France

NATO – 19 nations may hit 2% promise 18 years after committing to do so

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It is a farce. In 2006, NATO Defence Ministers agreed to commit a minimum of 2% of their Gross Domestic Product (GDP) to defence spending. This guideline, according to NATO,  “principally serves as an indicator of a country’s political will to contribute to the Alliance’s common defence efforts.” In 2017, only 5 of the 28 members outside the US have met the 2% threshold – Greece, Estonia, UK, Romania & Poland in that order. Despite Greece’s economic problems elsewhere, it manages to honour the deal. NATO Secretary General Jens Stoltenberg said “the majority [not all] of allies now have plans to do so by 2024.” 3 more are expected to hit the target in 2018. So for all the good will in the world, is POTUS wrong to call the other 19 members slackers that ride off the US taxpayer when so many of them are only likely to hit the target 18 years after ‘committing’ to it?

NATO commitment in 2017 can be seen as follows.

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Although all credit to the Europeans and Canadians for getting away with it for so long. Previous US presidents have obviously not concerned themselves with getting a fair deal on mutually agreed commitments. Although in what world would American taxpayers be upset to see the rest of the team pick up the slack?

Naturally the media are getting mileage out of the insensitive bully attacking his supposed allies. In fact Stoltenberg said last month on record that, “burden sharing will be a key theme of our summit next month, and I expect all allies to continue their efforts.” He reiterated that to Trump yesterday.

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To be brutally honest, how effective can a NATO force truly be if words aren’t put into action? What good is a promise if it is to be honored 18 years later. Imagine if that is the mindset should NATO be forced to act militarily. Would those meeting their obligations feel within their rights to have a bigger say in how NATO should work?

The problem with such a lack of commitment is that over the 12 years where 23 nations have not come close to meeting their obligations, the sum total of the actual defence capabilities suffers for the duration. The US is 67% of total NATO spend and the UK, France  & Germany make up half of the remainder. Yet building a sustainable capability in defence does not come through half measures or poorly thought out procurement. What is missed on many is that over 70% of defence budgets are allocated to soldier pay, housing, healthcare, training and so forth. Procurement and RDT&E get funded out of the balance. Have a skirmish somewhere and yet more money is chewed out of buying new equipment for the sake of logistics (feeding 10,000 troops and servicing hardware in a foreign land). Then there is the subject of terribly managed procurement programs.

Take the French disaster that is the aircraft carrier Charles De Gaulle. Despite delays because of problems with a retrofit for radiation shields, the naval brass had to add 14 feet of deck because it realized that the E2-C Hawkeye surveillance planes it purchased couldn’t take off and land in its original build spec. Even now the flight deck is not long enough to conduct simultaneous launch and recovery operations. Even worse the blueprints for the CdG‘s propellers had been lost in a fire, which meant that the ship had to be refitted with hand-me down screws from carriers Foch and Clemenceau which meant her speed was cut from 27 knots to about 24 knots—which was unfortunate since her predecessors steamed at 32 knots. Speed to war zones is kind of important to gain a decisive edge. All of the spend to fix poorly thought out designs cuts from being able to procure other equipment and materiel. Scary to think Australia is buying 12 subs from the French! The problems are already revealing themselves despite not one boat having hit the dry dock.

History tells us many things of how NATO type organisations have failed in the past.The Peloponnesian Wars (431BC – 404BC) highlighted how things can change when allies do not keep up commitments and capabilities aren’t maintained.

Athens required her Delian League member states (consisting of city states mainly along the Ionian Sea) to pay tributes (phoros) to the treasury which was used to build and maintain the naval fleet led by Athens. Yet over time the member states relied too much on the wealth of Athens and over the course of the draining war and the costly campaign to Sicily, failed to honour the ever increasing demands to fund the league with the appropriate level of tributes which drove Athens into massive debt. Defence spending by the Athenians had been cut to around 30-60% of the average over the previous decade. The Delian League’s capabilities dwindled as a result and the Spartans, funded by Persia, took advantage of this and crushed it for good, in the very art of war that Athens was renowned for – the navy.

