As Lola said, it's a mixed-up, muddled-up, shook-up world

The wheel turns:

After a frantic scramble involving complex political negotiations that could bring down Alexis Tsipras, the prime minister, Greece last night submitted proposals for a third, three-year bailout programme to prevent “Grexit”.

There was hope as the Greek government appeared to accept that austerity measures were inevitable in return for loans to save the country from bankruptcy and expulsion from the euro.

Greek opposition politicians, the conservative New Democracy and liberal The River parties, held secret talks yesterday in Brussels as the Greek government prepared to pass controversial legislation on pension cuts and tax increases. Diplomatic sources told The Times that Mr Tsipras appeared ready to pass measures without the support of his government coalition partners, the nationalist Independent Greeks, or left-wingers in his own Syriza party.

Let me see if I have this right.  After months of prevarication, during which the Greek government steadfastly refused to bow to demands of austerity, it held a referendum urging the Greek people to reject the creditors' demands and won by a comfortable majority.  A week later, and contrary to the referendum result, the same Greek government offers to accept austerity.

All this to secure additional loans which it will use to repay previous loans from its creditors, with a possible promise of debt re-structuring sometime in the future.

It makes my head spin ...

 

Quote of the day (2)

From here:

This is what you are not allowed to say in China: the stock market is an equity disaster and the authorities have failed to rescue the market. The phrases “equity disaster” and “rescue the market”, you see, have been banned from market reports.

For official consumption, the Chinese Communist party is merely adopting sensible measures to address a temporary outbreak of irrationality among investors; calm will return any day now.

Yeah, right. Big shareholders have been banned from selling for six months, and trading in almost half the stocks on the Shanghai and Shenzhen stock exchangeshas been suspended, an attempt to air-brush the fact that the real prices would be substantially lower.

"Temporary irrationality"?  Inscrutable ...

Quote of the day

From here:

“The chancellor said today that ‘Britain deserves a pay rise and Britain is getting a pay rise’. Unless, of course, you’re a public servant.”

Or unless you are under 25.

   

On and on and on

This is becoming tedious: deadline after deadline after deadline.  But nothing is ever decided; The Guardian reports the latest final ultimatum:

Greece has 48 hours to strike a new bailout deal with its eurozone creditors or face a banking collapse, a humanitarian emergency, and the start of an exit from the single currency, European leaders decided on Tuesday evening.

Unless Athens presents convincing details entailing more austerity as the basis for its third bailout in five years, all 28 national EU leaders, not just those of the eurozone, are to gather in Brussels on Sunday in emergency session to discuss how to contain the fallout from Greece’s financial collapse.

“We have a Grexit scenario prepared in detail,” said Jean-Claude Juncker, president of the European commission.

Nor does this sort of thing help:

In the run-up to Tuesday evening’s summit called as a result of the Sunday referendum, eurozone leaders demanded that Tsipras present specific proposals. Tsakalotos instead turned up at a meeting of finance ministers with speaking points jotted in pencil from a Brussels hotel notepad. The Greeks then promised a more formal submission by Wednesday.

“[With] the Greek government it is every time ‘mañana’,” said Lithuania’s president, Dalia Grybauskaitė, one of the Greek government’s harshest critics. “It can always be ‘mañana’ every day.”

   

Oh dear ...

Within 5 minutes of opening, the FTSE 100 is down by more than 1%.

There is some consolation: De La Rue (which makes banknotes) is up a couple of points.

 

So farewell Yanis

Did you really resign? Or were you pushed?  No matter, really.

But you brought a little colour to international finance.

And I liked your parting shot - that you will "wear the creditors' loathing with pride".

 

Quote of the day

From The Guardian (here):

... any nation that can arrange a referendum at a week’s notice, conduct it competently, and produce a result before midnight, possesses a degree of civic organisation that many would envy. In the manner of the vote, as much as the result, there has to be hope for Greece.

   

Extract from the Greek finance minister's diary

From here:

Δευτέρα

“Yanis, my friend,” says our Prime Minister, Alexis Tsipras. “How do you think we are handling this crisis?”

“Heroically!” I say.

