In December last year, I had some delicious seafood in one of a chain of restaurants in Cyprus. The chain was actually South African owned, and the style of cooking was actually Cape Malay. The restaurant didn’t mention either of these things in its advertising, signage, or on its menue. There was a vague suggestion that it was Cajun. (Being very vague about where they come from is a skill South African businesses picked up in the apartheid era, and they haven’t lost it). When I got my bill and paid by credit card, I was intrigued to see that the merchant bank was not a local Cypriot bank, but was a South African bank. I was slightly mystified by this at the time (other than that it is no secret that, well, interesting capital flows go through Cyprus), and wondered if the restaurant and the bank shared ownership for reasons similar to the reasons why the mafia also finds it convenient to own lots of restaurants.
Possibly, though, the situation is simpler. The Cypriot banks were and are bust. A South African company doing business in Cyprus does not trust the Cypriot financial system and is avoiding it as much as possible by bringing its own bank. Perhaps my payment for seafood was going directly to somewhere else in the euro area rather than to a Cypriot registered institution. Possibly it was going further afield. Some of the species of seafood on the menu were not native to the Mediterranean, so there were certainly foreign payments to be made, and that part would at least be legitimate to some extent. (To be fair, seafood may be one of the world’s most globalised industries, and this is true of almost any seafood restaurant anywhere). Someone, though, may have suspected what was coming.
“More regulation” is the cry in every gagging throat, following the revelation that numerous cheap meat dishes in several supermarkets that were labelled as beef or lamb actually contained horsemeat.
Regulation caused the problem in the first place.
From today’s Times (subscriber only):
The Government knew last summer that a sudden ban on cheap British beef and lamb meant it was “inevitable” that unlawful meat would be imported from Europe.
Unintended consequences, again. It would make a horse laugh.
Jim Paice, the former Agriculture Minister, warned the committee last summer that unlawful meat would be imported from Europe as manufacturers sought cheap sources to make up for banned British supplies.
The warning came after the FSA [Food Standards Agency] suddenly told meat processors to halt the production of “desinewed” beef and lamb, which was used in tens of millions of ready meals, burgers and kebabs each year, after orders from European Commission inspectors.
The committee demanded in July last year that the Government set out its plans to prevent illegal imports, stating: “The Agriculture Minister’s evidence suggested that it was inevitable that wrongly labelled or unlawful meat products would be importing into the UK to replace UK produced desinewed meat.”
Emphasis added. Do not, however, expect this aspect to be emphasised in the Radio 4 Food Programme. I could be proved wrong; there is a podcast here which I am not in the mood to listen to, but so far the BBC’s coverage has been a relentless flow of, if you will forgive yet another revolting processed meat metaphor, pink slime.
An independent Ireland – an interesting idea, so when are they leaving the E.U. then?
Surely rule from Brussels is no more “independence” than rule from London.
- Paul Marks
Here is a classic piece of nonsense to start this week in chilly Britain:
The UK tax authority said the amount of tax that big companies may have underpaid by using artificial intercompany transactions to inappropriately reduce taxable profits has risen 48 percent last year. The figure comes as public anger grows over tax avoidance by big businesses and British MPs investigate possible remedies.
- (From a report from Reuters.)
I read this report carefully and nowhere does it say that the firms concerned have broken laws, engaged in fraud, or used violence or engaged in criminal acts. They are taking full advantage of the laws of the jurisdictions with which they have contact, as their shareholders would expect them to do in maximising shareholder returns. If politicians really wanted to reduce what they see as such dodgy tax avoidance, perhaps they should enact taxes that are simple, low, and flat. This is not rocket science, as the 2020 Tax Commission report issued last year showed.
The recent naming and shaming of Starbucks, for example, of simply making use of legal arrangements, was particularly odious. No wonder people are thinking that we are living in a world like something from the pages of Atlas Shrugged.
Tim Worstall writes about this sort of issue a lot, usually in the process of skewering that socialist “accountant” from Wandsworth, Richard Murphy. Tim is always entertaining and instructive at the same time.
A large chunk of the Political Class is starting show all the signs of an entrenched deeply entitled group starting to smell the whiff of the great unwashed upwind of them.
No ‘responsible’ leader could ever leave EU, says Danny Alexander
David Cameron risks ‘sleepwalking’ UK out of EU, warns Ed Miliband
My gawd, what might happen if people in the UK actually got a choice about the EU?
But of course anyone who thinks that Dave Cameron actually wants the UK out of the EU, in spite of mild bleeting about ‘renegotiation’, is quite frankly a wilfully blind fool. My only hope is that Dave is stupid enough to think that he can ride that particular wild horse and keep it under control and taking sugar from his hand without biting his fingers off.
Fortunately I think he really is that stupid.
One of Obama’s apparatchiks has said that Britain’s membership of the EU was in the American interest.
Two responses spring to mind.
The first was… So what? This remark was obviously aimed the the dismal British government but furthering ‘the American interest’ should be very low on the list of priorities of any government that is not located in Washington DC. So even if it was true (and frankly nothing could be further from the truth), this should be of trivial import to anyone in the Sceptred Isles.
