copyright Hugh Harris 1993.
The other News From England. May 10th., 1993.
MAASTRICHT (pronounced 'Mastrict' in this country by most people).
This is a subject that all our newspapers think of as being extremely important to us all, and yet I have not yet met anybody who to my knowledge knows what it is about. I have decided to research it, but for the moment I will give you all I can from a position of reasonably extensive ignorance.
Maastricht is a town in Holland. For me it was until very recently a name on a road sign that I had seen throughout the seventies when I had been a European transport contractor. It was a town off the roads that I travelled to get to various parts of Germany, Holland and Belgium, and being a person who is interested in words I found it an interesting name of which so far I have found no translation. Maybe that's because I haven't looked in my Flemish dictionary (oh yes, I do have one).
Maastricht managed to attract the attentions of members of the European Economic Comunity (EEC) as a potential place to hold conferences, and so when a treaty was devised over which we could wrangle, then what better place than Maastricht in which to wrangle about it? It was chosen. Recent reportage gives it as being a new centre for drugs - and therefore I suppose some of the other seedier things of life as well. This seems to have occurred because of the treaty wranglings. I find the connection difficult to understand - are politicians drug-fiends as well as all the other things that people don't like?
Currently it is my belief that the Maastricht Treaty is a treaty that aims to take Europe further towards unity, and in particular with regard to having one type of currency instead of a different one in each state. And here's where the now abandoned "exchange rate mechanism" (which caused as much speculation and excitement as any football match in it's day!) came from. There are always similarities between football matches, politics and economics.
The idea of the exchange rate mechanism is that in order to get to a stage where we could have a single currency in Europe we would have to arrive at a fixed relationship between the currencies in use prior to the introduction of that common currency, so that the new currency could run parallel to the old ones for a period whilst the old ones are gradually pulled out of circulation. It needed to be temporarily interchangeable with the others.
So it was agreed that, for instance, the German Mark would never go further away from the English pound than (say) three marks to the pound give or take ten percent. Since it is a free market (anyone can buy Marks or Pounds) this is not as simple as it sounds because the price of the currencies fluctuate according to supply and demand, so the balance would have to be maintained by the central banks of Germany and England both either buying or selling their own currency for the other, and using market forces to keep the relationship stable. There are people who make a living by currency dealing, so that it is very much like a football match. If a central bank buys a currency in bulk, the price of that currency should rise. If a currency dealer suspects that the bank is about to buy, he or she will try to buy first and sell at the peak. If the currency dealer buys a large amount the price is likely to start rising before the bank needs to do anything, and so the bank may not bother. Etc. etc. On the other hand, if a bank starts to sell fast, then the price goes downwards, in which case the currency dealer will try to sell before the price goes down much. I'm sure anyone can see that this is not the most scientific way to carry on, but it seems to be the only way that works at all, even if not at all well.
Unfortunately, it is not anything like as simple as that, for a number of reasons. First of all, if interest rates are high in a country, then people might buy that country's currency in order to lend it to people in that country for high interest rates - or they might decide that with such high interest rates the prospects for the economy of that country were poor, in which case they might decide to sell instead! (One of the things that happens when a country is poor is that their currency buys less and less in other countries, and for some reason this seems to help their own home economy to collapse if it is allowed to go too far - the reverse can happen for a strong economy and cause other problems - this needs a study in itself, and indeed people have been studying economics for many years).
Having grappled with that problem, let me give you another dimension. I think there are 12 members of the EEC, and they all have different currencies. They would all have to be kept in a fixed relationship to each other if this idea was to work, so that if the Spanish Peseta (as did happen) got too far out of line with the English pound, then the Spanish and English banks might have to take action that would upset the relationship between their currency and possibly half a dozen other currencies. They would all then have to get into some heavy buying and selling in other directions.
So everybody was juggling away trying to keep the whole precarious thing in balance, when suddenly the English decided to pull out of the exchange rate mechanism and let the pound 'float', as they called it. What they meant was to let it find whatever 'natural' position it might find in relation to the other currencies.
One might think that it would then be possible to re-enter the exchange rate mechanism, but of course the economies of all countries keep getting better and worse (like a football match) and so there is no fixed relationship that can be maintained between them unless possibly by abandoning the capitalist system - and the Soviet Union seem to have failed at doing that, although that does not necessarily mean to say that it is impossible. One day someone may discover a way of doing it, but it hasn't happened so far.
There was in Europe at one time a currency called the ECU European Currency Unit - and nobody seemed to take it very seriously. As far as I remember it was around in the seventies, and it was not until the late eighties that I decided to offer to trade in it, but by that time nobody seemed even to know what it was. I suppose the best thing about the ECU would be that if it came into common use it would gradually replace the existing currencies at whatever exchange rates happened to exist at the time. If each member government insisted on paying it's bills in ECUs, then one imagines they would come into common use in a reasonably short time.