Alexis agrees. Definitely. Only it doesn’t feel ideal, he adds, that our offices are now dark, and have no air conditioning, and we’re sitting on the floor sharing a packed lunch of stale olives out of Tupperware.

“But the crowds!” I say, gesturing out the window. “See how they cheer us!”

Alexis says they seem a bit angry.

“With the Germans,” I agree.

Alexis says it might actually just be a queue for an ATM.

“Comrade,” I say. “Don’t panic now! Was this not your plan?”

“My plan?” says Alexis. “Hang on. Aren’t you the plan guy?”

“God, no,” I say. “I’ve just been winging it.”

“Well this is embarrassing,” says Alexis.

   

Music of the week

Is nothing sacred?

The Times reports:

It is a notoriously potent brew which has become synonymous with neds and drunken disorder rather than discernment, but Buckfast is getting an upmarket makeover.

Buckie, as the caffeinated tonic wine — which is hugely popular in west central Scotland — is known, has been denounced by senior police officers and politicians.

It is known to its most ardent devotees as “commotion lotion” and “wreck the hoose juice”, and police say it is mentioned in serious crime reports more than any other drink or drug. Now it is to be relaunched as a sophisticated and aspirational tipple.

As part of an ambitious advertising campaign, the fortified wine, which is made by Benedictine monks, will be marketed as a base for cocktails.

The drink’s distributors have also hired a Michelin-starred chef to promote it as the perfect addition to a range of gourmet dishes.

It will never catch on ...

 

Spoilsports

The Times reports:

It has a curiously therapeutic effect on millions, but the satisfaction of popping Bubble Wrap is under threat after the makers of the packaging launched a type with bubbles that do not burst.

The new version is laid out in columns of connected air pockets, so that when it is squeezed the air gets pushed into neighbouring bubbles.

Miserable sods.

Isis, Isil or Daesh?

What's in a name?  The politicians seem vexed about it.  The Spectator sets out the position, for the record:

‘Isis’ is an acronym of Islamic State in Syria. ‘Isil’ – an acronym of Islamic State in the Levant. Isil is the better translation of the group’s Arabic name al-Dawla al-Islamiya fil-Iraq wa al-Sham – where ‘Sham’ represents greater Syria or ‘the Levant’ as we would say in English.

As for ‘Daesh’, it has the small propaganda advantage of reminding Arabic speakers of Daes (‘one who crushes something underfoot’) and Dahes (‘one who sows discord’). But beyond that childish word association it is no help at all, for ‘Daesh’ is just the Arabic abbreviation of al-Dawla al-Islamiya fil-Iraq wa al-Sham – or the Islamic State in Iraq and the Levant.

 

Not so bad

Hey, it could have been a lot worse:

The FTSE 100 fell more than 2% in early trade, and by the close was still down 133.22 points, or 1.97%, at 6,620.48.

As it is, we are merely back to where we were at the beginning of the year, as this graph demonstrates:

Furthermore, the recovery has already begun in Asian markets:

In Japan, the Nikkei 225 share index was up 0.36% at 20,181.55 points.

...

In Australia, the benchmark S&P/ASX 200 was up 0.25% at 5,436.10 after closing down more than 2% on Monday.

In South Korea, the benchmark Kospi was up 0.25% at 2,065.69 after suffering its biggest daily percentage fall since late May on Tuesday.

...

In Hong Kong, the benchmark Hang Seng index was in positive territory however, up 0.54% at 26,100.74.

So, reasons to be cheerful.

   

Quote of the day

From CityAM  (here):

Yes, the Greeks lied about their numbers to get into the Eurozone in the first place; but the creditor states didn’t much care. Yes, Athens should not have borrowed money like a drunken sailor, but German and French banks were more than happy to lend it to them. Yes, Greeks should not get to retire in their 50s with German-sized pensions (and without German productivity), but Greek economic fecklessness is hardly a new phenomenon Brussels was unaware of.

Finally, yes, Tsipras and his even more overrated finance minister Yanis Varoufakis are pathetically hiding behind their people in proposing a plebiscite on the creditor’s terms, rather than leading as statesmen ought to do. But the long commented-upon democratic deficit in EU institutions means such a cowardly strategy actually has some merit.

