondering which combination of words to use, and which particular set of issues that they should pick, in the hope that what they write might just make the difference.

What we would have expected, though, is that "Europe" would feature relatively low down on most prospective MPs horizons. Although the issue will be there – that great elephant in the room – we did not anticipate that it would be an issue which would guide most electors to cast their votes.

It was something of a surprise, therefore, to read in The Sunday Telegraph yesterday that up to thirty Conservatives candidates in hotly-contested seats were making pre-election pledged to withdraw from the EU if the Conservatives form the next government

According to the Telegraph, this is being done with tacit agreement from the party leadership, which is allowing the use of carefully crafted words such as a pledge to campaign for "an independent Britain" – the code phrase for EU withdrawal.

Unnamed "senior Tory officials", says the Telegraph, have "revealed" that Michael Howard has signalled to candidates that he is content for them to unleash the full extent of their anti-European passion during the forthcoming election campaign.

That one of the candidates taking this line is Douglas Carswell, the Tory candidate for Harwich in Essex, is not surprising though. Harwich, held by Labour with a 2,596 majority, is a key Tory target. But, in 1997 it saw the largest vote in the country for the Referendum Party at 4,923 or nearly 10 per cent of the vote. Now, UKIP is stepping up the pressure this time by fielding the MEP Jeffrey Titford.

Therein lies an intriguing part of the story, not picked up by the Telegraph. Through all the travails of UKIP, and its running fight with Robert Kilroy Silk, culminating in him forming his own party, Veritas, the Eastern Region, for which Titford is MEP, has been a haven of tranquillity. Under his quiet, undemonstrative leadership, none of the UKIP branches have broken away to join Veritas and their machinery remains in place, quietly building a following.

In that respect, UKIP is doing its job, quietly pushing the Tory party into a more Eurosceptic stance, creating that essential divide in British politics where the EU ceases to be a "consensus" issue amongst the political élites and starts becoming a matter for party political debate. From the look of it, therefore, “Europe” may stay on the agenda during the general election campaign. It is neither dead nor buried.

We hear from our colleagues in the Netherlands, where a Vote-No campaign is being co-ordinated, even as I write, that the latest polls show something very interesting.

32 per cent are against the European constitution, 35 per cent in favour and 33 per cent undecided. 53 per cent say that they have no idea what is in the constitution and 42 per cent say they know a little. That leaves 5 per cent who must think they know a good deal, though it is not clear whether they are for or against it.

When we add that to the general dissatisfaction with the political elite in the Netherlands, the collapse of many of the cherished illusions about Dutch life after the brutal murder of film-maker Theo van Gogh, the resentment of the larger member states of the EU and the fear of further enlargement, we find a somewhat volatile situation, as this blog has noted before.

Concluding our commentary on the Booker column – only three stories again a week – Booker picks up on our report of the European Sub-committee A debate last Tuesday on the EU quota allocations for member state fishing fleets.

Yet again, writes Booker, the House of Commons provided a startling picture of what is meant in practice by "scrutiny", explaining – for those who are less aware than our readers – that this is the process whereby MPs are meant to have the chance to examine EU legislation in advance, so that ministers can then go off to discuss it in Brussels with the full authority of Parliament.

As we reported, the handful of MPs attending the committee had been presented only hours before with 900 pages of documents, on which they were graciously permitted to question our fisheries minister Ben Bradshaw before voting.

Booker reports that Bradshaw seemed to have some difficulty in answering the questions put to him. But his Labour colleagues remained silent, until they could dutifully give this mountain of unread paper their approval. Probably few even realised that the regulations under discussion were approved in Brussels last December and have already been law for three months. Whatever Parliament thought about them, Booker concludes, was thus wholly irrelevant.

What is particularly unwholesome these proceedings, though, is the stance taken by our government, which has taken to using the committees as a means of endorsing its own policies, by tabling composite motions which asked the members to “take note” of the EU legislation and approve government action in respect of the issues covered by the law.

This debate was no different but what made this tactic especially disgusting was that the EU regulations covered not only the usual fishing controls but also provision for "certain deep sea stocks", then asking for support of "the Government's objective of achieving the conservation and sustainable exploitation of fishing resources in line with the precautionary principle while preserving a viable degree of activity for the industry."

Unbeknown to MPs, however, a group of fisheries researchers, funded by Norway, Ireland and the UK, had carried out a study of the deep water fisheries to the west of Ireland and Scotland, and a sorry tale they had to tell.

Entitled: "A preliminary Investigation on Shelf Edge and Deepwater Fixed Net Fisheries to the West and North of Great Britain, Ireland, around Rockall and Hatton Bank", this report is now on the internet , complete with gruesome photographs, one of which appeared on the front page of this week's Fishing News, which broke the story of the findings.

Headed: "Monks slaughter in deepwater fishery", FN conveyed the thrust of the report which retailed how up to 50 – mainly Spanish – flag vessels were working huge fleets of gill nets, doing enormous damage to stocks of monkfish and deepwater sharks in the continental shelf waters.

An average of 65 percent of monkfish were discarded from up to 5000 miles of nets being worked at any one time, with up to 150 miles of netting left unattended for up to ten days, leaving the fish caught to rot in the mesh. Furthermore, up to 20 miles of net per vessel per trip was routinely discarded, nets which continued fishing in a manner aptly known as "ghost fishing".

Some of the nets used were of the illegal monofilament type and among the more unsavoury habits of 15-16 Spanish trawlers landing into Milford on a regular basis was the practice of steaming up from Spain and shooting their nets en route before entering a UK port to make "compliance visits". Once certified as being "legal", they then steamed out again to retrieve their nets, returning to Spain to land their catch – where, of course, there would be no inspection by the Spanish authorities.

The researchers concluded in their report that it was evident that "there is little or no management of these fisheries and existing control and enforcement regulations have little or no impact. Essentially these fisheries remain totally unrestricted."

But, while MPs during their debate had no knowledge of this report, it can hardly be the case that the fisheries minister – or his department – was unaware of it. Yet Bradshaw still asked the committee to support the "Government’s objective of achieving the conservation and sustainable exploitation of fishing resources in line with the precautionary principle while preserving a viable degree of activity for the industry."

For rank hypocrisy, this is very hard to beat.

"And for all of those that say, if you look at the last thirty years, we have lost power to Brussels, actually it isn't true. In the last, certainly in the last eight years, as we, the Labour government, have been more involved in Europe, so we have become more powerful and more prosperous, better able, literally to implement a patriotic case for the European Union."

