Surrender, again

It's a curious thing, but whenever I think I've finally resolved my doubts about whether Britain should remain in the EU, the Europeans invariably hit upon some new way to disappoint me.

This week it was Jean-Claude Juncker throwing a lifeline to Trump by, basically, capitulating to his trade war. So much for the EU's vaunted "bloc strength" in negotiations. What exactly is the point?

EU-US tariffs are already very low, or at least they were until Trump started his evil little trade war. So "working toward zero" - even if "zero" is eventually attained - will have very slight impact anyway. But handing Trump a PR victory? - that's just fucking stupid. It's like giving a toddler an ice cream to stop them from throwing a tantrum.

Shake it all about

At one point last week, my favourite referendum pollster was projecting a 48.5% Leave vote. That is, as the Duke of Wellington might have put it, a damned nice thing.

Today the odds have slipped back to 46.5%. Which is still closer than it was last month.

Now, we know there is tendency for polling margins to narrow, as major votes approach. I don't know how well studied or documented this is, but I'm reasonably sure it always happens. Landslides are no fun, and more importantly, they don't make for good copy. As a vote approaches, journalists will do whatever is necessary - including commissioning as many spurious polls as necessary - to make both sides believe the margin is much closer than it is. (Which is why both of Obama's elections were billed in advance as "too close to call", even though, by electoral college rules, they were never in much doubt.)

Even politically, it makes sense. A side that thinks it's losing will keep changing its strategy, finding new avenues, until it finds something that improves its standing. Whereas the top dogs will just keep doing what they "know" works - until they feel threatened, at which point they'll get a bit bolder, and the gap will likely widen again slightly.

(There must be some way to make a profit from this rule. If only Ladbrokes had a mechanism for placing a bet, then 'trading it in' later when the odds change - but I doubt if they do, because it'd be too open to abuse and corruption. You need to be a banker to get away with that sort of thing, bookies are too closely watched. But if anyone knows a practicable way to do it, please do tell.)

I must confess - if I had a vote at all, I'd be increasingly tempted to vote 'leave'.

Not because I think the UK or its people would be "better off", for any material definition of "better". Anyone who thinks the UK would be richer, or freer, or better run outside the EU is someone who simply hasn't been paying attention, this past quarter-century. No, the only sane and rational reason to vote "leave" is if you believe it would lead to the breakup of the European Union itself.

Why would you want that?

Much as Niq argued about Scotland leaving the UK - the EU is broken. The UK actually does pretty well out of it - those really suffering are the Mediterranean countries. The Greeks, Italians, Spanish and Cypriots are looking at youth unemployment rates well over 30%, and the Germans have made it very clear that they're not taking any nonsense about "democracy" from those countries - they are governed by bankers, until such time as German voters decide to let them go.

And they've made it just as clear to Britain - that even without the financial stranglehold they have over the Med, they won't put up with any wandering from their prescribed policy. "Stay in the EU", their message has been, "and you will play by our rules. Leave, and we will do everything in our power to punish you. Moreover, we regard your 'democratic process' as a pistol to our head, and we will not negotiate under such terms." (Working out the terms under which they would be willing to negotiate is an exercise for - who, exactly?)

This cavalier attitude to democracy is bad enough within Europe, but outside its borders it becomes positively dangerous. We've all seen the disastrous consequences of EU meddling in Ukraine and Georgia; and if the Baltic States survive, it will be thanks to a sterner stance by NATO, nothing to do with the EU. (In fact, here's a prediction: if Trump wins the US presidency, at least one of Estonia, Latvia or Lithuania will be overrun by the Russians within four years.)

Game theory teaches us that "playing nice" is a good strategy, only as long as the other players hold to it too. If you carry on being nice when they play dirty, you get screwed. Of course there is a price to be paid for breaking the tacit agreement, even if the other side has already broken it first; but if you show you're not willing to pay that price, you can expect to go on being screwed until you are. I have personal experience of this dilemma. I voted "out" then.

If you're in Britain this week: voting "out" will certainly cost you. Probably, a lot. (There will be people who will come out of it better off - but believe me, those are people who've laid their plans and invested their money and made their friends accordingly. In short, they're Not You.) But that doesn't necessarily mean it's the wrong thing to do.

An open letter to Angela Merkel

I know you're probably fed up with Alexis Tsipras. You know, that irritating Greek demagogue who can't afford a tie? I can quite see why you want rid of him.

But I urge you - I beg you - please stop pandering to your own voters. Yes, I know you have to bring them along too. I know you can't keep giving their money to the Greeks. That's not what I'm asking for.

First, let's consider Mr Tsipras's position. As you know, the job of a head of government isn't easy at the best of times, and Mr Tsipras was catapulted from relative obscurity into his current role at a moment when the difficulty slider was already pegged at '11'. He has no friends, no substantive supporters, and no resources.

Yes, it was dishonest of him to call his referendum when he did, instead of a week earlier, before the IMF default. And it is obviously dishonest of him to offer concessions at precisely the moment when he knows you (and your friends at the ECB) can't accept them. But - setting that aside for a moment, because it's no more than you'd expect from a politician of his questionable training - would you not agree with me that the referendum itself is not only the right thing to do, but the only thing he can do?

His voters hate austerity. That's his party's entire raison d'etre; for him to cave on that would be political suicide. And yet his voters love the euro. For a long time now, it's been obvious that Greece can't preserve the euro without sharp austerity; but for almost as long, it's been equally obvious that austerity is not, contrary to what certain technocrats on your own side would argue, "expansionary". Quite the reverse. If it were, Greece would be doing fine by now.

