Category Archives: Euro

Politics, not overfishing, devastated fish stocks.


The Hague Preference.

Robert Ludlum really should have come up with that one before Fisheries Ministers did. It would have been a perfect fit for his tersely titled, spy thrillers. Since 2002 though it has been a small part of the complex architecture of the worst piece of policy making currently implemented by the EU – The Common Fisheries Policy.

The worst piece of policy making? Really?

Well, when the commissioner responsible for its enforcement, Maria Damanaki, apologises for it you can assume that it is not actually fit for purpose.

The Hague Preference is a codicil to the policy that depending on your point of view has either kept fishing communities in Ireland and Scotland alive or has contributed to the depletion of fish stocks to close to the point of no return.

The Hague Preference, incredibly nothing to do with Robert Ludlum

The Hague Preference, incredibly nothing to do with Robert Ludlum

The CFP was supposed to apportion quota on a basis that would sustain an economically viable industry and increase fish stocks side by side. It failed miserably at both. In reality marine biologists were presenting their warnings to the fisheries ministers every year. The ministers would thank them, make some of the right noises about preserving fish stocks and then get stuck into extracting every last kilo of quota possible at the negotiating table. Fishermen were spending more and more time at sea and extracting less and less fish because the stocks just weren’t there. The increased costs associated with fishing this way were pushing them to the wall. Fishermen and fish were losing out because policy makers couldn’t change their way of doing business.

You can read the Euro speak definition of The Hague Preference here if you want to give yourself a headache. In plain English though it allowed Scottish and Irish fishermen to ignore reductions in the Total Allowable Catch because their financial situations were so precarious. The Hague Preference alone isn’t responsible for depletion of North Atlantic fish stocks (they’re actually on the rise) but it is a good illustration of how the CFP served nobody’s long term interests.

Fishing net

Though Fish Discards is only a single aspect of the CFP it is the one that has forced the pace of all the other reforms. There’s a handful of celebrity chefs and NGO’s that should take a bow here. Highlighting the stupidity of chucking a quarter of everything that has been caught back into the sea to die made it profitable for some politicians to push CFP changes up their agenda. Regrettably though as an unsustainable system was left to run for so long change will bring upheaval. Everybody claiming authorship of the reform process is pushing a long term increase of 37,000 jobs in the sector across the EU. It is hard to see in the short to medium term, though, how allowing stocks to replenish won’t also see further job losses.

I explored more of these tensions in a radio piece you can podcast here. Inevitably now though whatever distress is caused in coastal communities will be painted as a clash between environmental and social priorities. But if you need a scapegoat – decades of a “slice of the pie” approach to politics would be a far more fitting suspect.

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Arriverderci Silvio, Ciao Dr Doom

One hour before I head to the airport …..  yet again. I feel that I have single handedly kept Michael O’Leary in check shirts this week. But as I leave, sitting here on the side of the Via Nazionale, there’s a bit more urgency to Rome than when I arrived two days ago.

Carabinieri buzz about in their squad cars, a police helicopter circles the city centre. Riot police are hidden around the side of many government buildings. The political pace has picked up. I just spotted three bus loads of a military brass band being given an escort through town. Whether they are rehearsing a final hurrah for Silvio or preparing to herald the arrival of Mario is not clear.

You’d have to imagine it’s something Silvio has arranged for himself because no unelected government coming to power with the single unfortunate mandate of inflicting pain on its people would afford itself that level of pomp and circumstance. But then again … this is Italy.

The pace of things is definitely picking up here. The Senate has just voted in favour of an austerity package. When it’s passed in the chamber tomorrow (which seems to be a given) Berlusconi will resign. President Napolitano could then go through the pretence of calling all the party leaders and asking them if they thought they could form a government but in reality the call has already been made and Mario Monti has already begun putting a programme together. He’ll have is feet under the desk in Berlusconi’s office by Wednesday morning at the latest.

So  it’s all go … but only on the political front. The cancer in the economy is metastasising. Put simply increasingly nobody wants to lend to Italy at competitive rates because they don’t believe it can service its debt any long, and if nobody will lend to it at a price it can afford Italy won’t be able to service its debt any longer. Somewhere Joseph Heller chuckles.

Up until today I had only heard people talking about Italy having a liquidity problem. Short term cash flow issues, if you will, that would be solved by an orderly departure of Silvio Berlusconi from the stage. But now some are muttering about possible solvency issues. It’s not clear to me if they mean now or in the future if cash flow isn’t sorted out.

