He knew too much

Brussels diary by Manneken Pis commented on Denis MacShane´s sacking in the post-election reshuffle, under the heading 'Goodbye Denis, you knew too much'

To tell the truth, he was never really suited to the job, since he was far too interested in the subject and spoke too many European languages.

So now we know. Prospect magazine, by the way, curiously offers free access online to last month´s edition.

Update (1 Jul): Jonathan Heawood responds to some of the points made by Denis MacShane in an essay in the Financial Times magazine a few weeks ago: 

Obviously, no one told McEwan that, along with his advance, came the commitment to produce a fair portrayal of the government's achievements in office, or of the prime minister's infallibility.

socialism of imbeciles

'l'antisémitisme est le socialisme des imbéciles' ([Jean] Jaurès according to Antoine Vitkine (P235) or maybe August Bebel) .

More comments here. a propos the outcome of the Iranian election.

Update (30 June): John Simpson recognises a familiar face,  via Open Democracy.

Identity and Community

Caroline Moorehead in 'Speak no evil' (FT Magazine, 18 Jun) seems to confirm that Bernard Kouchner is Jewish - he 'had lost members of his family in the holocaust'. A trivial point, but answering the question I asked myself here. The article is a very interesting one about the Red Cross, but it's subscribers only.

Round 2

Just a quickie, without any links. The 24th of June 2005 could go down as a major turning point - if the hard-line conservative mayor of Tehran is elected President today, whether through fiddling of the ballot, or general indifference on the part of the voters. The reformist, Mostafa Moin, came fifth in the first round. Rafsanjani is now the reformist (!) Polls are said to be neck-and-neck.

Update (25 June ) : Mahmoud Ahmedinejad , 65%. Picture: NY Times.


(28 June ) : comments here.

ungoogled

As I said before, I was making the word up, but that doesn't mean no-one has used it before. A search, using Google (what else?), gives 174 hits. I'm number 40.

The original search ("Menace of the dream machine" "Peter Aspden") now gives 3 results: the FT site, BD's and mine.
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Talking about BD, I have commented here about the NOFOLLOW option (in the <A>HREF=...</A> construct). After being held for a few days, it was eventually allowed through. I thought it was rather good.

Blogging under pressure

Libération reported 21 June that the blogger Christophe Grébert, is being prosecuted for defamation by the town council of Puteaux. Having been banned from council meetings, bizarrely he was denounced by the leader of a counter-demonstration, UMP deputy Joëlle Ceccaldi, for «totalitarisme».

In March, 8 students were expelled for having criticised their lecturers on their blogs.

dumping

The opposition to reform of  the CAP is not as entrenched in France as we (British) tend to think. This morning I heard two outspoken critics of (ultra-) liberalism, that is, people on the 'no' to the referendum left.

Jacques Nikonoff, President of ATTAC-France, (France Inter, QUESTION DIRECTE, 23 Jun) said that reform of the CAP is necessary, though European agriculture must still be protected.  José Bové (BBC, World Today, 23 Jun - sorry, page linked is not current - it was after 6:30 GMT) said it was unacceptable that it led to dumping - surpluses being sold on world markets at below the price of production - to the detriment of developing countries.  

"food sovereignty." It means that each population should be able to eat from its own agriculture. The main issue for the farmers is to feed the population where they live: their own families, the local market, and then the national market. (link)

For how EU policies currently lead to dumping of sugar, see here and here.

There are clear signs that the Christian Democrats in Germany could be positioning themselves close to Tony Blair (Libération).  Following the failure of the EU summit, Angela Merkel was careful not to place any blame on Mr Blair. In the pro-CDU popular daily Bild, the British leader wrote about the cows that cost '2 euros per day'.

depuis l'échec du référendum français sur la Constitution européenne le couple Chirac-Schröder est moribond. Et même les plus francophiles des chrétiens-démocrates n'ont pas de mots assez durs envers Chirac, le représentant d'«un modèle totalement dépassé».

