The Great Debate UK

from Anatole Kaletsky:

Why breaking up Britain could tear apart the EU, too

A bunch of 'Yes' balloons are seen as Scotland's First Minister Alex Salmond campaigns in Edinburgh, Scotland

While recent opinion polls have swung slightly back toward the "no" camp, there remains a distinct possibility that Thursday's Scottish referendum will trigger a previously unthinkable breakup of Britain.

If this were to happen, the biggest risks for global businesses and investors do not lie in the economic problems created by Scotland’s choice of currency or the inevitable arguments about sharing North Sea oil revenue and the British national debt. These are crucial challenges for Scotland and have been much discussed in financial institutions and think tanks. But the crucial issue for the world economy and financial markets is about the resulting impact on the European Union -- and especially on Britain, which would remain the world’s sixth largest economy even if Scotland departs.

These political risks, which I discussed here last week, can be broken down into four questions: What would Scottish independence, if it happens, mean for British politics and economic management over the nine months, until the May 2015 general election? What effect would it have on the election results? How would all this turmoil affect Britain’s fraught relationship with Europe? Would Scottish independence act as an inspiration for secessionist movements in other European countries?

Britain's Prime Minister David Cameron speaks during a visit to the Scottish Widows building in Edinburgh, ScotlandThe answers to all four questions promise to be more destabilizing than almost anyone would have predicted a month ago.

from Anatole Kaletsky:

How EU politics pushed Merkel to lift Germany’s austerity policies

German Chancellor Merkel and Luxembourg's Prime Minister Juncker hold a joint news conference after a meeting in Luxembourg

Matteo Renzi, the prime minister of Italy who took the revolving presidency of the European Union this week, seems to be the sort of man that Napoleon was referring to when he reputedly said that the key qualification he sought in recruiting a general was good luck.

Renzi become prime minister without even needing to win an election because Silvio Berlusconi and all other rivals self-destructed. He took power just after Italy passed the lowest ebb of its economic fortunes. In May, he was rewarded for his good fortune by Italy’s voters, who anointed him with a strong democratic mandate in the same European elections that discredited almost all Europe’s other national leaders. Now he is taking the helm in Europe, as an economic recovery is starting and the European Central Bank is swinging decisively in support of growth.

from Nicholas Wapshott:

Fighting for the future of conservativism

Britain's Prime Minister David Cameron delivers a speech to placard waving Conservatives during an European election campaign rally at a science park in Bristol

Establishment Republicans have been delighted by the victory of Thom Tillis, their favored candidate in last week’s North Carolina primary. After expensive advertising campaigns by establishment bagmen like the U.S. Chamber of Commerce and Karl Rove’s American Crossroads, mainstream conservatives believe they have a candidate who can beat Democrat Kay Hagan to win a valuable Senate seat in November.

Some commentators see Tillis’s triumph as a sign that other impending GOP primary races will also deliver electable candidates. Having watched the Senate slip from Republican grasp in 2012, as Tea Party candidates such as Todd Akin in Missouri, Christine O’Donnell in Delaware and Richard Mourdock in Indiana depicted the party as too extreme, they say the Tea Party is in retreat.

from John Lloyd:

The UK’s paradox of faith

When David Cameron recently proclaimed in the Church Times -- the organ of the Church of England -- that he was a Christian, that his faith helped guide him through life and work and that Britain is a Christian country and should be proud of it, he was met with a wall of disapproval.

When a European leader says he's a Christian and that he lives in a Christian country, he's asking for trouble. The approved political position in Europe is that religion should be commended for its sterling values when it cares for the poor and condemned when it is used as a rationale for terrorism. Otherwise, politicians should steer clear and leave it to the clergy.

from John Lloyd:

On Syria, England defects

Thursday’s British House of Commons vote against Britain aiding in a Syrian intervention led me to center on one question: what will happen to the U.S.-UK relationship? Is that alliance now gravely weakened? Can it survive in a meaningful form?