Jack Straw
Foreign Secretary
BBC Today Programme, 9 February 2005

According to the Sunday Times business section the government is struggling to convince our masters in Brussels, the EU commission, that it has not provided billions of pounds in illegal state aid to BT.

The report says that the commission last week published a letter, sent to foreign secretary Jack Straw, that sets out the grounds for an ongoing investigation into the government's allegedly favourable treatment of BT. It is claimed that BT pays only a fraction of the business rates it ought to pay on its telecoms network. Some estimates put the saving at more than £1 billion a year.

Neelie "Board Lady" Kroes, the EU's competition commissioner, is cited as having rejected Britain’s justification for its assessment of BT's rateable value. We are told she has asked for more detailed information to enable the commission to calculate the precise amount of aid received by BT and by Kingston Communications, which operates the telephone system in Hull.

The Sunday Times points out that this dispute is a potential embarrassment for the government – something of an understatement. It embraces the Department of Trade and Industry, the Inland Revenue's Valuation Office Agency (VOA), and the Office of the Deputy Prime Minister (ODPM), among others.

The complaints stem from the rateable value of BT's network assets, set at £493m after a long battle between the company and the VOA in the late 1990s. Rivals complain they are assessed for rates on a much less favourable basis.

Vtesse Networks, the small company that has brought the complaint, pays rates equal to 7-10 percent of its turnover. According to the commission, BT's rates bill has been as little as 2 percent of its turnover.

The British authorities have sought to justify BT's treatment by reference to its size, the integrity of its network and its universal service obligations. The commission rejected all these. Kroes is quoted as saying: "This statement appears incompatible with the commission’s position in previous fiscal aid cases stipulating that nothing justified preferential treatment in favour of large companies."

BT said allegations of state aid were groundless because it had received no benefits from the government. "BT is confident that the UK government will demonstrate the fairness of the UK rating system."

Aidan Paul, chief executive of Vtesse, said the rateable value of each of BT's 28m local lines was about £9 - compared with about £100 for any lines "unbundled" and taken over by its competitors. "There could have been a £12 billion under-payment since 1995," he said.

If this case goes the full course, the government could find itself being forced to charge BT that extra £12 billion – or whatever sum the commission decides upon - wrecking any further plans for developing the telecommunications business, and imposing significant costs on consumers – who will have to pay the bill.

Yet again, it is good to see how much more powerful we have become since the Labour government became more involved in Europe.

Courtesy of The Business, we learn that there is a two-thirds chance that the EU constitution will fail to be ratified in all 25 EU member states.

This is according to a report from "leading investment bank" Morgan Stanley, whose Eric Chaney says: "At this stage, it is reasonable to assume that the constitution will not pass at least one of the referendums." And, even if the French vote "yes" in two months, the odds on full ratification remain less than 50 percent according to Chaney's probability analysis.

Got to be worth a bet.

In Booker’s second story in his column this week, he takes apart Nick Witney. This is the man who, as readers will recall, is the CEO of the European Defence Agency, a man who was rash enough to send a letter to the Sunday Telegraph last week, arguing with Booker's piece headed: "The rule of Brussels controls our arms", which was published in the Telegraph on 20 February.

Witney has denied Booker's claim that he is playing a key role in building up an "EU defence identity" separate from both Nato and the US, a denial that we comprehensively debunked on this Blog last week.

What is particularly disingenuous, Booker adds, is Witney's own claim in his letter that he is only concerned with co-ordinating defence procurement. Nowadays, it is precisely the nature of the armed forces' electronics and weapons systems that dictates who they can fight alongside.

At the centre of EU defence planning is the Future Rapid Effects System (FRES) which will create a family of vehicles and weapons systems co-ordinated through the EU's Galileo satellite programme. If the British Army is reorganised around FRES, as Mr Witney's former employer, the MoD wants, it will be equipped to fight alongside other EU forces, but not alongside the Americans.

FRES is a subject characterised by an almost total absence of debate. Booker is one of the very few journalists in the British media to write about it and, although defence hardware is not a riveting subject for everyone, it is important.

As well as having significant political implications, FRES is - as we have remarked in a previous posting, very expensive. The government is preparing to sink around £6 billion into buying the 900 vehicles comprising the FRES system, with an estimated budget for the total costs of ownership over the expected 30-year service life of almost £50 billion. That is a staggering £6.7 million average cost to buy each vehicle and an unbelievable life-time cost per vehicle – yes, each vehicle - of £55.5 million.

By coincidence, however, FRES also features in this week's The Business, in a story headed: "Tank deal manoeuvres BAE into pole position in US". The story largely concerns the recent purchase by BSE Systems of the US armoured vehicle manufacturer, United Defense Industries, which we reported on 8 March.

And while The Business is to be congratulated on running the story, it is clear from its content that its journalist, Tracey Boles, does not understand its implications.

She leads her report with the comment that "tanks are big business", noting that, "In the UK, an upcoming requirement for medium-sized armoured vehicles under a military programme called FRES will be worth at least £3bn." In America, she adds, "the sums being spent are higher: Washington is to invest $100bn in its land-based Future Combat Systems (FCS), its vision of an interlinked battlefield on which tanks are key."

It is with this in mind, Boles writes, that BAE Systems, Britain's largest defence contractor, last week agreed the $4.1bn cash takeover of United Defense Industries

She goes on to state that the proposed purchase killed two birds with one stone for BAE - it is in pole position to win work on the lucrative contracts and it may have achieved its longed-for aim of cracking America's defence market. Its relentless march is now well advanced. Once UDI is integrated, BAE could become the sixth largest US defence company and will be a prime contractor there. Previously it was a systems integrator rather than a platform builder.

Where Boles goes wrong is on two counts. Firstly, like many others, including the Conservative defence spokesman, Nicholas Soames, she makes the mistake of positioning FRES primarily as an armoured vehicle project. It is not. The project involves developing a fully integrated electronic system of intelligence gathering, communications, targeting and weapons delivery, and logistics, of which the armoured vehicles are but one – and the least expensive – component.

As with modern military combat aircraft, where the electronics amount to 60 percent or more of the total cost of each unit, so it is about to become with modern ground equipment. It is no surprise, therefore, that the prime contractor for the Future Combat System in the US is not a "platform builder" but the aerospace firm Boeing.

The second mistake is in assuming that, because BAE has bought into a US firm that will be involved in FCS, that necessarily puts it in a "pole position" to participate in the MoD FRES project. In fact, the two systems may be mutually incompatible, both on a technical and – more importantly – a political level.