The bell is tolling for Tspiras and his Syriza party, who will surely squander the benefits of the upcoming devaluation of the new drachma relative to the euro in a series of Marxist fantasy policies, when what they ought to be doing is collecting taxes and launching structural reforms (which they will never do). Greece will become just another poor Balkan country; and that is a tragedy.

But the bell is not just tolling for the Marxist schoolboys in Athens. By failing to master a crisis that ought to have been dealt with ages ago (debt relief for structural reforms, anyone?), Europe has destroyed any claim it might have had to be the future; frankly, it now becomes an open question as to whether Europe has a future, as it surely has proven it simply cannot take effective decisions in a crisis.

Bad to worse

No fun being Greek.  The Guardian reports:

In a brief, televised address to the nation, Tsipras threw the blame onto the leaders of the eurozone. But he did not say how long the banks would remain shut, nor did he give details of how much individuals and companies would be allowed to withdraw once they reopened.

Greek banks will not open until July 7 in an attempt to avoid financial panic, after ECB capped the emergency funds keeping them running.  

It later emerged that the banks would be kept shut until after the referendum on 5 July and withdrawals from cash machines would be limited to €60 – about £40. Cash machines are not expected to reopen until Tuesday.

Greece’s finance ministry later announced that the strict withdrawal limits would not apply to holders of credit or debit cards issued in foreign countries.

How long, do you suppose, before the machines run out of notes?

Meanwhile, we can expect a bloody day on the markets:

Share prices began to plummet across Asia on Monday as hopes dwindled for a resolution to the Greek debt crisis.

Japan’s Nikkei stock average briefly fell by more than 500 points in early trading, while the euro dropped more than 3% to 133.80 yen, its lowest level for five weeks. The common currency fell as much as 1.9% to $1.0955, its lowest level in almost a month.

The Nikkei fell 2.1%, while MSCI’s broader index of Asia-Pacific shares outside Japan dropped 0.8%. US stock futures dived 1.8%, hitting a three-month low, while US Treasuries futures price gained almost two points.

More than $35bn was wiped off the Australian stock market in the first hour of trading on Monday as investors brace for an increasingly likely Greek exit from the eurozone.

The BBC has the latest exchange rate for the euro against the £ at 1.4267 (which means that my lunchtime pint in my Spanish local now costs me the equivalent of less than a £ - it's an ill wind that blaws naebody any guid),

EU solidarity?

Extraordinary report in The Observer of last week's European Summit:

Matteo Renzi, the Italian prime minister, was incensed by the refusal of several countries, including Hungary, which has taken in 60,000 refugees since the beginning of the year, and the Czech Republic, to agree to take part in a compulsory refugee-sharing scheme to help ease Italy’s burden. Cameron kept fairly quiet. The UK has opted out of EU asylum policy and Renzi, who was in an emotional state, did not need to be reminded of its non-participation. But others took up the cudgels as the row intensified across the table. Dalia Grybauskaite, the Lithuanian president, told Renzi in no uncertain terms that her country would not take part either. Bulgaria, one of the EU’s poorest countries, took a similar line. Disputes flared. European commission president Jean-Claude Juncker, prime mover behind the idea of compulsory burden sharing, and council president Donald Tusk tore strips off each other over what should be done, as inter-institutional solidarity broke down.

Angela Merkel said that the migration challenge was the most serious and difficult she had encountered in the EU during her time as German chancellor (Greece is also somewhat on her mind) as Renzi railed against fellow leaders for betraying the EU’s values. A voluntary scheme was all that was agreed. “Do as you like,” Renzi protested. “If this is your idea of Europe, keep it for yourself … you do not deserve to call yourself Europe. Either we have solidarity or we waste our time!”

These guys are not getting enough sleep.

 

Crunch time?

Is the Greek crisis nearing resolution?  I am beginning to doubt if there is a means by which the Greeks can avoid default.  And Tsipras' decision to hold a referendum next Sunday seems more like an act of defiance to throw in the teeth of EU finance ministers.

