Hollande’s protection detail forgot their guns at Rio+20

A delicious tale from this morning’s Telegraph:

French secret service agents tasked with protecting President Francois Hollande “forgot to pack their guns” while on a recent trip to a climate conference in Brazil, it was reported on Wednesday. In a highly embarrassing Inspector Clouseau-style blunder, the presidential guards from the elite GSPR unit only realised the guns were absent upon arrival at Rio de Janeiro Airport.

They usually travel with a secured briefcase containing an array of firearms. But when they sought to present the weapons to customs officials, they were nowhere to be seen. “They searched the (presidential) Airbus with a fine tooth comb, to no avail,” according to French satirical weekly Le Canard Enchaîné. It later transpired the guns had been left at the Elysée Palace in Paris.

This meant that for the duration of the trip, the bodyguards’ only means of protecting the French president were their “bare hands”, Le Canard reported. “In police memory, it’s a first,” one elite officer was cited as saying.

The end of impunity for bankers? How Spain’s indignados are using crowdfunding to bring them to justice

Image: Colbrain crowdfunding

Following the collapse of the bank he was running until earlier this year, Rodrigo Rato probably thought he would be able to slip into a quiet, if tarnished retirement.

A former managing director of the IMF and minister of the economy during Spain’s boom years, Rato stepped down as executive chairman of Bankia in May after steering the group onto the jagged rocks of a €4.5b government bailout. Rato had bragged about the bank’s huge portfolio of loans and deposits, and it was floated with great fanfare on the stock exchange last summer. Within a year, however, buckling under the weight of a mountain of bad loans, the bank had had to be part-nationalised (for a description of how it happened, see this FT article). As well as institutional investors, hundreds of thousands of unwary Bankia customers and thousands of members of staff persuaded by their trade union that the stock was a safe investment found themselves out of pocket.

A few weeks after Rato’s resignation, his successor revealed that the net profit of €309m in 2011 that the bank had reported was in reality a €3b loss. The stricken entity would need an additional €19b bailout, and become the major trigger for the European Union rescue package announced by an embarrassed Spanish government earlier this month.

This latter revelation sparked the interest of Spain’s “indignados”, the loose association of young protesters who spent much of the middle part of 2011 camped out in the main squares of Spain’s biggest cities. The movement has been fairly quiet of late, but the Bankia debacle has roused it from its slumber. Deciding that Spain’s bankers had been getting away for too long with misleading the government, shareholders, customers and, well, everyone else, they took action.

The target was Rodrigo Rato, the idea to sue him and his colleagues for falsifying the firm’s accounts in the lead-up to the IPO. Having obtained support and crucial information on the board’s activities from a group of ten disgruntled shareholders, the indignados’ umbrella organisation 15-M needed to find €15,000 to meet the costs of filing the suit (the breakdown of those costs is detailed on the group’s website). Many of its members are unemployed, many others are students or low-paid workers. None had the means to take legal action single-handedly. What to do?

Ingeniously, they turned to crowdfunding to raise the money. Like its more famous cousin Kickstarter, the website goteo.org allows those in need to solicit funds from anyone who feels like contributing. In late May, therefore, as El País reports, 15-M began a Twitter campaign to drum up interest, under the hashtag #15MpaRato. At 9am on 5 June, the goteo.org page was launched. Within an hour it had received 11,000 visits. By 2pm it was in danger of crashing because of so many donations, and had to change servers. Within 24 hours, the fundraising target had been surpassed, with a total of €19,413 accumulated in donations of between €1 and €500. ‘Of every 40 attempts,’ reported a 15-M member based in Seville, ‘only one managed to make a successful donation.’

Rato and his colleagues will now have to stand trial, and the success of the fundraising effort has encouraged dozens of other Bankia shareholders to add their weight to the campaign. 15-M are seeking punishments of up to six years for those responsible for the bank’s demise, and preventive custody and an embargo on their assets in the meantime. In the pre-internet days, it would have taken months or years to raise the money to pursue such a case, but as one 15-M member remarked to Spain’s national TV station, with the power of crowdfunding, ‘fear has changed sides in the battle between those at the top and those at the bottom.’

Will the Eurozone crisis finally get EU leaders to address its democratic deficit?

The FT has this as lead story this morning:

The European Union would gain far-reaching powers to rewrite national budgets for eurozone countries that breach debt and deficit rules under proposals likely to be discussed at a summit this week, according to a draft report seen by the Financial Times. The proposals are part of an ambitious plan to turn the eurozone into a closer fiscal union, giving Brussels more powers to serve like a finance ministry for all 17 members of the currency union.

Some thoughts:

First, it’s welcome that we’re finally seeing evidence of some seriousness of thinking in Europe about what it will take to get through this crisis, rather than the crappy one-step-at-a-time incrementalism that’s characterised everyone’s response so far.

Second, this probably is a necessary component of a solution that will actually work, if the plan is to keep the Euro going.

Third, if this did happen, note the distinction that would then exist between the EU and US approaches: in America, the consequence of fiscal irresponsibility isn’t to pass the back up the chain (to the federal government), but rather to throw it down the chain (hence how many cities and municipalities are facing bankruptcy).

Fourth, Commission staff must be almost fainting with excitement at the idea of so much power shifting to Brussels.

Fifth, if EU leaders did decide they were willing to contemplate this major shift, then they would have to get serious, at last, about Europe’s democratic deficit. For all that NGOs love to paint the IMF as anti-democratic, actually countries do face a choice about whether to seek an IMF bailout (with conditions attached, yes) or not. Under this proposal, if I understand it correctly, EU states who’ve messed up their finances would not: they would have no option but to shape their budgets according to the wishes of a bunch of unelected bureaucrats in Brussels. Hard to see that working out as a politically sustainable arrangement.

Sixth, if EU leaders were to get serious about Europe’s democratic deficit, then we’d be straight back to the whole circus that was the attempt to agree a European Constitution last decade. Open question: is the Eurozone crisis serious enough that the French and other European electorates would be better disposed to such an agenda now than they were in 2005?

Seventh:  against this backdrop, it becomes obvious why the UK government’s strategy of separating the governance of the Eurozone from the governance of the EU as a whole makes zero sense.

Communicating with the public on aid and development spending: we need a better story

The comprehensive Data report released today by the One campaign reveals that the flow of aid from Europe to developing countries fell by €700 million in 2011, the first such drop in almost a decade. The crisis in the Eurozone and the squeeze created by austerity measures are taking the blame for this, with Greece and Spain having – understandably – made the largest cuts in their development budgets.

So far, much of the commentary has concentrated on what this means for the EU in terms of its pledge to contribute 0.7% of national income towards achievement of the Millennium Development Goals by 2015.  Although the UK, Ireland and the Netherlands are on track to meet this target, many other European countries will have to stump up billions more in order to do so.  This is a tall order at a time when cuts in public spending are being made across the board.

However, new research from IPPR and the Overseas Development Institute (ODI), also published today, suggests that this debate is missing the point somewhat.  Instead of focusing on ‘getting to 0.7%’, more attention needs to be paid to addressing declining levels of popular support for aid.

In February and March of this year, IPPR and ODI held a series of deliberative workshops around the UK: in London, Newcastle, Edinburgh and Evesham.  These sessions gave us a chance to have in-depth conversations with diverse groups of UK voters, both to hear their views on various aspects of the aid and development debate and to better understand the values and attitudes that underpin them.  The messages we took from these were mixed.

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