This, Tracey Boles, now writing as "transport editor" could have picked up from her own story, also in this week's edition of the paper, headed: "Minister to placate US over EU move to lift China ban."

Here, Boles reports that the UK’s defence procurement minister Lord Bach is, this week, to attempt to limit the expected backlash from the United States if, as predicted, the EU lifts its embargo on arms sales to China.

She goes on to add that ministers are anxious that protectionist elements are gaining momentum in America, and that removing barriers to arms sales to China will trigger a backlash from the US. US government officials and Congress have said they will retaliate immediately against European companies if the ban is scrapped while their own stays in place. This could mean sanctions.

The key passage, though, comes next, where she writes:

The threat has seen British manufacturers voice their willingness to stick to the US restrictions. BAE Systems does not want to jeopardise its lucrative US position, which has taken years to build up, by pursuing military sales in China. British support for lifting the embargo could undermine UK efforts to obtain a longed-for waiver from US International Traffic in Arms Regulations (ITAR). Such a waiver is seen as a first step to lowering defence technology hurdles between the two countries…

Responding to Margot Wallström's recent intervention in the Irish referendum campaign, Anthony Coughlan, Secretary of the National Platform EU Research and Information Centre, Dublin, has written to Pat Kenny of Radio Telefis Eireann in Dublin, who interviewed the fragrant Margot when she was in Ireland.

In his letter, Coughlan observes that Wallström spoke about contributing to the Irish debate on the proposed EU Constitution and the role that she and her fellow commissioners were anxious to play in providing "objective" information on the constitution.

In the lead-in to one of his questions, Kenny implied to his listeners that Britain was really the only EU country where people were so innately "euro-sceptical" that they would reject the Constitution.

As he listened, Coughlan confides to Kenny, "I said to myself it was a pity that you did not ask Commissioner Wallström why they are not holding a referendum in her own country, Sweden."

"The reason is of course that if Sweden did have a referendum," he continues, "its citizens would almost certainly vote 'no', just as they decisively rejected the proposal to abolish their national currency and replace it with the euro in
September 2003."

The mainstream political parties there do not want a repeat of that experience, even though there is considerable popular demand that Swedes should have a say on a Constitution which would have the effect, inter alia, of abolishing the existing European Union and Community and replacing them with quite a new European Union in the constitutional form of an EU Federation.

It is effectively ruled by violent gangs of Muslim immigrants. Some of the Muslims have lived in the area of Rosengård, Malmö, for twenty years, and still don't know how to read or write Swedish. Ambulance personnel are attacked by stones or weapons, and refuse to help anybody in the area without police escort. The immigrants also spit at them when they come to help. Recently, an Albanian youth was stabbed by an Arab, and was left bleeding to death on the ground while the ambulance waited for the police to arrive. The police themselves hesitate to enter parts of their own city unless they have several patrols, and need to have guards to watch their cars, otherwise they will be vandalised. "Something drastic has to be done, or much more blood will be spilled" says one of the locals.

This week, Booker returns to the bizarre story of Per Lindstrand, the world-famous Swedish balloonist whose firm based since 1978 in Oswestry, Shropshire was the world's leading manufacturer of HiFlyer "aerostats". These are tethered helium balloons that cost £500,000 each and can carry 30 passengers up to 500 ft.

That is one of the strengths of the Booker column – that we can keep coming back to the same issue, watching it develop over time and – sometimes – bringing it to a successful conclusion.

We first looked at this issue on 21 September 2003 in the column when Booker reported that as of the following week, Lindstrand’s company would be unable to sell its most successful product anywhere in the EU.

This, Booker wrote, would give its only competitor, a Franco-German firm called Aerophile, a monopoly in Europe, forcing Mr Lindstrand to lay off up to 60 per cent of his 90-strong workforce and perhaps even shut down.

Over those last 18 months, the firm has indeed lost millions of pounds, a nightmare that started on 28 September when the new European Aviation Safety Agency (Easa) took over from national agencies the responsibility for all aviation safety regulation in the EU.

Under EU aircraft certification rules which came in to force at the same time, all aerostats had to be certified as "aircraft", bringing to light an extraordinary anomaly.

Previously, under UK law, the Civil Aviation Agency could only certify Mr Lindstrand's balloons as aircraft while they were free-flying, but when the same balloons were tethered they had be licensed by the Health and Safety Executive as "amusements" or "fairground rides".

By contrast, under Franco-German law, Aerophile's vehicles were certified as aircraft whether free-flying or tethered and, when Easa took over, they retained “grandfather rights” and could continue in operation.

Because Linstrand's tethered balloons had not previously been certified as aircraft, however, the manufacturing company had to make a new application to Easa – and therein lay the makings of the drama that was to follow. Easa had not devised its own set of standards, so Lindstrand was in a position of having to apply for a certification which did not exist.

What made this indefensible was that CAA officials had been aware of the legal discrepancy for four years, since Mr Lindstrand had had problems selling his HiFlyers in Germany. Yet they had never raised with Easa officials the question of what Mr Lindstrand then called "the worst injustice I have ever encountered in my 27 years as a lighter-than-air manufacturer".

And it was to get worse.

In a last-minute bid to avert a crisis, Lindstrand's MP, Owen Paterson, tabled 33 parliamentary questions to transport minister Kim Howell. But the only response from the CAA was a letter from its chairman, Sir Roy McNulty, who had wrote a chillingly bland letter to Mr Lindstrand, admitting that "as from September 28 you will no longer be able to market your aerostat".

However, McNulty did assure Lindstrand that, when the Easa dis gets round to producing its own standards, it would be easier for him to sell throughout the EU.

Booker revisited the story on 28 September of 2003, by which time he had asked the head of Easa in Brussels why Lindstrand's aerostats could not be certified as "aircraft". He had received a ludicrously patronising reply from Nick de Souza at the London press office which showed no grasp of the problem whatever. The commission clearly did not understand its own legislation.

All Lindstrand’s MP, Owen Paterson, had been able to get out of the minister was an “expression of hope” that EU certification might be ready "early in 2004".

By October, Booker was back on the case with news that Lindstrand had still been unable to gain certification for his "aerostat" balloons and, worse still, while he was unable to sell his products, his rival, Aerophile, had managed to steal a march on him and sell its product as a tourist attraction in Bristol.