It is not hard to think of Trump feeling like a modern day Pericles. NATO is the Delian League and its projected enemies chip away all the while members dither over commitments, forcing the US to sustain the limited capability. Like the Athenians, the US has the most powerful navy in the world with a fleet bigger than the next 11 countries combined but even it has pared back the number of ships to less than 10% of what it had in WW2. Enhanced capability is one factor in cutting the surface fleet but even the US DoD realised that the conventionally powered US Kitty Hawk consumed 2% of the entire US military fuel bill annually so it was taken out of service to save money.

One can argue the $750 billion annual defence budget is plentiful but the US realises that power projection is an expensive business. Even Japan understands it can’t stay nestled in the bosom of US stationed forces forever without taking a proactive stance to defend itself. That is the same message to the 19 members NATO failing to pull their weight.

EU – 1.3m abortions, 5m births p.a.

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Eurostat statistics on abortion reveal that Germany, France, UK, Spain and Italy alone terminate a combined 760,000 fetuses per annum. Across the EU-28 there are 1.25mn terminations. Without getting into a debate on abortion rights, the pure statistical number points to 20.4% of fetuses never make it out of the womb alive. Every. Single. Year. At that rate over 10 years that is 12.5 mn children that could have added to EU population sustainability do not occur but the EU seems to think embarking on mass migration is the only solution to plug the gap. Is it? Ironically child support is one area the EU is happy to cede control to individual Member States.

The fertility rate across the EU-28 is now 1.58 children per woman, flat for the last decade and down from 2.9 in 1964. Demographers suggest that a fertility rate of 2.1 is required in developed world economies to maintain a constant population (in the absence of any migration). The number of live births in the EU-28 peaked in 1964 at 7.8 million. In 2017 this had fallen to 5 million. There was a brief period (2003-2008) when live births in the EU-28 started to rise again, returning to 5.5 million by 2008 but the GFC sent it down again – as economic hardship tends to cause a decrease in births. So are economic incentives too low to cause a rebound?

France has the best incentives for children and the highest birth rate inside the EU at 2.0 up from 1.7 in the 1990s. Germany is around 1.4 drifting from 1.6 in the 1990s. The lives for child rearing French are eased by cheap health care, inexpensive preschools – for infants as young as 6 months old – subsidized at-home care and generous maternity leave. Mothers with three children can take a year off of work – and receive a monthly paycheck of up to €1,000 from the government to stay home. Families get subsidized public transportation and rail travel and holiday vouchers.

In order to stop the declining working population over time, imagine if Europe hypothetically put the onus back on consenting couples to take responsibility for their actions and makes abortions harder to access without compulsory consultation over options? Why not graphically show the entire process to get some sense of reality for both parties? You can gross yourself on this link.

Perhaps, in today’s electronic world, automatically deducting child support from fathers that run from responsibility might make sense? Why should the state pay for others’ lack of accountability? Even if the child is placed in foster care, why not wire child support to foster parents indirectly via the Ministry in charge of its administration? The population crisis is not going away in Europe. Why not provide more incentives to married/same-household couples?

Mathematically speaking the numbers are huge. Imagine if the million-plus fetuses every year had a vote to be raised with foster parents as opposed to being terminated, what they would choose? Consider the €23bn Merkel has spent on mainly economic migrants in the last 2 years being put toward preventing 200,000 abortions in Germany over that period? €115,000 to avert each one might have been better spent. That is a huge sum of money period.

CM is not advocating control over the womb but surely transparency in policy over individual responsibility is not a bad thing with respect to many issues, not just abortion. What level of economic incentives are required to prevent some couples/women choosing to terminate? Surely that plays a part in deciding to terminate. Consultation services with respect to the subject don’t seem too commonplace or at least structured in such a way as to prevent them.

According to Eurostat, since 1964 the divorce rate in EU-28 equivalents has doubled and the marriage rate has halved. For every eight marriages in 1964 there was one divorce, now there is one divorce for every two marriages.

The proportion of births outside of marriage now stands at 40%, from 27% in 2000 to less than 7% in 1964. 8.8 % of the EU-28 population aged 20+ lived in a consensual union (de-facto). In Japan the number of births out of wedlock is 25% according to the MHLW. The dynamics of the traditional nuclear family are fading.

51% of the Swedish population is now single household. 51%! While some is attributed to an aging population, 19 of the EU-28 members has a single household ratio of over 30%. 12 over 35%. By way of comparison, Japan’s single household ratio stands at 34.6% from 27.6% in 2000.