Specifically, will Britain ever again be able to partner with the United States in any future military interventions? Without Britain, the United States will certainly carry on. It has a new best friend in France -- french fries top of the menu now! -- and maybe Turkey will be willing, too. In the UK, Prime Minister Cameron says Britain will remain committed to mobilising opposition to the Assad regime, delivering humanitarian aid, and deploring the use of chemical weapons.

from Hugo Dixon:

Cameron, UK hurt by Syria vote fiasco

Rarely has a UK prime minister done so much damage to himself in a single week as David Cameron has with his mishandling of a vote authorising military action against Syria. Cameron may cling onto power after his stunning parliamentary defeat on Thursday night, but he will cut a diminished figure on the domestic and international stage. In the process, he has also damaged Britain’s influence.

Cameron’s litany of errors began with his decision to recall parliament from its summer holidays in order to give the green light to British participation in a military strike designed to punish Bashar al-Assad’s murderous regime for its alleged use of chemical weapons against its people last week. The decision to get parliament’s approval was right, even if not constitutionally necessary. The mistake was to rush things before all the evidence of Assad’s culpability had been gathered and published. In France, which is also contemplating military action, the parliamentary debate is scheduled for next week.

from Nicholas Wapshott:

David Cameron takes on the tax havens

There is nothing more likely to spark anger than an unfair tax regime. The American Revolution was founded on it. So the discovery that some of the largest and most successful companies in the world -- among them Google, Apple, Amazon and Starbucks -- have legally minimized the tax they pay, sometimes to as low as zero, in many nations in which they earn the lion’s share of their revenue is causing considerable irritation.

The result was evident at the G8 meeting in Northern Ireland, where Britain’s conservative government, chairing the conference of the world’s richest nations, put making corporation tax fairer at the top of its agenda, after the civil war in Syria. David Cameron, who like most conservatives believes in low taxes, is in a bind.

from Anatole Kaletsky:

When illogical policy seems to work

It’s cynical, manipulative and hypocritical – and it looks like it is going to work. How often do you hear a sentence like this, to describe a government initiative or economic policy?  Not often enough.

The media and a surprisingly high proportion of business leaders, financiers and economic analysts seem to believe that policies which are dishonest, intellectually inconsistent or obviously self-interested in their motivation are ipso facto doomed to fail or to damage the public interest. But this is manifestly untrue. The effectiveness of public policies and their ultimate desirability is in practice judged not by their motivations, but by their results.

from The Great Debate:

For Russia, Syria is not in the Middle East

Russian President Vladimir Putin meets with (clockwise, starting in top left.) U.S. Secretary of State John Kerry, British Prime Minister David Cameron, next Israeli Prime Minister Benjamin Netanyahu and U.N. Secretary-General Ban Ki-moon. REUTERS/FILES

A string of leaders and senior emissaries, seeking to prevent further escalation of the Syria crisis, has headed to Moscow recently to meet with Russian President Vladimir Putin. First, U.S. Secretary of State John Kerry, then British Prime Minister David Cameron, next Israeli Prime Minister Benjamin Netanyahu and now, most recently, U.N. Secretary-General Ban Ki-moon These leaders see Russia as the key to resolving the Syria quandary.

from John Lloyd:

England’s inevitable gay union

Earlier this week the British Parliament housed a restrained, sometimes mawkish and at times moving debate on gay marriage – and the bill passed the House of Commons, 400 to 175. The story was not that it passed, which had been expected. Instead, it was the split in the major governing party, the Conservatives, more of whose 303 MPs voted against the bill than for it. (Conservatives voted 136 in favor of the bill, with 127 voting no, five abstentions and 35 not registering a vote.) Prime Minister David Cameron, still intent on ensuring that his party is liberal as well as conservative, was emollient and understanding of those against the measure but presented his support in the context of a “strong belief in marriage. … It’s about equality but also about making our society stronger.”

His remarks signal that while there is division on the right over gay marriage – at least in Europe –and that while prejudice and bigotry still exist, the serious debate is between contending notions of conservatism. For liberals like Cameron and many in his party, gay marriage extends the benediction of an ancient rite upon modern couples, drawing them into the rituals of homebuilding and long-term affection that have so far been claimed as a heterosexual monopoly. For opponents, marriage must be just such a monopoly, since it is a union of one man and one woman for the purpose (if not always the practice) of procreation, of continuing society’s values in particular and the human race in general.

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