In fact, capitalism only works marginally better than that which the Russians called Socialism - that is, it only just works, and is not particularly equitable.
The rest of Maastricht is a mystery to me, and in particular the 'social chapter' which is getting a lot of discussion. It's name suggests that it is to do with such matters as the provision of social security, rules about minimum wages, union law, and so on, and I will be investigating it in the future. What I think is the case at the moment is that the Confederation of British Industry object to the Social Chapter because they say it will make Britain uncompetitive in world markets, which suggests that it exists primarily to protect the underdog and that British industry cannot compete in world markets without exploiting the underdog.
John Major (our prime minister> is alleged to have drawn in a clause to the British part of the treaty that opted us out of the social chapter! There is a threat to challenge this in the High Court, and there is talk about going to the central European court.
what happens in Europe at the moment is that each country governs itself (and there are many anomalies here) and the central European parliament tries to get us all to conform to European standard legislation, so that if a government makes a decision that someone doesn't like they have the option (if they are very rich, as far as I can see) of taking the matter to the central European parliament, who may or may not make some pronouncement, which may or may not have an effect in the country concerned. The British seem to have quite a capacity for evading European law.
Since there are almost as many languages as there are states in the EEC, it is quite likely (the subtleties of a language often being missed by the non-native speaker of it) that all the legislative decisions made are slightly more faulty than those made by individual states! Still, it keeps the lads in a job.
Maybe during the next academic holidays I will go to Maastricht and have a look.
ASIL NADIR is becoming a slightly clearer picture to me. Or I should say I have read more about him in newspapers that may or may not be true.
The company that he headed is one called Polly Peck PLC (Public Limited Company), a company that was even trading when I was a teenager. They had high street shops in which they sold what always looked to me like very cheap textile goods. I always wondered how they managed to make a profit.
But what was more interesting to me was that during the eighties they seemed almost to disappear, and yet at the same time their shares rocketed upwards in value (before they dropped to nothing). So someone was buying them.
They built up massive debts to their suppliers, I believe. Then there was a scandal in which it was alleged there were various irregularities to do with international trading, and then there were bankruptcy proceedings against Asil Nadir - and I presume against Polly Peck.
Now, one of the things that are characteristic of human nature is that when the golden egg they bought turns out to be painted base metal they look for someone to blame, so that whether Asil Nadir is guilty or not of whatever these people suggest they will try to pin it on him.
Investigators working for the blamers have located £378m sterling in a selection of bank accounts around the world that are allegedly Asil Nadir's. It couldn't by any chance be one of the reasons he wanted his bail conditions altered to allow him to travel anywhere in the world?
Whilst he was observing his bail conditions, it was not possible for the blamers to get their hands on this £378m, but now that he is not they think they have some chance of getting hold of it. Interestingly, it is thought that the money only represents about 5% of the amount owed by Polly Peck to their various creditors. The temptation is to ask where the rest of the money went, but it may actually have been frittered away by extremely bad management of Polly Peck's affairs in very difficult trading conditions, and not at all into private persons' pockets. If it did, Polly Peck is a PLC, and there is nothing for anyone to pay out.
To me, the whole thing is a bit surreal. I could retire very comfortably indeed on £1m. Indeed, I could retire on a quarter of that without any great difficulty and not ask for my state pension (which I probably won't get anyway by the time I am old enough to claim it). I then find myself asking what someone would want such sums for, if fingers in the till is the allegation? But for some, money is the be-all and end-all of life.
The Turkish government seem a little anxious over this matter, because it may in some way affect their economy and standing in the eyes of the British and possibly others. However, they can't do anything about it because they do not control Northern Cyprus (where Asil Nadir is currently holed up), which is an 'independent' state. British international fraud police think they may try to take him when he is in transit from one country to another, and consider the only real impediment to this idea to be that he flies in a private jet! I thought he was bankrupt. Indeed, I was under the impression that he was claiming legal aid.
Maybe it's the entertainment value of evading people he's interested in. After all, it makes you famous, and a great many people are interested in that.
TESTS for school children are still a subject of interest here. In many ways, I can see the charm of it, but fail to see how testing people's performance is going to help them in the rest of their lives. If they are found to be wanting, it will increase their inferiority complex, and if they are found to be not wanting (the nature of testing is that this cannot be, if you think about it) they may well wonder why they are wasting so much time at school. I'm afraid for a great many people school is not as exciting as teachers would like to think it is - especially as there are often 30 or 40 people to a class, great equipment problems, and little freedom.
It is a touchy subject, because schools are questionable at their best. But the point about testing is that it says, "this is how good you could be at this, and this is how bad you actually are." It is a question that must necessarily get a negative answer, and not a few people take a negative answer to confirm their already existing feelings of inferiority.
Well, that's part of another week's news. I found an old mental hospital magazine the other day, written and published by staff and patients at the Bethlem Royal Hospital, and in it was an article by me - Do It Yourself with Jack Plane. I shall reproduce it next week if I get time.