Meanwhile, Draghi and the ECB are between a rock and a hard place:

The ECB has been providing life support to Greece for months by supplying billions in liquidity to the Greek banks. If Draghi pulls the plug, he could be held responsible for potential riots on the streets of Athens and national unrest. If he keeps the funding channels open, he will be accused of acting illegally and overstepping his mandate by financing a eurozone government.

In all the circumstances, it is increasingly difficult to see how some kind of agreement could be patched together.

An apology to my Italian friends

Yes, I regret to say that it is part of Scottish culinary practice to bake macaroni in a pie.

And, yes, I am sorry to say that the decision by a fast food emporium to desist from selling this less than savoury amuse-bouche was greeted by a howl whimper of protest, to the extent that the matter was raised in parliament.

The only consolation in this sorry affair is that Greggs (for they are the business concerned) remain steadfast in their intention to banish the macaroni pie from their shelves.

You can read about it here.

   

Donald duck

Puerile schoolboy humour

Prime Minister's Questions, yesterday:

Dave just can’t help letting himself down, either with the failure of his internal logic – employers have been gagging to get rid of tax credits so they can increase salaries – or by being a sucker for a bad gag.

“You don’t want FFA, full fiscal autonomy,” he sniggered at the SNP’s Angus Robertson, “You want FFS, full fiscal shambles.” FFS! Dave had got FFS into Hansard. High fives and lols all round in Downing Street. Coming next week, WTF. Working Tax Fraud.

Pretty pathetic.

 

Dirty work at the crossroads?

Was Buck House being naughty?  Was it the old bait and switch routine?  The Guardian reports:

On Tuesday the official in charge of the Queen’s accounts, Sir Alan Reid, expressed his worries about the implications for the royal household of a decision to allow Holyrood to control nearly all crown estate assets in Scotland.

On Wednesday Reid, the keeper of the privy purse, issued an unreserved apology, saying that a briefing on royal accounts that he hosted was “never intended to be a criticism of Scotland or of the first minister or to suggest that the first minister had cast doubt on the continued funding of the monarchy”.

He said: “As we made clear at the briefing, Scotland contributes in many ways to the Treasury’s consolidated fund – out of which the sovereign grant is paid.

“We said explicitly that to imply Scotland would not pay for the monarchy was simply wrong and we accept unreservedly the assurances of the Scottish government that the sovereign grant will not be cut as a result of devolution of the crown estate.”

If the palace hoped to divert attention from the meagre sums given by Treasury to support the royal establishment or the disgraceful state of Buckingham Palace, they probably succeeded.  But someone twigged that they had gone too far  Hence the retraction?

   

Game theory

The London press remains obsessed with Nicola.  CityAM believes in a conspiracy theory:

,,, there are differences between Scotland and Greece. The Scots, for example, have shown themselves to be much more adept practitioners of the esoteric discipline of game theory. Yanis Varoufakis, former academic turned Greek finance minister, specialised in the subject. A sound knowledge of game theory can often be very useful. Chris Ferguson, for example, winner of no fewer than five World Series of Poker championships, teaches game theory at UCLA. The deluded Greek Trotskyist, however, seems to have convinced himself that his theoretical knowledge would give him a decisive advantage in the negotiations with the Troika of the IMF, the ECB and the European Commission. But he seems to have forgotten that the purpose of playing a game is to win.

...

Nicola Sturgeon and David Cameron have manoeuvred themselves into a lucrative strategy of co-operation. The game began during the election campaign. The SNP needed to destroy Labour in Scotland. They trumpeted their intention to help Ed Miliband get into Downing Street. The Conservatives seized on this and used the SNP bogeyman to frighten the voters in marginal seats in England.

The game goes on. Cameron needs to make some concessions to Sturgeon so she can boast about them to the Scottish electorate. But the SNP also needs to maintain a set of grievances, which is the party’s raison d’etre. Neither side actually wants to redress them, so that both continue to gain and keep Labour out. Practical politicians are often much better game players than so-called expert theorists.

Rather fanciful, I would suggest ...

 

Music of the week

Pedantry up with which we are prepared to put

At last. somebody has made a stand for proper grammar:

Michael Gove, the justice secretary, has issued his civil servants with detailed orders on using good grammar, two years after he circulated similar “golden rules” to officials in the Department for Education.

