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12/3/05

Mail & Guardian Online: The economics of the madhouse

Mail & Guardian Online:

The economics of the madhouse

December was supposed to be the crowning moment for the United Kingdom’s twin presidencies of the G8 and the European Union. In Hong Kong, there would be a communiqué bursting with goodies for poor countries, so that trade could join debt relief and aid as the third leg of the UK’s anti-poverty agenda.

In Europe, there would be acceptance that modernisation, reform, flexibility -- the entire New Labour canon -- was the only way to meet the challenge of globalisation. In the event, both presidencies are mired in controversy and appear to be heading inexorably towards crisis.

Tony Blair, British Chancellor of the Exchequer Gordon Brown and Foreign Secretary Jack Straw have dug their heels in over Britain’s budget rebate from the European Commission, negotiated by Prime Minister Margaret Thatcher more than two decades ago. London’s line is that the UK taxpayer will not pay a penny more to Brussels until the common agricultural policy (CAP) is subject to more radical reform. A more serious concern is the linkage between the budget and the trade talks in Hong Kong. The government has a lot riding on the success of the World Trade Organisation meeting, and Blair is desperate that a year of global leadership should not end in failure. But the talks are deadlocked and look certain to remain so unless France can be persuaded to move further on the CAP.

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