Managing the certification process on behalf of Easa had been the CAA, and – after endless delays in producing a certification standard, the problem became the endless obstacles put in the way of Lindstrand’s machines, the latest then being the certification of the massive winch used to tether the balloons, made to the highest safety specifications by a Huddersfield firm.

Under EU rules, this could only be certified as safe by an "expert body", and Lindstrand’s winch was accordingly licensed by the HSE under fairground safety rules.

But the CAA was refusing to recognise the HSE as an "expert body". Instead, it was insisting on carrying out its own technical safety studies from scratch, a task for which it is unqualified, as it had no experience in this field.

At the time, though Lindstrand was stuck with the CAA. There was no way of contacting Easa directly as on its website was posted this message:

As all our ressources (sic) are presently working on on-going certification programmes, the Certification Team is currently unable to respond to all the information requests received on the general e-mail address linked to certification issues. It is hoped that this situation will soon be rectified and this general e-mail address for certification related information requests will be operational again on the web as soon as possible. Please check our web site regulary (sic) for further information.

Following his rant about bloggers yesterday, Simon Jenkins might want to eat his words.

Extolling the virtues of the mainstream media (MSM), we have to prove, he said, that such qualities as newsgathering and reliability are worth more than the "scream of opinion".

And so, turning to this fabled reliable newsgathering, we read of the situation in Portugal, where recently elected socialist prime minister Jose Socrates took office today.

From Associated Press, we read that Socrates has indicated that a referendum on the EU constitution might be held at the same time as local elections scheduled for next October.

Then, from Agence France Presse, we find that the government has said that it would go ahead with promised referendums on the new EU constitution and the nation's strict abortion laws only in 2006 because the country is already facing local and presidential elections over the next year.

This agency cites vice-president of the party's parliamentary group, Guilherme d'Oliveira Martins, saying: "It is too soon to set dates, we have a very tight calendar in the first half of the legislature, we will have municipal elections and then presidential elections."

But, from the much-respected Reuters, we find that the "Socialist leader" has said he would seek to hold a referendum on the EU constitution in December this year.

So there we have it, dear reader. From information so expensively gathered by the MSM, we can reliably inform you that the EU referendum in Portugal will be held in October, December and 2006.

Are we permitted a wry smile?

"And for all of those that say, if you look at the last thirty years, we have lost power to Brussels, actually it isn't true. In the last, certainly in the last eight years, as we, the Labour government, have been more involved in Europe, so we have become more powerful and more prosperous, better able, literally to implement a patriotic case for the European Union."

Jack Straw
Foreign Secretary
BBC Today Programme, 9 February 2005

It flared up in early February when the government suddenly decided that it had got its sums wrong on the EU's emission trading scheme, and wanted our masters in Brussels to accept revised limits that would not be quite so damaging to British industry.

Unlikely as it looked, Britain seemed to be taking a robust line, with talk of challenging the EU commission in the European Court of Justice.

And so it has turned out to be, but not before the government has been forced into "a humiliating climbdown" – and that is the Europhile Independent talking.

None other than the environment secretary herself, the odious caravanner Margaret Beckett, announced yesterday that the UK would proceed on the basis of the lower carbon allowance that ministers had originally submitted, caving in to the commission after it had refused to permit an increase in the allocation.

And this is the lady who, back in July told an invited audience of environmental campaigners that voting "no" in the EU referendum would put the UK's and the EU's environmental achievements at risk.

Says The Independent, Beckett's current move represents a victory for Brussels, after the heavy-handed tactics used by her to force it to agree to more generous carbon allowances. However, the paper adds, commission officials sought to play down its pleasure at the government's U-turn for fear of appearing triumphalist.

The UK is still taking the commission to court in an effort to get the higher carbon allocation reinstated, but this is widely regarded as a "fig leaf" designed to protect the government from attacks by the CBI before the general election.

Like Dawn Primarolo, recently confronted with the ECJ's VAT decision on car milegae expenses this week, all that is now left for the EUnuchs to do is wring their hands, wail and express their "disappointment" at events, which is indeed what Defra is doing.

Yet again, it is good to see how much more powerful we have become since the Labour government became more involved in Europe.

The fragrant Margot, EU commissioner for truth and reconciliation, was in Dublin yesterday, making a case for the EU constitution in a debate at the National Forum on Europe.

There, Mrs Wallström is said to have claimed that the commission would not issue propaganda about the constitution during the referendum campaign in Ireland, due to take place later this year.

But, if the report by Arthur Beesley in the Irish Times (subscription only) is correct, not only is Wallström already issuing "propaganda", she also appears to be lying through her teeth.

Under a headline "Treaty 'will not clear way for EU army'", Beesley tells us that Wallström "has rejected claims that the EU constitutional treaty will clear the way for the creation of a European army", and also has "rejected concerns that the constitution would compromise Ireland's neutrality."

Beesley then quotes Wallström directly as saying: "Let me stress that the constitutional treaty does not create a European army, as some would have us believe. Defence will remain a matter of national sovereignty."

Technically, of course, Wallström is entirely correct about the creation of a European army. This is happening outwith the constitution and, as we have chronicled on the Blog, is proceeding apace.

But, on the issue of Irish neutrality, and the claim that: "Defence will remain a matter of national sovereignty", she is being wholly misleading, viz Article I-41 7, which states:

If a Member State is the victim of armed aggression on its territory, the other Member States shall have towards it and obligation of aid and assistance by all means in their power…

"There is no alternative to the CAP. The market and renationalising aspects of the policy are simply not options, but at the same time I think we must link the CAP to the European Union's overall objectives, especially sustainable development. I don't want to see the CAP on the sidelines".

This is Mariann Fischer Boel, the farmer's wife who just happens also to be the EU's agriculture commissioner, speaking in an interview to the Farmers Guardian, published today.

Yet, earlier this week saw the publication of a report by the House of Lords European Union Committee, entitled "Future financing of the European Union" (now available online) which, according to press reports, recommended the abolition of the CAP, arguing:

The continued predominance of the Common Agricultural Policy (CAP) in the budget has been inappropriate for a long time, and is even more inappropriate now that the link between agricultural support and production has been broken, following recent reforms. The new system of direct income support transfers strengthens the argument for shifting the burden of financing the CAP back towards the Member States.

I am fairly confident that the whole thing will collapse under the burden of bureaucracy and lawsuits. Consultants and lawyers will do well. A few farmers will begin to question their sanity, and Defra officials will need bodyguards on the rare occasions when they venture into the countryside. It is enough to make you pack up and emigrate; which is exactly what one of our largest, and in many ways one of the best, co-op members has done. He is now living a form free life growing cotton in Australia and loving it.