Mind you, simplification fiscale is not exactly how most people in Britain would see Labour's tax changes.

Update: full text of Tony Blair's speech to the European Parliament. Key para, from a quick scan

Fourth, and here I tread carefully, get a macroeconomic framework for Europe that is disciplined but also flexible. It is not for me to comment on the Eurozone. I just say this: if we agreed real progress on economic reform, if we demonstrated real seriousness on structural change, then people would perceive reform of macro policy as sensible and rational, not a product of fiscal laxity but of commonsense. And we need such reform urgently if Europe is to grow.

...

Anniversary

No, not that of Jean-Paul Sartre, who would have been 100 today, but the 70th anniversary of the International Congress of Writers for the Defence of Culture, which opened at the Mutualité in Paris on 21 June 1935. Well, that seems like a good excuse to write about it; in fact, it's something that was on Radio 3, months ago. Much of the material in repeated in this article in The Observer.

E.M. Forster put forward the classic pacifist position that if nations persisted in building up massive stocks of weapons, they could no more be prevented from engaging in war, than a beast that gorges itself on food could be prevented from excreting... He rather lost the audience by talking about the ban on a novel called 'Boy' by James Hanley, which had not even been translated into French, though it was republished in Paris, chez un éditeur spécialisé dans les rejetés du puritanisme britannique and was translated in 2003.

Gustav Regler (link in French) charged the Soviet Union with allowing Hitler to rise undisturbed. An exiled Italian historian cited the case of Victor Serge, a writer imprisoned in the Soviet Union.

Maxim Gorky was supposed to attend, but didn't. Boris Pasternak was a last minute replacement - he was not very keen on going, but  he was told it was an order. Accounts varied as to what he said - delegates couldn't even agree on what he was wearing. 

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OK, some Sartre then. Another Sunday Feature from Radio 3. There you could have heard the jazz song ´Some of these days´, that was featured in La Nausée. Shame it´s not on ´listen again´or podcast.

Three things

Akbar Hashemi Rafsanjani interview on BBC Newsnight, Wednesday. I heard some of this on World Service radio.

"It's possible that at times Iran has not reported its activities. But from the time Iran decided to make such reports, it has made everything transparent." (Agencies)

Asked whether the US was still the 'great Satan' and Britain the 'little Satan', he said that if they change their behaviour, they are no longer Satans. He mentioned three things: 'The US had lifted obstacles to Tehran's entry into the World Trade Organization, had given consent to carry out limited enrichment of uranium and had agreed to sell it plane parts.' (BBC website) These were only small things, of course, but they might be a beginning.

When Mr Rafsanjani says 'we've done this, we've come clean now', it calls to mind a Carnegie report of a couple of years ago, which stated that although he had no official position, he was probably still a major influence in determining Iran's nuclear strategy.

Mr Rafsanjani is said to be the front-runner in today's elections for president, but the reformist, Mostafa Moin, seems to have made a late surge in the opinion polls.

There is no sign of the US softening its rhetoric.

It has been a good week for Newsnight: I recorded Tuesday's interview with Donald Rumsfeld. One quote from the website, on Iraq: "A lot of bad things that could have happened have not happened."

Update: See also Greg's post here, on Iran.

The wreckage (Part 2)

Timothy Garton Ash in What is to be done (His pre-referendum piece was published in both The Guardian and Le Monde; again, the last time this happened to my knowledge was on the occasion of the US election.) :

There are formal, political and democratic arguments for this otherwise slightly surreal commitment to go on riding a dead horse. The formal one is that the treaty provides for everyone to go ahead and ratify. If 20 out of the 25 member states have done so, but up to five have not, it then goes back to EU leaders next autumn, and the European council must decide how to proceed. The political one is that we don't want a Europe where all countries are equal but some are more equal than others. If Denmark says no, that's a problem for Denmark, but if France says no, that's a problem for Europe. Small countries must have their say as well.