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To further analyse the new ways of living together and to complement the legal aspect, statistics on consensual unions, which take into account those with a ‘marriage-like’ relationship with each other, and are not married to or in a registered partnership with each other, can also be analysed.  Sweden (18.3 %) has the highest rate followed by Estonia (16.4 %), France (14.3 %) and the lowest in Greece (1.7 %), Poland (2.1 %), Malta (2.5 %) and Croatia (2.9 %).

Is employment a factor?  It is mixed. Eurostat reported in Germany, the fertility of non-employed women has increased and that of employed women decreased, while in Spain, the opposite occurred; in Greece, the total fertility rate (TFR) of non employed women fell below that of employed women, changing from a positive differential of about 0.2 average live births.

Is education a factor? Apart from Nordic countries (Denmark, Finland and Norway), Portugal and Malta, in general, women with lower education had higher TFR between 2007 and 2011. Eurostat state the fertility of women across the EU over the same period with a medium level of education dropped by about 9%, while the decrease for women with high or low education was less significant.

Eurostat argues that economic recessions have correlation to falling child birth rates. Apart from the direct impact of economic crises at an individual level, the economic uncertainty that spreads during periods of hardship seem to influence fertility. From this point of view Eurostat believes the duration of a crisis may play an important role and, the duration and the depth of the current recession are unprecedented in some countries. The agency states,

The expected relationship is that negative changes in GDP correspond to negative changes in the TFR, possibly with some delay, thus showing a high positive correlation at particular lags. The correlation with the TFR is relevant in Spain and Latvia without any lag; in Bulgaria, Poland and Romania with one year of lag; and in the Czech Republic, Denmark, Estonia, Greece, the Netherlands, Finland, Sweden, Iceland, Norway and Croatia with two years of lag. Taking the overall average across countries, a change in GDP is mostly positively correlated with a change in the TFR within about 19 months.”

Do we cynically argue that stagnant child birth rates aren’t just a factor of societal changes? Perhaps a truer reflection on the higher levels of poverty in the EU since GFC and the harsh realities for a growing number of people behind the growing levels of populism who are suffering greater economic hardship than statisticians are presenting to the political class? Hard decisions must be made before they are made by external factors.

What happens when you poke a Russian bear?

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As written earlier in the week, regardless of one’s views on the righteousness of any attack on Syria, Putin is being faced for the first time in a long time, a leader of a foreign nation (nations as it turns out) prepared to stand up to him. Obama fled the Syria battlefield after being given a two hour window when Russia first went to the aid of Assad. If that wasn’t the ultimate sign of a bully in the Kremlin it is hard to think of what is. While sanctions may have bitten to a degree post Ukraine and the shooting down of a Malaysian Airlines flight, Syria is essentially a testing ground for Putin to weigh up Western (specifically Trump’s) resolve. If we look at Russia’s response post the Syrian strike,

The worst apprehensions have come true. Our warnings have been left unheard…A pre-designed scenario is being implemented. Again, we are being threatened. We warned that such actions will not be left without consequences…All responsibility for them rests with Washington, London and Paris…Insulting the President of Russia is unacceptable and inadmissible.

Kind of says it all really – Russia hasn’t been insulted. Putin has. He must have a glass jaw  like Trump! Two bullies flexing muscle. In a show down Should Putin wish to pick a direct conventional fight against 3 nuclear powers (explicitly mentioned), he knows that ‘mutually assured destruction’ is the very last option in the drawer and next to no chance of being selected despite all of the media beat up. On a conventional basis, Putin wins more battles by stirring up the hornet’s nests in other regions. Lending more support to Iran, Lebanon and Yemen. Destabilize Saudi Arabia and antagonize Israel.

CM wrote,

It is worth nothing that Syria is Rosoboronexport’s (Russia’s military export wing) 2nd largest customer after Iran. Putin is sick of having the West try to remove his clients. Assad is key to Russia’s foothold in the Middle East. With an essentially pro-Iran Iraqi government and Syria as well as Hezbollah Putin has a geopolitical doormat from the troubled separatist states to Russia’s south to Lebanon.