As the report of the Commission for Africa hits the weary populace, with all its demands of doubling aid, rescheduling debts and, oh yes, requests for improved governance in African countries run largely by bloodthirsty kleptocracies to the great detriment of all the people, organizations that should rejoice and benefit, the NGOs, are beginning to shiver in the cold wind of reality.

It seems that donors no longer accept unequivocally their self-defined image as the world’s true benefactors and regulators. It seems that some ill-intentioned people are beginning to grumble about the fact that, although these organizations handle many millions of dollars, they seem to be completely unaccountable to anyone except themselves.

It seems that donors have noticed repeated clashes of interest in the activity of certain directors; the spending of large sums on advertising and salaries; consistent misrepresentation of the truth of certain situations to produce shock-advertisements in order to get more money (well, they are true in essence, wail the NGOs, whatever that may mean).

The US Congress is turning its attention to the NGOs (or international charities as they are sometimes known) and their finances.

Senator Charles Grassley, the Iowa Republican and chairman of the Finance Committee, is planning to hold hearings and introduce legislation to curb abuses in tax-exempt organizations, particularly the international ones, who have greater possibilities for abuses.

In a panic, the NGOs are trying to put their collective house into order. After decades of self-assessment or assessment based entirely on paperwork submitted by the organizations themselves (and that largely in the domestic sector), some international charities have been opening their books to independent assessors.

There has been a huge increase in the amount given to charity and in aid in the United States since 2001 but with it has gone a new cynicism about the role of those saintly NGOs. There have been various scandals, some of the personal financial kind, some of the more institutional.

After the tsunami many donors demanded assurances from charities and NGOs that the money will go precisely where they want it to go, that is the victims of that disaster. Enterprising lawyers have set up websites on which readers could monitor various charities and how open they are about the way they spend the money.

Plan International and four other large charities have given independent assessors a free run of their books. And it hurts. Sam Worthington, chief executive of Plan USA, part of Plan International, has been making rather unhappy and self-righteous complaints:

“This is something new to our sector to open our organizations up to a level of scrutiny that has not been the norm in the past. To some degree, you’re becoming the non-profit equivalent or a public company.”

“Smaller charities, especially those based in the developing world, might find it too expensive or too difficult to get certified…. Yet those local groups often turning bring local knowledge to tough relief and economic-development efforts, and are staffed by an up-and-coming professional class that donors want to encourage in developing countries.”

Taking the temperature of the EU constitution debate in Holland, Andrew Browne of The Times has been to Maastricht and finds that the Dutch are losing faith in Europe.

One of the people he interviewed was Frederick Brom, who declared that he was opposed to the EU harmonising everything. "In the EU, everything becomes the same, and that’s a real pity. When I go to France, I want to eat French cheese made by a farmer in his cellar, but with hygiene standards, everything becomes the same."

That is an interesting comment, not least because it transcends political dogma and gets down to the real practical consequences of European integration. To the despair of the Europhiles, who inhabit their own cloud-cuckoo-land of idealism, it is sentiments like this, amongst ordinary people, which I believe are eventually going to bring the "project" down.

Interestingly, my own route to Euroscepticism was driven by a similar sentiment when, as a recently qualified health inspector in 1972 I found that the (then) EEC poultry meat hygiene directive disqualified me from practising the craft for which I had just qualified, making me subordinate to veterinary surgeons, irrespective of whether they had any qualifications in food hygiene – all because there was no equivalent of the British health inspector system on the continent.

Browne calls this "cynicism", which he says has taken root in one of the EU's founding members, although I would call it realism. Nevertheless, he paints a word picture of European flags fluttering in the freezing wind outside the bars. In the marketplace, he writes, shops do brisk business in euros and the monument of metal Euro stars stretches skyward above the slogan: “We must move beyond nation states.”

Maastricht, that small Dutch town on the borders of Belgium and Germany, does of course have special significance in the history of the Union, the town where the treaty that gave birth to the euro was signed. It displays its European credentials proudly.

But, writes Browne, while the symbols remain in place, a strange thing is happening to the people who live here: they are starting to sound Eurosceptic. He cites “a grey-haired woman, as she scuttled along the cobbled pedestrian streets, lined with traditional Dutch gabled houses”, saying: "It's just too bureaucratic, too big. The EU and the people are too far apart... It gets bigger, bigger, bigger."

With the Dutch government having announced that a referendum on the constitution will take place on June 1, in an extraordinary about-turn, such sentiment may mean that he Netherlands may scupper the EU constitution. A recent poll showed that 42 percent of Dutch would choose to vote "no", against 28 per cent who plan to vote "yes", making the Netherlands the only founding member of the EU in which opinion polls suggest that the constitution will be rejected.

Other commentators whom Browne consults include a troupe of actors enjoying a midmorning rest outside a café in the main square in Maastricht – just your ordinary, everyday Dutchpersons. Nevertheless, they too have their grievances against the Union. Says Oda Selbos "with flowing red hair": "The euro is a big issue. Everything has doubled in price. When you went to Spain, it was nice to have a different currency. I want to have my guilder back."

Particularly exercising the Dutch is the ratchet of the growth and stability pact, which has forced the government to impose strict controls on public borrowing, causing considerable resentment when German and France seems to be able to break the pact provisions with impunity. This has special resonance as the Dutch are now acutely aware that they are the highest per capita contributors to the community budget.

Voters, Browne tells us, also have concerns about the economic impact of the euro. He talks to Xavier Schilling, an insurance manager, who says: "A lot of people in Holland at first thought the constitution was a good thing. Now they worry because the economy is not doing that well."

There is also widespread opposition to the decision to commence entry negotiations with Turkey. If she joined the EU, this would give 70 million Muslims the right to live and work in Western Europe. These fears are being given voice by the maverick politician Geert Wilders, whose opposition to radical Islam, Turkey and the constitution has propelled him ahead of the Government in the polls. Writes Browne:

In a recent speech in Rotterdam, Mr Wilders said: "The political elite wants to admit Turkey to the Union, an Islamic land of millions, that will have an enormous influence on the federal superstate. Because of the new European constitution, Turkey will have more influence on Dutch legislation than the Netherlands itself. It can't become crazier than this."

Simon Jenkins, writing in The Times today, seems to be worried by bloggers. Under his keyboard, “the desk shakes”, he says, recording that he attended a seminar in Washington this week on the future of opinion journalism, where the talk was dominated by bloggers.