He is rather less kind to Dominique de Villepin than I was, describing his choice as prime minister as 'disastrous'.

In the German elections this autumn, the Christian Democrats' Angela Merkel is likely to win. If de Villepin fails, Chirac may finally be compelled to call on his arch-rival Nicolas Sarkozy. Sarkozy gave a fascinating response to the referendum result in which, while speaking the language of social Europe, he effectively called for radical reform. "We must," he said, "give to our social model the reality which it has lost."

Compare 'Faut-il considérer, avec Nicolas Sarkozy, que la victoire du non impose des réformes "vigoureuses", que l'on ne pourra sauver le "modèle social" français [qu']en le réformant en profondeur ?' (J-M Colombani). Garton Ash continues, 'Blair's objective should be that, under next year's Austrian presidency, the EU comes up with proposals which bear a strong resemblance, in substance though not in rhetoric, to his own.' The only problem with this is that 2 years is not much time for de Villepin to fail in. Sarkozy, though,  is looking a reasonable bet for President in 2007. Francois Hollande seems to be somewhat lacking in charisma and the the chances are that Lionel Jospin will come out of retirement to be main candidate on the Left (again).
 
Going back to the attitude of the US neo-conservatives, much of this may have been based on ignorance. Emmanuel again:

Evidemment, on peut quand même se poser des questions sur le sens tactique de la faction conservatrice. S'ils avaient ne serait-ce qu'une once de connaissance de l'état de l'opinion européenne en général, et de l'opinion française en particulier, ils auraient dû pousser de toutes les forces pour que Bush soutienne la constitution, et le plus clairement possible.

Quite. The term 'neo-conservatives' is much misused, anyway, people forgetting that it covers a wide spectrum of opinion. (Some like Michael Ledeen, after all, opposed the Iraq war, seeing Iran as the bigger enemy, whereas the actual policy followed always implied some sort of accommodation with Iran.) Paul Wolfowitz (see here), for one, has always been clear-thinking in favour of Turkey joining the EU (and Ukraine having the prospect?).

Sur le plan politique, le seul objectif, c'est un nouvel élargissement. La Roumanie et la Bulgarie sont dans les tuyaux, ça devrait passer. Mais après, c'est la Turquie, l'Ukraine, les Balkans. Là franchement, je vois mal comment un référendum français pourrait le permettre", pointe [Yves] Mény. ("La construction européenne dans une crise sans précédent", Le Figaro, mardi 31 mai 2005 - DSK, Jan | mai 31, 2005 04:04 PM )

Jack Straw, interviewed on the BBC, said he had managed to keep some references to Turkey in the communiqué that the EU Foreign Ministers issued, Monday, in spite of  some states not wanting to mention Turkey at all, mindful that it had been a factor, if not the largest, in rejections of the constitution.

Finally, SIAW warned, 'The European left may then find, too late, that putting up with the EU would have been preferable to witnessing, again from the sidelines, the unfolding of lethal competition between two nuclear-armed superpowers...'  By the way, I am mentioned (but not linked to) by them here, I've just found out.

The wreckage (Part 1)

I'm going to look again at some of the issues taking shape, as people ponder the fallout from the two rejections of the EU constitution. I hope this doesn't become too meandering, but there's really such a stack of things to think about: the economic stagnation, the identity of the Left, further enlargement, the Common Agricultural Policy versus the British rebate.

While the BBC has concentrated pretty much on the British rebate, I started by looking at Dominique Strauss-Kahn's weblog, picking out  this. I didn't read all the masses of comments, but there were some interesting press articles posted. 

