Posted on Sep 29, 2022
This week will go down in history as a key turning point. The questions that disparate events have raised are varied but more or less equally serious. Will it mark the beginning of World War Three or will it be the point at which the democratic West backs down, defeated by a tyrant?
The start of a World War pivots on the response of NATO - especially its leading member the United States. Not forgetting of course that the United Kingdom is second to America. That Russian President Putin will annex four parts of Ukraine as Russian territory is, at the time of writing, a given. How the West will react requires a deeply complicated analysis of the international situation.
The threat of a real war far from strengthening democratic unity has, since the invasion of Ukraine, been contributing to the apparent breakdown of democracy. As Putin was announcing the annexation of those regions of Ukraine that allegedly voted to be part of Russia government officials of 190 countries were preparing to vote in Bucharest on what was described in one Brussels based report is “a fight for the future of the Internet”.
The vote on who is to run the UN’s telecom agency dealing with global standards for telecom and technical infrastructure and setting Internet rules. The issue, it is said to be between the Internet being “a powerful tool for censorship and to crack down on dissent” or preserving the Internet as it is today. The vote was expected to favour U.S. candidate Doreen Bogdan-Martin but with a strong possibility that it might favour Russia’s Rashid Ismailov.
Italy a major European power this week elected far right Georgia Meloni as president. Perhaps the most significant point is that governments in Italy don’t necessarily last too long and that her coalition has at least one senior politician from another party that is “friendly to Putin”.
Academic writers have this week been saying, in the words of one, “The far right is sweeping across Europe”. The collapse of democratic values in Europe is certainly not a new phenomenon but more importantly what is going on these days is based on the electorates almost total inability to judge or assess the realities.
The United Kingdom has historically been a pillar supporting democracy in Europe. Right now it has a Prime Minister who after 24 days in office is being rubbished in the media that is orchestrating demands that “she should go”.
It is barely worth trying to assess whether Prime Minister Truss and her Chancellor Kwai Karteng really are the idiots the media is claiming or do they have a sound strategy that is victim of vested interests.
What should be borne in mind is that the alleged reason for reducing Corporation Tax to 19% and other business benefits is that, for example, corporate tax in Ireland has a long standing corporate tax rate of 12.5 percent. Huge corporations that operate in the U.K. are based in the Republic. The EU has a long standing issue about tax havens. Luxembourg hosts large corporations that operate in the U.K., France, before BREXIT, wrote to British Companies offering a period of some eight years free of Corporation Tax if they moved to Paris. Much the same applies to Frankfurt. A British businessman - before BREXIT - was interviewed by the BBC about moving his firm from the City of London to Frankfurt. In an astonishing aside from outlining the benefits of doing so he remarked: “Of course we shall still base the company in the Netherlands for tax reasons”.
Prime Minister Truss has been attacked from the moment she was elected Prime Minister in what to an old fashioned journalist are unacceptable ways. The situation mirrors the media attacks on Boris Johnson and successive Prime Ministers before him. Newspapers and the media, especially the state run broadcaster the BBC are undermining democracy.
Although it may be well off beam one can reasonably theorise, for example, that Liz Truss is taking on the E.U. and low tax countries around the world to put the U.K. in a position to compete and that the market reaction is hostile because of that. Perhaps, just perhaps, corporate interests around the globe, including Russia and China, are behind the run on the pound because key players just might move back, especially to the City of London?
Certainly New York cannot be happy about a U.K. government that wants to raise the stakes and compete with its market dominance. However, all that may well be in the past as of Putin’s announcement about annexation.
If we survive what may come next we might see Liz Truss proved right. If not money markets may not matter. On a more positive note let’s hope that is not the case and that Europe in particular can find a more unified approach. Such is well overdue.
........... Dateline: The Corner Cafe, Deal, Kent ................
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