The senior cabinet minister has wasted little time since his appointment after the general election in telling his staff how he wants them to draft letters and briefing papers.

The instructions tell officials to write “make sure” instead of “ensure” and to avoid using the word “impact” as a verb. He is also unhappy with the use of contractions, such as “doesn’t”, and the deployment of “yet” and “however” at the beginning of sentences.

About time, too.  There's far too much slipshod writing around.  And things have been getting worse in recent years.  However, I don't suppose it'll make much of a difference ...

 

Quote of the day

Are we reaching the end of the line?  Or is a twelfth hour deal on the cards?  The Guardian speculates:

So what might the deal look like? The usual can-kicking exercise, in all likelihood. In Brussels, the talk is of Greece being prepared to offer some compromises on pensions and tax in exchange for enough money to meet its immediate needs, along with the promise of debt relief later provided it sticks to its reform programme. This would resolve little. Greece’s economy will continue to struggle, the government will go slow on reform, and its bailout money will be depleted. Tickets for the new autumn production of the drama will shortly be going on sale.

 

The Pilton-Moldova Connection

The biggest bank robbery in European history?  $1 billion nicked from three Moldovan banks?  With the involvement of limited partnerships based in an Edinburgh housing scheme (not usually noted as a centre of financial expertise)?

The BBC has part of the story:

According to the Kroll report, based on Moldovan National Bank records, the equivalent of $498m in loans was transferred to three Scottish limited partnerships.

All have partners registered in offshore tax-havens, and all allegedly deposited the money in a single bank in Latvia.

Meanwhile the collection rights to those loans - and to others made to companies registered in Northern Ireland and Hong Kong - are said by Kroll to have been acquired by another Scottish limited partnership - Fortuna United LP.

The total sum owed to Fortuna United is $1bn - equivalent to the complete proceeds of the alleged Moldovan bank fraud.

But, surprisingly, the partnership shares an address with 420 other companies - including 258 other limited partnerships - at a flat in Pilton, the district of north Edinburgh famous as the setting for "Trainspotting", the novel about heroin addicts.

Extraordinary stuff.  Where can I get hold of the movie rights?

 

Timeo Danaos et dona ferentes

Down to the wire; The Guardian reports:

... the chances of a Greek default are now higher than they have ever been. The IMF called its negotiating team home from Brussels last week because the talks were going nowhere. Attempts to get them going again were abandoned on Sunday after less than an hour. The rhetoric has become angrier and angrier as positions have hardened.

Normally, the choreography that precedes a euro fudge would see the two sides edging closer together. The officials that prepare the ground for a deal would be piecing together 90% of the final agreement, leaving ministers the other 10% to haggle over on Thursday. That does not appear to be happening, which is why both sides are preparing for a default.

Can it be prevented? Yes, but it would either require the troika to moderate their key demands on pensions, tax and labour market reform, or for Tsipras to cross his red lines on the same issues. Neither looks likely.

Even so, it is difficult to believe that they will not cobble together some kind of agreement that will allow the can to be kicked a little further down the road.

   

Music of the week

La nostalgie de la boue:

Quote of the day

From The Spectator (here):

David Mundell, the somewhat improbable Secretary of State for Scotland, had at least one good line yesterday: “The SNP are asking for something they don’t really want, but of course they will complain if they don’t get it.”

     

Blackmail?

CityAM reports:

HSBC moved a step closer to leaving the UK yesterday, piling pressure on chancellor George Osborne to take action to persuade the bank to stay.

Chief executive Stuart Gulliver set out details of HSBC’s review of the location of its headquarters, looking at 11 different criteria, including taxes, the government’s attitude to finance, and the stability of the economy and regulatory environment.

I trust that Chancellor Osborne will tell them to bugger off if that's what they want to do.  Does HSBC really wish to entrust itself to the tender mercies of the New York regulatory authorities?  And a move to Hong Kong would bring it under the aegis of Beijing, hardly an improvement on London.  Furthermore, given their sanctions-busting, money-laundering, tax-avoiding history, who would want HSBC on their patch?