In L'impasse, J-M Colombani wheels himself out for another named editorial (the last time was on the occasion of Bush's re-election in November): 'L'Europe est une construction fragile, dont on va peut-être s'apercevoir – mais trop tard – qu'elle est réversible, alors même qu'une part des partisans du non – les plus jeunes – la considère comme un acquis.'  Leaving aside the 'Polish plumber', the threat is also portrayed as being from the South:

Le président d'Attac, organisation qui a milité intensivement pour le non, a présenté, dans ces colonnes, l'Espagne, le Portugal et la Grèce comme un groupe de pays "sous perfusion permanente de fonds européens" et qui, pour cette raison "acceptent toutes les directives qui passent dans la crainte de perdre leurs financements". A de tels propos, on mesure la ferveur européenne et internationaliste des tenants du non "de gauche".
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Quoi qu'ils en disent, en effet, les anti-européens de gauche n'ont pas seulement additionné leurs voix avec celles de Jean-Marie Le Pen et Philippe de Villiers. Ils ont mêlé leurs voix. Et certains arguments ont circulé, de la droite nationaliste à la gauche radicale. La gauche française court donc le risque d'être paralysée par cette "fracture européenne" comme elle l'a été, dans les années 1950 à 1980, par la question soviétique. Ou comme la gauche britannique quand il s'est trouvé une majorité, au Parti travailliste, pour porter à sa tête l'anti-européen et neutraliste Michael Foot, en 1980. Le Labour a mis dix-sept ans à retrouver le chemin du pouvoir sous la direction de Tony Blair.

For Germany, the parallels with Britain in 1979 are possibly even more relevant.

In Libération ("Game, set and match", DSK Jan | juin 1, 2005 02:22 PM), Alain Duhamel describes the illusory nature of the victory of the Left's 'non' camp:

Sans s'en rendre compte un instant, les champions du non de gauche ont, en refusant des progrès limités qu'ils prenaient pour une régression, marqué contre leur camp et fait le jeu de leurs adversaires les plus acharnés, c'est-à-dire des authentiques libéraux. Ils auront été des apprentis sorciers.

Le traité constitutionnel entérinait l'économie sociale de marché. Il est parfaitement légitime de ne pas s'en satisfaire, d'aspirer à un autre modèle de société et à un autre système économique. Il est paradoxal de la récuser au bénéfice d'une logique libérale combattue par le camp du non social. Or c'est exactement ce qui se produit maintenant. La Constitution européenne comportait, dans sa partie II, une charte des droits fondamentaux que l'immense majorité des syndicats et la totalité des partis socialistes d'Europe avaient considérée comme un net progrès. Elle devient caduque. La partie III reprenait l'ensemble des traités existants et notamment les politiques économiques d'inspiration libérale : c'est la seule partie de la Constitution qui continue à s'appliquer. ...la presse Murdoch, hystériquement antieuropéenne, dogmatiquement ultralibérale, passionnément francophobe, pavoise et applaudit à tout rompre. Le non social tricolore constitue une divine surprise pour les eurosceptiques britanniques et les néoconservateurs américains. Les premiers vilipendaient un traité constitutionnel à leurs yeux typiquement social-démocrate, les seconds (notamment la «droite religieuse américaine») s'offusquaient des valeurs de tolérance et de solidarité contenues dans la charte sociale. Pour une fois, les uns et les autres s'écrient «vive la France».

Emmanuel, of Ceteris Paribus, has some excellent posts at Publius. Here (in Part1), for example, he explodes the claim from the 'No' camp that the Bank of England is not independent. More importantly, he disputes the assertions that the objectives of the European Central Bank are especially restrictive (bearing down on inflation, at the expense of growth). Furthermore, he points out that in practice inflation in the Eurozone has fluctuated around 2 to 2.5%. Maybe, in spite of what Anatole Kaletsky said (the Murdoch press being deliberately unhelpful?), we are back to 'structural reforms', after all. 

No comment?

Paul Anderson, according to Chris Brooke,  complained

"Jeez! I've been looking for Brit blog comment on the French vote all day and there's sweet FA from the Brit left blogs."

...

Guardian of us all

Craig Murray, whose article I linked to here, is a bit of a whinger, but he's always worth listening to. More Guardian-style whingeing can be found here, from George Monbiot. His father, Raymond, has also been  in the news recently - I won't hold his parentage against him. 