They were everywhere, says Jenkins, permanently online to each other through 3G handsets. "The dedicated blogger updates his site two or three times day, as if no gossip must go unpassed and no abuse go unanswered. It is manic."

Dubbed "the democracy of the air", Jenkins concedes that the blogosphere has taken the press temporarily by storm, although he puts in some special pleading for his own craft. The "dead trees" edition of The Times is bought by some 700,000 people while five times as many visit the Times Online worldwide, he tells us.

But readers are declining. Jenkins cites an academic observer, Philip Meyer, who has calculated that at the present rate of fall the last newspaper will be read in April 2040. Nevertheless, he dismisses most blogs as a "scream of opinion" but admits they do give conventional journalism a problem. We have to prove, he says, is to prove that such qualities as newsgathering and reliability are worth more than the "scream of opinion".

He observes how often blogs refer to items witnessed on television or read in The New York Times. Someone, he says, must gather this stuff, check it, source it, write and edit it.

These are not professional trivia, he claims, but the essence of open debate. The mainstream media have to make money or the blog's professional resource will die. With newspaper sales declining and news bureaux shutting down across the world, the outlook is not good. It was never more true that opinion is free, facts are expensive.

With that, he says, British papers need not worry - as yet. Altough he is worried. "The ground did shake under me," he says. "Earlier threats to the press came from new conduits of news and information. Today's goes to the heart of my trade. It peddles opinion. I can pretend to occupy a higher plane. I can try pleading factual accuracy, consistency, uncorruptibility and a quote or two from Shakespeare. But in truth I too am a blogger, snatching at some item of passing news to argue a case and persuade. And I charge for it. The blogger does it for nothing. I am on my mettle as never before."

So says the great sage, but despite his claim to moral superiority, he is one of that band that indeed does little if anything more than the average blogger – he is a peddler of opinion. And while he might be one of the "great and the good", his influence is waning.

At the moment, The Times boasts 700,000 readers. A quick count of the top 50 "European" (but mainly British) blogs, however, gives an average daily readership of over 35,000. But that sample, published on Europundit is skewed by reporting only those blogs which use "sitemeter" to record their hits. Some major sites do not and, taking those into account, it would not be unreasonable to double the figure to 70,000.

That is ten percent of the Times audience and, with many of the blogs being less than a new old, representing a phenomenon which is new to Britain, readership can only grow. To judge from trends on our own blog – where we expect to see our hits doubled by June – collectively, we are looking at an audience in the millions within a few years.

That much you can given credit to the EU commission, for recognising the trend and launching the Wallström effort, but the fact remains that the blog – by its very nature – is a forum for the alternative point of view. It is too anarchic to be disciplined by the corporatists. Thus, Mr Jenkins, the bloggers are indeed on the march. And you are history.

The current issue of eurofacts quotes from an article published in Die Welt on February 23:

“From a liberal view, the EU Constitution remains a questionable document. It’s bulky, difficult to understand, and incluedes requirements that are more likely to hurt a free, competitive, western-oriented Europe than to help it … It creates an un-economic zone, whose competitiveness will be reduced and whose anti-western instincts will be written into law … nothing could be worse in view of the economic problems which the states of Europe currently face.”

Illustrating just how pathetically emasculated our government has become is the response by Dawn Primarolo, the paymaster general, to the ruling by the ECJ yesterday on the UK tax rules on mileage

As recorded by The Daily Telegraph, Primarolo tells us she is "deeply disappointed" by the court's ruling. But does she contest it, or express outrage, or tell us to ignore it? No, all she does is "vow to work with business to minimise its damaging effects."

This person, holding one of the great ministries of state in the formerly independent United Kingdom, is reduced to bleating on the sidelines that:

The European Commission will never convince the peoples of Europe that they are genuinely committed to an agenda to promote competitiveness, deregulation, enterprise and economic growth if they continue to undermine the interests of business by seeking to enforce the EC-wide VAT rules in this inflexible and impractical way.

It is well known in certain circles that the only way terrorism can be defeated is by European integration, the creation of pan-European officialdom and the defeat of that pesky common law tradition that insists on certain legal safeguards for people who might be accused of all sorts of crimes like sabotage or xenophobia. (Remember the 32 crimes on the European Arrest Warrant and the forthcoming European Evidence Warrant?)

Well, to be fair, those certain circles seem to be mostly in Brussels and Strasbourg. The latest complaints about EU member states not producing integrated legal systems, which are the only ones that could conceivably fight terrorism come from the President of the European Parliament, the Spanish socialist Josep Borrell.

Spanish socialists, let us recall, won the election after last year’s Madrid bombing, by promising to pull Spanish troops out of Iraq. Or so they said at the time. Now they are saying that they would have won anyway, because of their policies and, anyhow, there are still troops in Afghanistan and they are training Iraqi army and police officers.

So, it is really hard to tell what Spanish socialists think is the best way of fighting international terrorism. Borrell made an emotional speech during a special session of the European Parliament, after a one minute silence had been held to mark the anniversary of the Madrid bombing (a day early as the Parliament is not sitting today).

Among other things Señor Borrell castigated the EU member states for not doing all those many things to fight terrorism that had been promised in the heat of the moment after March 11, 2003 (and, come to think of it, September 11, 2001).

According to him, we owed it to the victims of the Madrid underground train explosions “to remove the barriers to better European cooperation”. Quite an extraordinary statement to make and one of the more original reasons for European integration I have heard for some time.

"When are we going to have a European public prosecutor? When are we going to have European legislation preventing money laundering? When are we going to see the connections between that subject and terrorism?"

Try as we might, we are finding it increasingly difficult to take the European Union seriously.

With the Juncker pronouncements on the growth and stability pact, following on from Mr Yves Mersch complaining that "some member states haven't understood the reasoning behind the introduction of the euro" and then the Austrian finance minister, Karl-Heinz Grasser, complaining about progress "in the wrong direction" – all in the space of days – reporting on this construct is taking on a quite unintended surreal dimension.

Add to that the findings reported in the previous post about the lethargic state of the economies in the EU member states and what comes over is a picture of drift, compounded by images of feckless politicians rushing around without the first idea of what to do. Altogether, the impression is of decay and disorder, a construct running into the sand, bolstered by grandiose rhetoric and very little else.

But what completes the picture and drives it into the realms of the surreal is that, while the financial ministers are thrashing around, trying and failing to make sense of a crushingly dismal economic situation, the environment ministers met yesterday in their monthly Council and blithely endorsed "ambitious targets" for emissions cuts, proposed by the EU commission.