Better than expected

The way it's going to be

The Guardian's report of yesterday's debate on the Scotland Bill:

We’re giving you everything you want and more, Mundell [Secretary of State for Scotland] reiterated time and again. “We will be implementing the Smith Commission in full.” Scotland would be God’s paradise on Earth, a land of milk and heather where anything Holyrood wanted, it could have – except the bits it couldn’t.

For some reason, the SNP members were disinclined to take him at his word and frequently interrupted him. “Isn’t it the case that the bill would allow the UK parliament to veto anything Scotland did that it didn’t like?” asked Peter Wishart.

“Heavens no,” sobbed an utterly distraught Mundell. “The word veto is such an ugly word.” And he only wanted to speak in happy, fluffy words. “There is no veto. Just a right to disagree so strongly you can’t do it.”

Up stepped Alex Salmond. “The Scottish Daily Record argues that the proposals go nowhere near to implementing the Smith Commission,” he said. “They do, they do,” Mundell replied, “But even if they don’t, then that’s why we’re having the debate so you can make some amendments."

Difficult to imagine Mr Mundell sitting in cabinet.  He is the living proof of the Peter Principle.

 

Music of the week

Why the World Cup went anywhere other than England

The Sunday Times reports:

One thing has become very clear from the scandal engulfing Fifa. England is simply not punching its weight when it comes to handing out bribes. When we were bidding for the World Cup, the most our lot could manage was to bung the wives of the crooked and thick-as-mince delegates a few Mulberry handbags.

...

Our bribes were so half-hearted it makes you ashamed to be British.

I think he means English ...

   

Round and round the mulberry bush

The BBC's Peston casts an interesting light on the Greek demands for a bailout (my emphasis):

Greece desperately needs those few billions of euros to pay its maturing debts to... the IMF and the European Central Bank.

With 300m due to the IMF on Friday, and a further 1.3bn euros later this month, this has always been a row about book-keeping entries and the accounting treatment of debts.

It is a dispute about whether the eurozone's creditors will release funds so that they can pay themselves and avoid having to call Greece in default.

Or to put it another way, it is all about whether the IMF and eurozone can keep up the pretence that Greece is a sound and solvent debtor.

But doesn't it normally tell you something pretty important about those who owe you money when you have to lend to them so that they can keep up the payments to you?

History suggests that at some point the IMF, ECB and eurozone will have to recognise that Greece's 320bn euros of sovereign debts is a lot of spilled milk that will have to be cleaned up.

I rather doubt if our teutonic friends would see the matter as essentially about book-keepiong and accountancy.  For them, it is a question of moral hazard - the Greeks have been naughty and must be punished.  But, as Mr Peston points out, it is difficult to see a way out of the impasse without some element of debt forgiveness.

 

A bit late for me

Twenty years ago, I might have qualified.  The BBC reports:

Young women are getting into the "Dad Bod" - but some think it's a recipe for laziness - while others are calling for a celebration of the female equivalent.

When 19-year-old university student Mackenzie Pearson wrote an article extolling the virtues of the slightly out-of-shape man, the reaction was huge - tens of thousands have been chatting about it on Twitter and Facebook.

"In case you haven't noticed lately, girls are all about that dad bod,"she wrote. "The dad bod says, 'I go to the gym occasionally, but I also drink heavily on the weekends and enjoy eating eight slices of pizza at a time.'"

I fear that I have reached the stage of the grandad bod, which young women are most unlikely to "get into" ...

   

Getting a bit heated?

The Times reports:

Nigel Farage has become a “snarling, thin-skinned, aggressive” man who is making Ukip look like a “personality cult”, the party’s campaign director has claimed in a devastating attack.

Patrick O’Flynn, the party’s economics spokesman and one of its most senior MEPs, breaks cover today to warn that the Ukip leader’s recent behaviour risked depicting the party as an “absolute monarchy”.

In an interview with The Times, Mr O’Flynn lit a match under tensions within Ukip over Mr Farage and his closest advisers. He claimed that the party leader had in recent months moved away from being a “cheerful, ebullient, cheeky, daring” politician, and blamed Mr Farage’s team of “aggressive” and “inexperienced” aides.