Similar from Nick Paton Walsh - 'The lie about liberty'. At least this reminds us of some of the things going on in Central Asia and the Caucasus:

The events in Georgia, Ukraine and Kyrgyzstan had sent shivers through the body politic of both countries, causing the Kazakh president, Nursultan Nazarbayev, to ban protests during election time, to shut opposition papers and to let his police beat youth protesters wearing orange, the colour of Ukraine's revolution. In a coup de grace for both irony and free speech in the country, yesterday an opposition figure went on trial for slander after he accused Mr Nazarbayev's daughter, Dariga, of illegally creating a media monopoly, allegations she denies.

On the other side of the Caspian, Azerbaijan's president, Ilham Aliev - his father's dynastic successor - regularly sends in riot troops to batter protesters. [..] Mr Aliev felt comfortable enough in his relationship with Washington to ban a demonstration planned for the previous Saturday - protesting for free parliamentary elections this November - so as not to spoil the atmosphere for Wednesday's ceremony [the opening of the Baku-Tbilisi-Ceyhan (BTC) pipeline]. When the protest went ahead all the same, he sent in the riot police, who hit some demonstrators with truncheons and made 100 arrests.

The Norwegian ambassador to Baku, Steinar Gil, whose vociferous criticism of human-rights abuses, despite his country's strategic investment in the BTC, is fast turning him into an Azerbaijani Craig Murray, was a lone voice among diplomats when he condemned the Aliev regime's "crude violence". The US embassy said it "regretted" that the right to assemble freely had been violated.

After Andijan, in the former Soviet Union at least, a state that shoots dead hundreds of peaceful protesters can no longer expect to become an international pariah. Its lesson will be apparent by the end of the year. When the protesters gather in November in Baku and in December in Almaty, Mr Aliev and Mr Nazarbayev could only better their Uzbek counterpart's performance by digging the mass graves before their troops take aim.

Finally, from Martin Kettle (I thought he'd retired), some sense on Europe:

The leftwing part of the no coalition should not be allowed to ignore or play down the presence of the rightwing part of their alliance. For what is striking is not the difference between the left and the right, but the identity. For right and left alike, the no vote was a vote in favour of France for the French. In this campaign, protectionism and anti-immigrant feeling were consenting bedfellows.

[..] there is a very real prospect [..] that Chirac will again draw all the wrong lessons. He could declare Sunday's no vote to be a vote against globalisation and reform that requires a "core" group of EU nations (led, inevitably, by France) to pull up the drawbridge to protect the French social and political model - a kind of ex post facto vote against enlargement. Polish plumbers, British politicians and Turkish and other Muslims will not be wanted on this voyage. But there is a danger that some weak political leaders in some other founding nations of the EU could be induced to go along with it.

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Big money

(Update:  Edward Lampert of ESL Investments, the hedge fund manager who was behind the Kmart-Smears merger, took home $1.02bn last year (Financial Times, 28 May).) Last month Institutional Investor's Alpha magazine reported that the average pay for the top 25 hedge-fund managers was $251 million in 2004. Clifford Asness, by contrast, made a mere $50 million in 2003.

The man generally credited with coming up with the first [hedge fund] was a former Fortune magazine writer named Alfred Winslow Jones, who hung out his shingle in 1949 with $100,000 in capital and a new idea about making money in the market. He wanted to invest aggressively while still trying to protect investors' capital. These would seem to be contradictory goals, but here's how he went about it: Instead of simply buying stocks and hoping the wind was at his back, Jones also had a certain percentage of his portfolio on the ''short'' side -- that is, he was betting those stocks would go down. In doing so, he was limiting his fund's exposure the market, or as they say today, he was limiting his ''market risk.'' Since his shorts were likely to make money in a down market, they acted as protection -- a hedge! -- when his ''longs'' weren't doing well. Yet because Jones also borrowed money to buy more shares -- that was the aggressive part of his strategy -- when his stocks went up (as they usually did, for he was a very good stock picker), his returns were much higher than they might otherwise have been, despite having those shorts hedging his portfolio.