Entirely oblivious to the growing economic crisis, therefore, and the frenetic efforts of the finance ministers in trying to kick-start the Lisbon agenda, which was aimed at making Europe "the world's most competitive economy by 2010" (Do pay attention and try to stop giggling.), these fools are calling for "additional cuts in polluting greenhouse gases" beyond those mandated by the Kyoto Protocol.

So, while the finance ministers are vainly trying to press down the economic accelerator, the environment ministers are slamming on the brake. Heaven knows who is holding the steering wheel.

Furthermore, these fools are still deluding themselves with the idea that the United States can be inveigled into joining their economic suicide club, setting targets of emission cuts of between 60 to 80 percent compared to 1990 levels.

Such is their deluded state that the ministerial collective has convinced itself that this somehow represents progress, with the arch-idiot Lucien Lux, Luxembourg's environment minister, telling the world that, "Today the EU has demonstrated its ability to take a leadership role in fighting climate change". One wonders whether he has talked to Mr Juncker.

Even the EU environment commissioner, Stavros Dimas, proffered a slight note of caution, warning that, while there were "pros and cons" for early action, "by setting ambitious targets at this moment" Europe risked leaving some countries behind and or "scaring them off".

The trouble is, we have been here before. Previously, we had had the "Lisbon agenda" and Kyoto. Now we are going to get Lisbon II and "post-Kyoto" – brake and accelerator applied together. Ever get that "groundhog day" feeling?

Confirming the EU leaders – whatever they are – are locked in a time warp, a "provocative study" on the EU’s economy – whatever that is – shows that the EU is today where the US economy was in the late 1970s.

The employment rate of just over 64 per cent attained by the EU in 2003 was achieved in the US in 1978, research and development spending in the EU matches the US level in 1979 and the EU’s GDP per worker was achieved in the US in 1989.

The study, presented by Eurochambres, the pan-European business organisation, demonstrates quite how far the "Lisbon agenda" has gone adrift and how hopelessly unrealistic was the idea of making Europe "the world's most competitive economy by 2010". (Do pay attention and try to stop giggling.)

And while the European Council is set to "relaunch" the Lisbon agenda later this month, the Eurochambres suggests that it will take the EU until 2056 to reach current US productivity rates and then only if EU productivity growth exceeds that of the US by 0.5 per cent per year.

Given the overall sluggish rate of growth in the EU-25, any such ambition lies in the realms of fantasy. If anything, "Europe" is going backwards.

But hey, at least that is progress… even if it is in the wrong direction.

Well, the fragrant Margot Wallström, commissioner for truth and reconciliation, certainly wanted to put a "human face" on the commission.

She seem to have succeeded - see here.

While Mr Yves Mersch, council member of the European Central Bank, may be an unhappy bunny over the direction of the "reforms" of the growth and stability pact but, it seems, his unhappiness quotient is nothing compared with that of Jean-Claude Juncker, Luxembourg prime minister and unfortunate holder of the EU presidency.

"Governments are not negotiating constructively," he wails: negotiations to reform the growth and stability pact have degenerated into "acrimony and finger-pointing," he says. "Everybody sees things on the list that benefit others, allowing the others to backtrack".

What is worse, Juncker observes, "Governments are protecting their own interests in boosting exemptions to the rules."

And that is not even the only thing that is making Juncker unhappy. His grief spills over into the Lisbon agenda - the "plan" to make Europe "the world's most competitive economy by 2010". (Do pay attention and try to stop giggling.)

"It is a disaster," Juncker says. "The main weakness of the 'Lisbon Agenda' is a lack of national ownership" of efforts to impose labour market and other economic reforms. "We have lost a lot of ground. There has been too much talk, too little action."

Oh dear, dear, dear. Poor little Juncker. All these governments protecting their own interests. That will never do. Still, only a few more months and he can hand the presidency over to Tony Blair. He could never be accused of protecting his (i.e., British) interests, so maybe it isn't such a disaster after all.

But there again…

The killing of Aslan Maskhadov, the last properly elected president of Chechnya (and not by 99.9% of the vote either) and the one separatist leader who has consistently called for negotiations with the Russian government, ought to have turned our attention to what is going on in Chechnya. No such luck.

The common European foreign policy in construction has no time to deal with what amounts to a concentrated policy of the complete destruction of a whole people, carried out by a government we spend our time being nauseatingly friendly to. Yes, indeed, I am talking about the government of President Putin, the man Europeans do not want to upset in any circumstance.

We still do not know what, if any, effect Maskhadov’s death will have on the situation. Previous deaths of this kind exacerbated it and, in any case, Russian intransigence had contributed to him losing a great deal of his authority to Shamil Basayev, an undoubted and self-confessed (except that he says it with pride) terrorist and mass murderer.

In the meantime, Chechnya and her capital, Grozny, have been destroyed; the people live in the direst poverty (not by UNICEF but ordinary human standards); those young and not so young men who have not been killed, imprisoned or murdered by torture have disappeared into the mountains to wage a constant war of attrition, and, in return, the Russian troops have been waging a savage war on the women and children who have remained in accessible places.

The media has been kept out of Chechnya and the surrounding areas, such as Dagestan and Ingushetiya and only reliable reporters have been given any stories at all, even on the subject of the increasing terrorist attacks in the rest of Russia.

During the Beslan siege, which, incidentally, has still not been properly examined and explained, the two journalists with any credibility at all, Arkady Babitsky and Anna Politkovskaya, were prevented from reaching the place, in the latter’s case by the administration of a near-fatal dose of poison.

No explanation has ever been given as to how and why it happened that more people were killed by Russian troops or died as a result of their activity both in Beslan and in the Moscow theatre siege.

The western world does not want to know about Chechnya or what is going on there. Even Secretary of State Rice and President Bush managed not to raise the subject too obviously during their separate meetings with their Russian counterparts, though each spoke admirably firmly about the gradual and not so slow destruction of basic democratic principles in Russia.

As the French philosopher and author André Glucksman wrote in an otherwise admiring open letter to President Bush in Monday’s Wall Street Journal Europe (before Maskhadov’s death had been announced):

“You did not let the word Chechnya be heard. Remember Grozny, Mr President, once a city of 400,000, the first capital to be razed by a European army since Hitler punished Warsaw in 1944 Think of this small people, less than a million inhabitants, which has lost between a fifth and a quarter of its population over the last decade. In proportion, imagine France being bled of 13 million people,America of 60 million.”