Some arguments have been made about the risks of the American, French or UK strikes killing Russian troops or civilians on the ground in Syria handing Russia free will to attack its enemies. Scroll back to November 2015 when the Turkish Air Force shot down a Russian Su-24 fighter it claimed entered its airspace. Two Russian pilots were killed in the shooting and subsequent rescue. The Russians were incensed but President Erdogan is still in power and Ankara isn’t flailing after seeing its capitol turned into smoldering rubble.

This argument that the Russians weren’t given advance warnings of the attack is ridiculous. Had the Russian defence forces been on proper alert (they most definitely weren’t passed out behind their radar screens after a vodka binge) they would have detected the missile launches. Wind back to the 59 missile launch earlier last year against Syrian chemical facilities. We didn’t hear a peep from Putin. Why now? Of course he is incensed over the booting of diplomats on the nerve agent scandal but this is a showdown of ego.

Think of the long geopolitical chess board here. Should Trump have backed down on Putin’s threats, wouldn’t China’s Xi feel equally empowered to annex Taiwan by telling POTUS that he risks ‘grave reprisals if he meddles with Chinese sovereign territory’?

For all the initial snubbing of Trump by Macron on his historic election win in France, there is no way he would have gone in alone to attack a chemical facility without the guarantee of the military might of America. It is unlikely Theresa May would have done it either. So for all of the ‘unhinged’ lunatic rhetoric bandied about by the media, foreign nations don’t gamble their own sovereignty lightly, especially over something like Syria.

General Mattis has said they plan no further strikes at this stage. Does Putin order his forces to sink a US destroyer in the Mediterranean which launched those missiles? Highly unlikely. He does have the best weapon available to do that (the ‘Sunburn’) but sending US naval vessels to the bottom of the sea on a strategic strike would seem a big response to a targeted hit.

Let there be no mistake. There is a new sheriff in town. Russia has a bloody nose it didn’t think it would find itself. Putin miscalculated that Trump isn’t all Twitter-fueled bluster. Uncertainty in foreign leaders is always a risk for enemies. Trump has shown Putin he won’t be bullied like his predecessor.

Putin doesn’t want a hot war with America. The best way to strike at the US is like the last 6 decades. Undermine her at every opportunity. Supply her enemies. As mentioned before, if the Russians didn’t think it worth hitting back at Turkey for deliberately targeting its fighters, it is unlikely that Putin, no matter how ‘insulted’ he might feel will take a strike not aimed at Russians as a pretext to pick a fight with Trump. Putin has worked out the US president’s measure. He miscalculated. He won’t make that mistake twice.

For the media, running all the scare campaign stories is not only highly irresponsible (as it did over Yemen’s attacks on Saudi Arabia) but proving the lack of depth of analysis. They can beat Trump over the head all they wish but should note the actions of Macron and May following him into the region as a tacit approval of the US leader. Was he the madman they portrayed him as in the first place they would have stayed well out of it.

Watch for Putin’s response (unlikely but will threaten it will come when the evil Americans least expect) and think deeply about why it is important that the real despots (Putin, Xi, KJ-U, Erdogan) around the world no longer have the ability to exercise free will in knowledge that the worst they face is a slap on the wrist from the UN.

Sounds more like grounds for congratulation than censure. 

Group think alive and kicking

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It is hard not to laugh at the headlines in media these days. Group think pervades. The headline that 19/20 nations agree by definition must mean the 1/20 (no guessing who) is dead wrong. Sort of like one kid answering the question incorrectly to a teacher and being ridiculed by the rest of the class). This is sadly the kind of mentality which carries far more risk. Consensus is bunk. Consensus is basically the euphemism for complacency. No matter how many scandals break about homogenized temp data (even from government bodies (i.e. IPCC & NOAA to name two), deliberate concocting of data which serve a purpose or confirmation that 98% of the models using this bogus data have overestimated ‘warming’. The point is that so deeply entrenched are 19 nations in group think that they are basically falling into cognitive dissonance. That is to say they only look for the confirmation bias rather than truly seek alternative theories which might hold merit.

If one objectively reads the Paris Climate Accord the US is spot on to refuse chipping in $3bn to a pot where the three other largest polluters have openly confessed they are doing   next to nothing to combat climate change. Sure rosy press releases push the idea that they’re fully on the climate crusade bus but reality is China has no plans to actively reduce CO2 emissions til at least 2030. Do people honestly believe Premier Xi will guarantee he’ll sacrifice Chinese economic prosperity for climate abatement? President Putin? PM Modi? Will they risk putting a bullet in the brain of the economy to save the planet? Not a chance.

