Gunpowder, Treason and Plot. Or should it be Hope, Expectation and Faith?
The fifth of November is remembered in the United Kingdom primarily for a Catholic plot to blow up the newly installed Anglo-Scottish King James VI (or I depending on your allegiance) and his entire parliament. 406 years later and we still seem to have people threatening to do something similar, although for different religious excuses this time around. However, you feel the attitude of distrust and anger in certain quarters towards all our leaders is because of a general lack of belief in their capabilities and real effectiveness.
This notorious date is also remembered by Jacobites as the day of Treason when the Glorious Revolution took place and the Dutch King William with his wife Queen Mary (daughter of James VII or II depending on.... etc.) were invited to overthrow the Catholic King James VII and bring in a Protestant monarchy. In return for William's plundering of British reserves to finance his wars against the French, we had introduced a Bill of Rights which, to many, is the nearest thing we have had to a written constitution.
For this 5th of November I hope we don't see any revolutionary unpleasantness, which would only ruin my Sunday lunch. However the simmering anger throughout Europe at the apparent ineptitudes of the politicians may well mean that extremists on either wing could gain more support. Of course, much will depend upon the success, or otherwise, of last Wednesday's Eurozone agreement.
It is probably too early to tell whether the warning words of Chancellor Merkel will have the right effect of chiding the nations' leaders into effective action. What we can see is a plan to address at least the symptoms of the problem, if not as yet the underlying causes of the sickness. As far as I can see the plan is based on Hope, Expectation and Faith. Hope that the investment markets will believe in them and give them a chance to operate. Expectation that the banks will carry out the necessary provisioning and write-offs - not just for Greece but elsewhere. And finally Faith (defined as belief without proof) that national governments will actually carry out what they have committed to do in order to engender confidence in both their finances and their economies.
My plea, though, would be to not sit back and look at what has been agreed so far but rather to use this as a springboard for action to address the core issues of the Euro in order to make it into a viable and successful currency - which it is quite capable of being (after all it is the world's second largest reserve currency, so somebody loves it somewhere!). That does mean enforcing the disciplines of Maastricht, and realising that moving towards tax harmonisation and wealth transference from richer to poorer areas is always part of a single currency - whether nationally within, say, France or the UK, or on a Eurozone-wide basis.
Perhaps, though, this is a time to remember that the Euro is much more a political structure designed to bind nations together and to avoid the repetitive horrors of European wars. Over the top? I think Mrs Merkel was right to raise the spectre of failure and its potentially dire consequences. The Euro may have its failings (and failures) but these can be addressed. Remember that America went through a bloody civil war to attain a single currency. We have a generation of us in Europe who have never known such a conflagration and perhaps we should recall, before we so easily cast aside the entire structure, the thousands of tombstones that stand as a testament to previous European political failures.
There is, though, one key obstacle - the attitude of the politicians who are often very happy to think regionally but not act nationally. Democracy is a difficult beast to manage in unpopular times and with unpalatable policies. I think this was best summed up by Jean-Claude Juncker, when he said "We all know what to do, but we don't know how to get re-elected once we have done it."
Now is the time for statesmen and not populist politicians. Any candidates?
This is a symptom I fear that is creeping around many politicians and possibly in the UK as well, where I feel that policies seem to be being considered not necessarily for the betterment of the nation, but rather as to whether such a decision will affect their ability to get the politicians re-elected. This selfish and self-serving political attitude has not been uncommon, especially as parliaments grow old and tired, but I suspect coalition government makes ministers more nervous about their careers. Another statesman needed here too, please.
When thinking about the Euro crisis and the capabilities of our politicians, a quote from Albert Einstein comes to mind, "Only two things are infinite, the universe and human stupidity, and I am not sure about the former". How wise.
What a pleasure to get to Dumfries and Galloway and to talk to their Chambers of Commerce in front of a very energetic and lively audience of over 200. This area is often quite literally bypassed as people rush over the border and forget to turn left after Carlisle. How encouraging then to find a vibrant business grouping in what is often seen as a backwater. Agriculture focused on very successful exports of especially meats and scallops, but also engineering businesses appearing in seemingly the most unlikely of spots.
The story here is a similar one. Is business brilliant? No, but businesses are surviving quite well so long as they are clear of any dependence on the banks. They just wish there was some tangible sign of government focus on growth, not just warm words, and a greater ability to allow people to have some confidence in the future for consumers to spend and companies to invest.
One interesting idea that came from the local authority was that they should be allowed to use part of their significant pension funds for investing in social housing, for which they have a demand and therefore and a guaranteed income. It would get money spent, increase employment, satisfy a social demand and provide a good return for the pension. Why can't they? The old measures were brought in after the Maxwell and Mirror pension fiasco. Time for some reform here I think.
And finally............. New York City authorities said they will shut down a city bus service run by Orthodox Jews if the group doesn't stop making women sit at the back of the bus.
The Private Transportation Corp, which operates the city's public B110 bus under a franchise arrangement, has come under criticism following publicity about its practice of making women give up their seats in the front to promote Hasidic customs of gender separation.
The B110 bus runs through the sections of the borough of Brooklyn that are heavily populated by Orthodox Jews. A student reporter at Columbia University in New York published a story about a woman told by other riders to give up her seat in the front. Other news organizations then sent reporters who encountered similar situations.
Mayor Michael Bloomberg told a news conference on Wednesday that gender separation is "obviously not permitted" on public buses. The Department of Transport said the public bus has been franchised to Private Transportation Corp since 1973 and is not subsidized by city money. No exemptions have been granted to the company to comply with the city's anti-discrimination standards, it said.
Meanwhile, back in London - gender separation? No, I want soap separation. Those who appear to be using the age of austerity as an excuse to be somewhat soap averse can go on the upper deck - preferably on an open top bus, and those with cleaner habits can join me - either male or female - sitting and smelling sweetly together.
Have a good week.
Justin A. Urquhart Stewart Director Seven Investment Management Limited
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