Jones was enormously successful; between May 1955 and May 1965, his fund returned 670 percent, according to Fortune magazine, nearly twice as much as the best-performing mutual fund. But Jones was also an innovator in other ways. Because he wanted complete freedom to invest as he pleased -- and didn't want to deal with regulatory restrictions -- he never let more than 100 wealthy investors into any of his funds at any one time; under the rules, this allowed him to avoid registering with the Securities and Exchange Commission, which regulated mutual funds. And he used a fee structure that called for him to get a whopping 20 percent of the profits if he made money. Mutual funds, by contrast, collected fees based on the size of the fund: the more assets under management, the more the fund company made, no matter how well (or poorly) the fund performed.

As hedge funds evolved, Jones's essential structure stuck. Hedge-fund managers made sure their investors were both wealthy and few in number; these days, the rules allow them to have up to 500 ''qualified'' investors and still avoid most S.E.C. regulation. [..] Of course they all adopted performance fees -- usually 20 percent, just like Jones. Hedge funds also became hooked on asset fees, just like their mutual-fund brethren. Today, when a hedge-fund manager says he charges ''2 and 20'' -- and many of them do -- he means he is taking a 2 percent asset fee as well as his 20 percent performance fee.
[..]
What got lost over time was the idea that hedge funds were supposed to hedge.
[..]
In fact, during the bull market, hedge funds became synonymous not with hedging but with the most extreme forms of investment risk-taking. Think for a moment about the hedge-fund giants who captured the public imagination in the 1980's and early 1990's -- George Soros, Julian Robertson, Michael Steinhardt and a handful of others. Those men were all swashbucklers who didn't want to control risk -- they wanted to embrace it.
[..]
Since the end of the bull market, though, the idea of using hedge funds to actually hedge has been making a comeback. Some of the best hedge funds, like Maverick Capital and Lone Pine Capital (the latter is run by the aforementioned Stephen Mandel) use the classic A.W. Jones technique of having a certain percentage of their portfolios on the short side -- betting stocks will go down -- to limit their market risk.
[..]
The computer model [Asness and his team] developed -- and which, after many refinements, they still use today -- grabs a wealth of up-to-the-minute data to identify the cheapest value stocks ( [Eugene Fama and Kenneth French] ), but only value stocks that seemed to have started on an upward swing (Asness). They buy a large block -- about 200 to 300 -- of those stocks. Then the model identifies stocks with the opposite characteristics: growth stocks whose rise is stalling. They sell an equally weighted amount of those stocks short. Unlike A.W. Jones, who had only a percentage of his portfolio on the short side, the Asness portfolio is perfectly balanced between longs and shorts. That is what makes his fund ''market neutral.'' It doesn't matter to him whether the market goes up or down. AQR makes money if its basket of value stocks beats its equally weighted basket of growth stocks -- the way the history suggests it should two-thirds of the time.
[..]
This is not, however, a case in which a big idea eventually filters down to the rest of us. Theoretically, mutual funds could develop market-neutral funds like the one Asness runs; the regulations that limited how much short-selling a mutual fund could engage in were repealed years ago. But the fund industry has historically shied away from shorting stocks.

'The Quantitative, Data-Based, Risk-Massaging Road to Riches', NYT Magazine, 4 Jun (free, if you're quick)

Lying through his teeth

A postscript on the May events in Uzbekistan - Craig Murray's "Brutal Reminder" in the FT Magazine, 28 May (subscribers only ---- link ):

...we had the Uzbek procurator general announcing that 170 people had, after all, been killed [in Andijan] but that they were all armed rebels. I did feel vindicated by the sheer disbelief that greeted this. Here is why.

In March 2004 there was a series of explosions and shootings in Tashkent, in which at least 30 people died. I dashed round to the scene of each incident, arriving within hours or even minutes...