Calling a referendum was the only way to square that circle. This is a decision that absolutely should be made by Greek voters - not by their government, or by the ECB or the IMF, or even by you. The European Union is supposed to be fiscally sound, honest and transparent, but above all it's supposed to be democratic. That means, nobody is fitter than the Greek people to make a decision about their future. And that is why the rhetoric of some Eurocrats who have described the proceeding as "irresponsible" or "in bad faith" is both unfair and unhelpful.

Making Mr Tsipras an offer he couldn't accept - accept precisely the same terms that he'd just won an election on the basis of rejecting - was also cackhanded. If you want to finish him off - and as I said up front, I completely understand that impulse - you need to be a lot more subtle about it. It's not your job to pressure him - leave that to his own voters.

The jackbooted approach you're currently pursuing is profoundly damaging not just to the euro, but to the EU itself. If the EU isn't democratic - to the very core of its being, overruling every other consideration - then it's basically just a rebranding of the Holy Roman Empire. And it will die the same way, with blood and iron.

And that death may come quickly. Britain's referendum is only two years away. Press the Greeks too hard, and the British will take notice. The euro can, probably, survive Grexit; but can the EU survive Brexit?

If it comes down to a choice between saving the euro and saving the EU itself, which would you pick?

Of Greeks and gifts

I'm rapidly coming to the opinion that my father was right about Germany.

When the Berlin Wall came down in 1989, he was the only person I knew who didn't think it was an unreserved blessing. As he saw it: for the past 40 years the whole of German policy had been focused on the single goal of reuniting the country, and with that achieved, it would soon turn its attention outward. The rest of Europe had reason to fear.

In the 1990s, when "European integration" was in vogue, he shook his head and muttered darkly about German imperialism. Something about the country's geography and history. I got a glimmering of what he meant when I briefly studied the life of Frederick the Great, but I still thought that tying it to the present day was paranoia. Besides, I reasoned: as long as they didn't start building an oversized army, what's the worst that could happen?

Then came the Eurozone, and he threw up his hands in horror and prophesied doom and catastrophe and the next European war. Those with long memories may recall that, in the beginning, there were "strict rules" about who could join the Eurozone: you had to have public debt below something, a defecit consistently below something else, exchange rates stable over N years and so forth. He predicted - correctly - that those "strict rules" would, quietly and without fanfare, be relaxed, because otherwise Italy wouldn't get in, and without Italy, the Germans wouldn't see the point. It's the Holy Roman Empire all over again.

Again I laughed at his fears. Clearly, his generation has a chip on its shoulder about the Germans, but that was all a long time ago. Me, I've been to Germany several times and I've met any number of Germans, even known a few. They're perfectly normal people. Nothing scary about them.

Now we have the Greek crisis. And suddenly, it's Germany that's playing the heavy.

The Greeks have created an economy where they can run a primary budget surplus (i.e. before counting debt repayments) even with over 25% unemployment. That's no mean feat.

More importantly, though, it's stupid. Governments are supposed to increase spending in recessions (defined loosely, but "over 25% unemployment" would qualify by just about any plausible yardstick) and reduce it afterwards. But the terms of the Greek bailout allow no such latitude. Greece is required to run a primary budget surplus - a large one - every single year for the next 20 years, come boom or bust. The Germans should know from their own history what happens when you impose terms like that on a country: it happened to them in 1919, and within ten years they were setting a benchmark for hyper-inflation that stands to this day.

Realistically, I think the Greeks have two options: they can leave the Eurozone peacefully, or they can declare war on it. I'm honestly not sure which outcome the ECB is currently trying to trigger.

Poisoning the cloud

A lot of Europeans seem to have got their knickers in a twist over Microsoft's plain speaking on data protection. Stripped to its essentials, the CEO of Microsoft UK said that Microsoft doesn't do data protection as required by EU law, because US law explicitly forbids it.

I can see why this causes some consternation, but legally it seems quite straightforward to me. Microsoft, by its own account, can't provide a "safe harbor" for personal data on European citizens. Therefore, any European company that tries to store such data in a Microsoft-provided "cloud" service is opening itself to legal action from its European customers (and/or European governments, prosecutors or regulators, depending on the individual country's law). Those companies, in turn, might sue Microsoft for misrepresenting its service (before last week, at least), and they and Microsoft might sue the aforementioned governments and regulators for losses arising from negligence in applying their laws.

All of which could get messy, sure, but it's hardly the gutters-running-red-with-the-blood-of-the-aristocracy.

The interesting question is, why has Microsoft gone out of its way to declare itself incompetent to serve European data storage?

Simple answer: it doesn't want the business. Much better for Microsoft if people don't store data in clouds, but instead spend tens of thousands of dollars on licenses for SQL Server, and training on how to administer it. That's where the profit is.

Of course, in poisoning its own cloud, MS has also poisoned Google's - and every other US company, for that matter, but Google is the one it cares about. And to Google, the cloud isn't a low-margin fringe activity - it's a whole business model.

So what does Google have to say on this story? Not a word, as far as I can tell. Google is just waiting for the whole thing to blow over.

I wonder if a European, at this point, can take out an injunction to prevent companies she does business with from storing their data outside European jurisdiction? Seems to me that the prospect of a jail term for contempt of court would give CEOs more pause than the distant threat of a corporate fine.

Just something for you Europeans to mull over.

You've got to hand it to the Germans...

... they print a mean Christmas card.

Merry Christmas, everybody. (I'm aware that not all of you celebrate Christmas. But I've never understood why that should stop you from having a few good days.)