...

Ukip has lurched through a series of calamities since polling day. Having made good on a promise to stand down as leader if he failed to win his own Westminster contest, Mr Farage was reinstated after three days because his party rejected his resignation.

Less than 24 hours later, Douglas Carswell, the party’s sole MP, clashed with allies of Mr Farage over £3.5 million of public money available to the party. He accused Ukip officials of seeking to claim more “Short money” than it needed. The party said last night that the two men had met to discuss the issue but had yet to reach agreement.

Couldn't happen to a nicer bunch of people ...

   

Exciting headline of the day

From CityAM:

     What the election means for accountants

If you can resist the utter boredom, you can read the article here.  Aye, and don't mock.  Some poor soul had to write the damn thing.

 

Not necessarily the evil witches of the north

Surprisingly favourable comment from CityAM, not an organ which usually takes a sensible view on matters Scottish:

The City has well-developed relationships with Westminster’s established powerbrokers, but less experience working with Scottish nationalists. Some might feel concerned that a party with such populist support, which has won hearts and minds in traditionally working class, left wing areas, will now be so prominent in Westminster politics. 

And make no mistake, influential they will be. The SNP was already represented on the Treasury Select Committee and will now be seeking places on the Business, Energy, and Defence Committees among others.

So what exactly can the City expect?

First, the SNP group will not be a destructive force at Westminster, as some commentators have suggested. They may not believe in the institution they’ve been elected to, but under leader Nicola Sturgeon, her deputy Stewart Hosie MP, and Westminster leader Angus Robertson MP, they respect Parliament and will seek to play a constructive role in holding the government to account.

They recognise the need to be responsible and will speak to business to understand the matters of state they now have to scrutinise. The party’s Holyrood track record shows that it is keen to work with business in order to support economic growth, and so doors should be open both ways.

Second, the new caucus of SNP MPs contains some experienced businesspeople like former Deutsche Bank executive Ian Blackford and ex-Standard Lifer Michelle Thomson, while economist George Kerevan, lawyers Joanna Cherry QC and Tasmina Ahmed-Sheikh, and of course former first minister Alex Salmond bring intellectual rigour. They, and others in the party, can be allies for business.

Salmond will inevitably be a major figure, possibly chairing a Select Committee such as Energy, which would meet his own political interests and would also give Scottish energy businesses a voice at Westminster, albeit not in government. But make no mistake. Sturgeon is the SNP leader, so overlook her at your own risk.

    

Quote of the day

Sour grapes (?) from Rawnsley in The Observer:

This government will not be popular for long. In fact, the Tories were not popular on polling day: 63% voted for someone else. The Tories are not liked, even by quite a lot of those who voted for them. Many did so only because they fancied the alternative even less. His fragile majority will be acutely vulnerable to rebellions, ambushes and blackmail by a handful or two of backbenchers. That will get worse when the majority is eroded as byelection losses take their toll. By announcing that he has fought his last general election, he has put a sell-by-date on his premiership.

A vanishing majority, dissipating authority, a lot of cuts to come and expensive promises to keep, a fractured kingdom and an EU referendum that will split the Conservative party asunder. David Cameron should savour his “sweet” victory while he can. History tells us that it will turn sour.

Music of the week

Quote of the day

From The Guardian (here):

... the last post rang out over Whitehall at 3pm to mark the 70th anniversary of VE Day. There they all were, lined up for a final encore. Nick and Ed had little trouble keeping their heads bowed in solemnity. Dave looked to his right and clocked the SNP leader, Nicola Sturgeon.

But his biggest threat was standing just behind him. Boris Johnson is the one Tory who is not quite so thrilled by Dave’s success as the others. Boris hasn’t come back to Westminster just to run some two-bit government department. Dave looked pensive. Strange as it may seem, it was slowly dawning on him that winning an overall majority might just turn out to have been the easy bit.

   

Why the SNP won

Three less than wise monkeys - all three are pale, male and stale ...


   

It's not all bad ...

... but it's not particularly good.