Can that really matter? Private lenders won’t give it money at a rate it can afford long term. Lenders of last resort don’t have access to the kind of cash it would take to plug the gap. And the government would have to generate a 5% surplus just to meet the interest bill on the €1.9trillion debt. That’s being stuck between a rock and a hard place with the added dilemma of the waters rising around you.

Dr Doom, Nouriel Roubini, who is to the global economy what Morgan Kelly has been to the Irish one had a scary op ed piece in the Financial Times this morning. He didn’t see a way out for Italy short of the  ECB becoming an “unlimited lender of last resort”. And who would do that if there is even a sniff of insolvency in the air.

His argument was a lot more nuanced than my summary but essentially if the third biggest economy in the Eurozone goes south so too does the eurozone. Reaction in Italy is interesting. I gave his piece to a Journalist, an Economist and a Politician today. The first two said he was spot on. The politician completely disagreed using the well worn “fundamentals are sound” argument. But then he’d have to say that as he’s probably going to be a minister in the new government.

His name is Enrico Letta and I’ll post a link to my Drivetime interview with him when it’s been podcast by my colleagues back at base.


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Going the full Monti – notes from Rome and Athens

“He is a man of his word. I trust him. If he says he will go then he will go”. Maria tells me, stirring a third sugar into her coffee. She is not happy about the manner of his departure but “Enough is Enough”  –  Basta she says  – a uniquely Italian way of saying “That Does it”

Even through Bunga Bunga and all his other self inflicted losses of dignity Maria and so many of her older generation of voters stood behind Il Cavaliere. But now that he says himself he feels liberated by his decision to not seek re-election …. now it is time to accept that the pressure is too much to bear.

Italians seem a little bit behind the curve of events though. There is little awareness of the reluctance of investors to lend to the country just so it can service the interest payments on its two trillion euro debt.  Though I did hear some sarcastic talk that they should have known something very serious was afoot when Berlusconi recently postponed the release of his fourth album of love songs.

While conversation in Europe moves on to the possible shape of a two tier Europe and who would be in or out debate in Italy is still rooted in the politics of personality. Giving your support to the technocrats technocrat, Mario Monti, will be enough to reassure the markets we are serious about wanting to be perceived as being serious is the gist of what a man reading the business section of La Stampa tells me.

If this was the week that Italy realised that Berlusconi might be bad for business in Athens they had little but contempt for their politicians. On Tuesday and Wednesday as the wrangling and jostling for position of interim Prime Minister continued I sampled opinion among those hit hardest by austerity.

“This is not the Europe we dreamt of” Train Company employee Akis Margaritis told me. “This is a European Junta. A fourth Reich” He was expressing a common view that it didn’t matter much who was in the new government because everything was now being dictated from Brussels. How often have you heard that view in the last thirty years – except now for Greeks it is the undisputable case.

I heard little other than jaded cynicism being expressed towards the Greek political classes. There was a general feeling that whatever a politician said in opposition once in power they would impose further austerity. For that matter I also heard little or no responsibility being accepted. “I might have to give up going to the cinema and theatre” one public servant moaned about the impact of cuts. Greece’s bloated public service with its overpaid staff is as big if not bigger an obstacle to recovery as tax evasion.

The two main parties in Greece – the socialists and the conservatives – were very deeply embedded in Greek society. At the next election they are facing a rout of similar proportions to that suffered by Fianna Fail. Voters are shifting their allegiance to the further ends of the political spectrum. In Athens city centre I was surprised to see far right party Golden Dawn brazenly flying a Nazi styled banner over its headquarters proclaiming “Greece for the Greeks”. They are nothing more than a fringe grouping now but as things stand Greece will be in Austerity mode possibly as far into the future as 2027.

Just like Greece eventually settled on Lucas Papademous as its newly unelected leader Italian voters are being asked to shift their allegiance to a new prime minister with no mandate either. One man at a bus stop pointed out that the Italian Parliament was voting that day on budget cuts that had been decided by unelected EU officials and they would be implemented by an unelected government of former EU officials. Isn’t that what happens when the people you elect don’t run your affairs properly? He turned away from me.

We’ll all be lucky if it’s just national pride that is a bit wounded by the time this ends.



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