Suicide bombers from the Islamic Movement of Uzbekistan, linked to al-Qaeda, had carried out a series of attacks on security forces. That remains the internationally accepted version of events. But it isn’t true.

I attended the briefings the procurator general (the same man) gave to journalists and diplomats. His claims were completely incompatible with the facts I had observed. He said suicide belts had been used each with the force of two kilos of TNT. But at the sites there just wasn’t the physical damage. Not so much as a cracked paving stone, let alone a crater. The first “bomb” had been in a roughly triangular courtyard a maximum of 30m wide. Allegedly six soldiers and a suicide bomber had been killed. Not a pane of glass was broken in the buildings overlooking the courtyard, not a branch or sprig torn from the tree in the centre.

My reports that the procurator general was lying through his teeth brought me startled reproof from my management in London.

And some actions suggested by HRW (via Eric). For example:

The United States currently uses a rent-free base in Uzbekistan. Talks on a formal, long-term agreement, which would provide the Uzbek government considerably greater financial benefits, should stop until the Uzbek goverment agrres to formal investigations. Since July 2004 the U.S. government has cut most direct government-to-government assistance, including military aid, to Uzbekistan because of the country’s poor human rights record. The remaining U.S. Defense Department counter terrorrism assistance should be suspended is if the units receiving it were found to have participated in gross human rights violations.

The United States should explore alternative basing facilities elsewhere in the region. If the Uzbek government does not accept the proposed investigation, the United States should end its strategic partnership with Uzbekistan and discontinue its military presence in the country.

...

D-Day postponed

So, the French (and the Dutch) have voted. Not good for the D-Day in the war against terror. Just as Mr Blair's local difficulties over Iraq made UK entry into the Euro recede further and further away, so Joschka Fischer's vision (Turkey's joining the EU) seems a distant dream. And if the 'Polish plumber' is such a bogeyman for the French, how much of a welcome is going to be offered to the Ukrainians, Orange Revolution and all?

So, where to from here? Obviously, there were a number of tactical points that proved to be obstacles. The proposed constitution was too long, due to combining substantive changes - on qualified majority voting - with a restatement of principles already incorporated in existing treaties - for example, the references to free and not distorted (faussé) markets, that the French left made such a fuss about. But any attempt to push the changes through regardless would be difficult, since the rejecting votes are above all a signal of the alienation of people from their elites.

Things may look better in 2 or 3 years time, not particularly because Chirac and Schröder could be gone. This will only happen if the general morosity of the French (and others) is overcome, by tackling the economic problems that lie behind it. Maybe I was too pessimistic before about what could be done on monetary policy. Anatole Kaletsky in his piece of 26 May, linked to by both Greg and Harry, argues

European policymakers could kick-start growth and break the spiral of economic and political pessimism by doing exactly what America did in similar circumstances in 2001. They could reduce interest rates drastically and devalue their currency. As in Japan, interest rates could be reduced all the way to zero and the euro could be pushed down through intervention in currency markets. Such an aggressive policy of monetary stimulation could be guaranteed to revive economic growth, whether or not voters could be persuaded to endorse the labour market and pension reforms that Europe certainly needs in the long run but which can actually aggravate economic stagnation in the short term, as Herr Schröder has learnt.
...
If Europe’s leaders want to revive any hope of EU integration, they have one obvious recourse. The first order of business in any revision of the EU constitution must be to change the objectives of the ECB and bring central bankers under the explicit political control that is taken for granted in Britain, America and Japan. Imposing some political discipline on the ECB would not guarantee popular support for EU integration, but it would at least acknowledge to voters that Europe has suffered from a decade of monetary incompetence that now borders on sabotage.

If this happened, the Euro might start to look more attractive to the UK, as well. On the other hand, the ECB is held back by the fact that inflation is high and rising in Italy, as pointed out in a review in The Scotsman (4 June).

Anyway, paradoxically the very patrician de Villepin has replaced the more France d'en bas M Raffarin. But his ideas on economic reform seem to be getting some positive reaction.