Worth noting that the Tories are likely to end up with an absolute majority - but a wafer-thin one, with Labour and the SNP together forming a substantial anti-Tory bloc.

Cameron will need to keep his right wing in order, a far from easy task.  And the LibDems reduced to irrelevance, so a period of relative silence from Clegg will be welcome.

But still, a miserable night ...

 

Democracy, more or less ...

Philomena explains it all:

Forecasts

From The Spectator:

Latest seats forecasts

	Con	Lab	SNP	LD	Ukip	Oth
YouGov	272	276	52	24	3	23
Election Forecast	281	266	52	26	1	24
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Knife-edge!

   

I disagree with Nick

So Clegg thinks that a minority government would be unable to survive until Christmas.  The BBC reports:

The UK could be poised for a second general election by Christmas if either Labour or the Conservatives try to form a minority government after 7 May, Lib Dem leader Nick Clegg has warned.

He argued that only another "stable and strong" coalition involving his party could save the country from a re-run.

I would suggest that he is under-estimating the difficulty in actually triggering a general election in such circumstances.  According to the Fixed-term Parliaments Act, there are only two ways to call a general election outside of the usual five year term.  First, the House of Commons votes by a two-thirds majority for there to be such an election; or, second, the House of Commons passes a motion of no confidence in the Government, and an alternative government cannot be established within two weeks thereafter.

Given the expected parliamentary arithmetic after Thursday, where neither the Conservatives nor Labour have an overall majority, it seems to me that the Conservatives and Labour would actually have to agree that neither of them should continue as a minority government before they could call a general election.  That is of course possible but seems improbable in the short term.

I don't see why a minority government of one colour or another should not limp along indefinitely.

   

Fashion update

See that Ancelotti.  His annual salary may be more than 7.5 million euros but he still wears the same old cardy to every match.

       

Subverting democracy

The New Statesman explains how it may happen:

The Tories declare victory if they have the most seats, regardless of the parliamentary arithmetic. Key supportive newspapers endorse this line and pressure is put on the broadcasters to follow suit. The Tories begin publicly reassembling their coalition with the Lib Dems within hours of the polls closing, despite knowing they have no majority in parliament, in order to cement the image that they remain the legitimate government.

In the run-up to the Queen’s Speech on 27 May – with David Cameron remaining as Prime Minister – the media campaign against the SNP will make the current onslaught look timid. Amid political uncertainty, a falling stock market and the value of  the pound are used to build an atmosphere of national emergency. A handful of right-wing Labour MPs – the likes of Rochdale’s Simon Danczuk, perhaps – are wheeled out on TV to echo the line of illegitimacy, helping to construct a narrative of growing Labour turmoil. Moves to depose Miliband are encouraged. The aim will be straightforward: to make it politically impossible for Labour to form a government even though left-of-centre parties have a parliamentary majority, and to pave the way for new elections against a backdrop of right-wing hysteria.

Not so implausible?

 

Photo of the day

H/t  Heather

Getting it on ...

Music of the week

Latest

Here it is:

According to the Guardian’s latest projection of polls, the Tories are projected to win 276 seats, Labour 267, the SNP 55, the Lib Dems 27, the DUP nine, Ukip three and the Greens are set to retain their one seat.

Both Cameron and Miliband would need the votes of other parties if they are to command the confidence of the House of Commons.

And as things stand, the arithmetic is to the advantage of Miliband.

This is because the sum of the “anti-Tory” bloc – those parties that have said they would vote a Tory government down – currently adds up to 329 seats: a majority. Tallying up all the possible sources of support for a Cameron-led government yields 315 votes.

Probably too close to call ...

 

Cutting off his nose to spite his face?

CityAM reports:

LABOUR leader Ed Miliband unequivocally ruled out a deal with the SNP last night, telling an audience in Leeds that he would rather give up the keys to Downing Street than team up with Nicola Sturgeon after 7 May.

“If it meant we weren’t going to be in government, not doing a coalition, not doing a deal, then so be it,” Miliband said in a live BBC Question Time election special. “I am not going to have a Labour government if it means deals or coalitions with the Scottish National Party.”

Really?  Rather the Tories back in Downing Street?  Or is he just saying it?