The second was… ok, so how much are you willing to pay for that “US interest”? If the US interest is served by continued British membership of the sclerotic EU, then perhaps the hapless US taxpayer should get shafted for, oh, lets say 50% of the cost?
“If you think that Westminster exists in a bubble, you should try Brussels. For the 18th successive year, the auditors have failed to approve the EU’s accounts. Meanwhile, the EU wants much more money.”
- Roger Bootle. He is writing in the Daily Telegraph, but given that the DT now imposes a paywall on non-UK readers, I am not going to bother with the link.
A year ago today I posted Discussion Point XXXVI
What will happen to the Euro? I am not asking “what should happen”, but what will happen. Take this opportunity to put your predictions on the internet, and later be hailed as a true prophet or derided as a false one.
Come, take your bows, or your lumps, and predict anew. The fat lady has not yet sung.
…out of my cold, dead hands. I am always using the tech industry as an example of how wonderful things can be when largely unregulated by governments. But of course it is not really true.
There are currently seven specifications for graphics cards – G1, G2, G3, G4, G5, G6 and G7. Graphics cards of the G7 classification have a bandwidth of 128 GB/s (GigaByte per Second) and more, without an upper limit today. The category depends on the performance – in this case measured in memory bandwidth. These GPU categories are also paired with a certain level of energy efficiency. If a graphics card doesn’t live up to the standard set by the EC it can be removed from all markets within the EU. The rules will now be constricted, which threatens next generation graphics cards.
Blah, blah, blah, etc. The thing to realise is that the EC is taking an arbitrary measurement (memory bandwidth), making arbitrary categories, and then applying energy consumption limits to the categories. But innovation does not work that way. Specialised graphics processing hardware might choose any number of other trade-offs than memory bandwidth to achieve other goals. What will happen now is that human effort will be spent on maximising performance within constraints set by bureaucrats.
Hat-tip to the libertarian sub-Reddit.
Update: The source article has been updated (thanks to Sigivald for noticing). It seems graphics cards with a high enough memory bandwidth are now said to be exempt from the regulations. But this is in itself a restriction and regulations only ever get more restrictive.
On July 1 next year, Croatia becomes the 28th member of the European Union, and under the terms of the Treaty of Maastricht this new, proud sovereign state – not yet two decades old – must accept the entire corpus of EU law; and she must place her neck in the noose of the single currency. Unlike Britain or Denmark, the Croats have no opt-out. They are now legally obliged to give up the kuna for the euro, and I say, don’t do it, folks. It is not only a mistake. To submit to the euro would be a stunning refusal to learn the grim lessons of recent Balkan history
- Boris Johnson.
Blimey, I can hardly believe I just quoted Mr. Toad. But whilst I share BJ’s sentiments on this, knowing Croatia reasonably well, I suspect there was less opposition to this than one might have expected due to the indigenous Croatian political class being such a dismal collection of pond scum and turds who floated to the top. I think the average Croatian could not see how shifting power away from these wankers could possibly make things worse. And of course they are entirely wrong on that score, as they will eventually discover.
The EU is a Seventies solution to a Fifties problem
- Nigel Farage
I just read this piece by Jeff Carter about how Germany is doing all the productive work for the entire EU. This bit in particular:
If I am the Germans I feel like the weightlifter on the bench press that just had a couple of manhole covers added to the bar. How can you have a European Union, when only one country in Europe is productive? Socialism is like that. They direct and regulate, you produce.
Which made me say to myself the phrase “Germany shrugs”. Which I then googled, and I got to this by Andrew Lawford:
Some time ago, I read an interesting article that outlined the fact that a Greek exit from the Euro would compound its problems in that it would have a new currency that would devalue markedly against the Euro, but would have all its debt still denominated in Euro. Obviously the situation would be resolved either by passing a law that redenominated all Greek debt into the new currency, or simply by defaulting on the payments of Euro debt. The end result for investors would be much the same.
The interesting thing to consider, though, is if Germany were to quit the Euro. The rule that applies to Greece would presumably apply to Germany too: a new currency would be introduced, but the nation’s debt would still be denominated in Euro. In this case, however, the new currency would presumably appreciate massively against the Euro, thus reducing Germany’s debt burden as measured in its new currency. This begs the question: would Germany redenominate all its Euro debt into its new currency? Certainly this is what investors expect as they push bund yields to record lows during the current “flight to quality”, but upon what basis can such a redenomination be expected?
And he ends by saying:
The Germans may simply shrug.
I am surprised that “Germany shrugs” (most of the google hits had an “off” bolted on to the end followed by whatever it was that Germany was shrugging off) is not a more common phrase. It certainly will be, Real Soon Now. Trouble is, the whole world, including us here, have been wondering for ages when “Germany”, by which I mean the people of Germany rather than their EU District Commissioner rulers, will finally demand that their leaders stop leading them into an economic morass and put their economic interests first.
I’m now inclined to think that I got it right at the end of this, where I said that the EU will only collapse when it has entirely run out of all its money and all its power, and all of it will then collapse.