“The main reason for Russian cruelty in the Caucasus, Tolstoy ahd already spotted, is pedagogic. What matters is to make an example and to teach the Russians themselves what it costs not to follow ukases.”

“… in these times in which, against all odds, information does come through, a people that annihilates one another cannot be free itself”.

“Peace at any price, peace before all, peace even out of the graveyard.”

"And for all of those that say, if you look at the last thirty years, we have lost power to Brussels, actually it isn’t true. In the last, certainly in the last eight years, as we, the Labour government, have been more involved in Europe, so we have become more powerful and more prosperous, better able, literally to implement a patriotic case for the European Union."

Jack Straw
Foreign Secretary
BBC Today Programme, 9 February 2005

According to the Scotsman today UK firms could be facing extra costs of £250 million a year in VAT bills when, as expected, the ECJ rules that the way firms deduct VAT from the sums they reimburse to staff for work-related mileage breached the EU’s Sixth VAT Directive.

The rules, set up by the British government, allow employees incurring costs on behalf of their employers, either submit a petrol receipt for payment, or to claim expenses on a cost-per-mile basis.

The employer in turn then qualifies for a VAT deduction on the fuel element of the mileage payment – usually about 1.5 pence of every 10 pence per mile reimbursed to the employee.

Yesterday, however, the ECJ outlawed the 1991 VAT Order, saying the system “does not ensure that the VAT deducted relates exclusively to fuel used for the purpose of the employer’s taxable transactions“.

Despite the government arguing that it was up to member states themselves to arrange conditions and procedures for VAT recovery, the Court ruled that the Sixth VAT Directive clearly specified the conditions under which companies could recoup VAT. There was no national discretion in implementing the law.

The ruling explained that the UK 1991 Order allowed an employer to deduct VAT on the fuel supplied to employees carrying out the employer's work. But the UK order did not specify that the employer’s right to deduct VAT only applied to fuel bought by the employee "for the purpose of the employer’s taxable transactions".

On the contrary, said the judgement, the UK order allowed companies to recoup VAT from the taxman on the basis of the total distance travelled, even if it included "distances travelled otherwise than for the purposes of the business". The ruling continued: "It is therefore possible for the employer to deduct VAT in respect of fuel used by the employee for his private purposes."

It followed, therefore, that the UK Order was not compatible (with EU law) since it did not guarantee that the VAT deducted related solely to fuel used for the purposes of the taxable person’s (the employer’s) taxed transactions.

The Commission also argued that company VAT deductions were only valid on presentation of receipts in the company name – unlikely as most employees buy petrol in their own name or have no VAT receipt at all in the case of a fixed-rate mileage calculation.

According to chief executive officer Ashley Whittaker of GlobalExpense, a firm which handles expense claims on behalf of clients including Sainsbury’s and WH Smith, the risk now was not just of an extra quarter-of-a-billion pound cost to UK companies:

There is a danger that the Commission victory will have a knock-on effect of £1 billion in extra VAT costs, as eventually this approach will be extended to all expenses typically paid for by employees directly, such as hotels, subsistence food costs, phone bills and taxis. This is highly likely as this approach is the norm in most EU countries.

In a letter to The Times today, Dr Simon Morgan recalls a lecture series on EEC membership in the winter of 1961-62.

In so doing, he brings up the old canard about "warnings of loss of national identity", which, he says, were as vociferous in 1961 as they are today. "Perhaps theirs was a particularly delicate flower, but the roses, thistles, leeks and shamrocks still seem quite distinct to me," he writes.

Why the Europhiles continue to bring this up defeats me. The obvious response is to ask whether the French were any less French in June 1940, compared with a month previously?

Frankly, "national identity" is not an issue to serious Eurosceptics. What does matter is who governs us. And while many of us have very little time for TB, he does at least have one great merit. We can get rid of him - and perhaps sooner than we thought.

With the Terrorism Bill being shuttled between the Commons and the Lords today, one of the complaints voiced by MPs was that only three hours had been allowed to debate the changes made by the Lords.

However, spare a thought for those very few MPs who turned up to European Standing Committee A yesterday afternoon. As usual, ignored by the media at large and by just about everybody else, theirs was the inglorious task, in a mere two hours, of approving the government's position on the EU fishing quota allocations for 2005 and 2006.

And if the MPs in the chamber thought they were hard-pressed today, what confronted MPs in addressing the "Euro-A" debate was not on a mere few amendments from the Lords but on a bundle of highly technical documents no less than 887 pages long, to which was added at the very last minute another 17 pages bringing the bundle to over 900 pages.

Just to make things more entertaining, some of the documents came in a variety of languages, including German, Italian, Greek, Dutch, French and, possibly, even Flemish.

The debate itself was highly technical and. as usual, can be read on the Hansard site but, as we have observed before, the whole thing makes a mockery of the idea of Parliamentary scrutiny of EU legislation.

The point was adequately made by Owen Paterson, Conservative shadow fisheries minister, who opened his speech thus:

I have to begin by saying that this whole process is most unsatisfactory. I was on the European Scrutiny Committee and had the pleasure of serving under the chairmanship of the hon. Member for Clydesdale. Our record was getting through 78 documents in two minutes. To put it bluntly, that was not scrutinising legislation. However, this time I think we have set a new record.

I shall repeat my experience, as I should like to get it clearly on the record. Last Thursday, I asked my office to ask the Vote Office to send me the bundle, which at that time was relatively modest. It did not arrive, which was unfortunate. I went to the Vote Office yesterday and found that the bundle contained 887 pages, some in languages that I cannot speak. I found today that a further addendum had been added—I think that my hon. Friend the Member for Rayleigh said that it was 17 pages long—which I did not see until 2.36 pm. That is not the way to run a sweet shop; it is not the way to run a Parliament; and it is certainly not the way to run an industry that affects thousands of people in some of the most remote parts of these islands who are being treated very badly. It would be helpful if the Minister could pass on our strong concerns, which have been angrily expressed by my hon. Friend.

It is the second week running that we have had a mixed motion, in which we are expected to note the documents, which, with 887 pages, we can pretend to have done, and to approve the Government's policies. I am afraid that we cannot do that, as there is a huge difference between us and the Government on how to proceed in running fisheries. There is not another fishery in the world that is run in such a way…

What we are doing here is farcical. We are rubber-stamping something that has long been passed. The serious discussions happened late at night for three days, or whatever it was, with the industry shut away in its hotel and the Minister making an extraordinary number of decisions, as we see from the papers, in a great rush.