The French plans to ban the sale of petrol/diesel cars after 2040 is also laughable. If you want to bury relatively technology starved French automakers like PSA Peugeot-Citroen. 23 years isn’t much of a lead time in the auto industry if one is decades behind to catch up. Will the grid be able to handle the 2mn new cars France sells annually? Will anyone do the math on the toxic gunk that goes into a Li-ion battery? Will special provisions be given to emergency services which require combustion engines to power the heat exchangers that help life saving equipment function?

No. But think of it the other way. How smart is Trump to make the rest of the world do all the hard yards  at no penalty to the US? That is the art of the deal.

Over 10.6 million Frogs want to jump out of the EU’s boiling pot

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While the media and the EU will no doubt be jumping for joy they’ll overlook the fact that over 1/3rd of the French who voted, or over 10.6 million, want to jump out of the EU’s boiling pot. Think about that number – over TEN POINT SIX MILLION.  Le Pen’s father only managed slightly better than 5mn or 17.8%. Macron won convincingly (Twitter follower growth ratio accurate again) although one can hardly call 1/3rd of a population backing a far-right nationalist something to celebrate.  It is a damning figure. Period.

The extent of the Le Pen gains should be viewed by the EU as a terrible omen. However many of the Brussels brigadiers have ignored it already as their tweets make painfully clear.

After losing 15 out of 15 referendums against it  the EU desperately needs reform. The Dutch election was still a strong win for Wilders and Rutte only saved seats by adopting a more anti-EU stance. The pro-EU Dutch leftists were slayed. The Swiss recently handed back their long standing invite to join the EU. The Austrians almost voted in the far right FPO and after Greens President van der Bellen recently said all women may be obliged to wear the hijab to show cultural sensitivity they may well think to do that next time. The right wing Sweden Democrats are well ahead in the polls looking to win the 2018 election. The Italians are on the way to vote in the eurosceptic M5S party as their referendum last year on parliamentary reform became a free kick to boot out the establishment. Hungary’s Orban has had enough of the EU’s directives on migrants. Greece is being forced to sell its assets in order to secure another bailout and submit to being a Brussels’ (Berlin?) protectorate despite the EU bending over backwards with the help of Goldman’s creative accountants to get the Greeks into the club. This will not end well as Greece has 37% poverty, 58% youth unemployment and a soaring suicide rate. Now almost 10.5mn French now think the EU is not working. Brexit anyone?

The problem with elections is that even though Macron will serve 5 years, over 1/3rd of his citizens are not happy with the state of terrorism, unemployment and the EU. If Macron doesn’t solve for these problems, Le Pen’s 2022 chances grow and she’s already calling for a radical overhaul of Front National.

The press was making Macron to be a tough negotiator on Brexit. Let’s not forget that the ranting Jean-Claude Juncker has had to be brought into line by Angela Merkel and Donald Tusk over his Brexit negotiations skills (or lack there of). EU lawyers have said the other day that the  €100bn Brexit bill has no legitimacy. The U.K. Local council elections should speak volumes of May’s mandate to pursue full strength hard Brexit.

Macron’s win buys the EU time. Nothing else. In fact the truest test of how petrified the EU truly is can be summed up like this. If they were supremely confident in their own legitimacy there would be no need for the constant self-reaffirmation and shouting from the roof tops about what a great place it is. If indeed it was so, democracy would endorse them every time. As it stands the self-praise would even make Barack Obama blush.

When electoral maps speak much more than 1,000 words you’ll clearly get the picture

One thing that has struck me when looking at before and after electoral maps it is the clear signs of the growing divide of the haves and have nots. Of course people vote but imagine if land mass was the decider it would be a no contest. It is almost as if there is a bubonic plague spreading throughout many nations, especially Europe.

FRANCE (2017)- Le Pen’s first round in Dark Blue, Melenchon in Red, Macron in Grey

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FRANCE (2002) Presidential first round (Jean Marie Le Pen in Dark Blue, Jacques Chirac light blue and Lionel Jospin in Pink

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BREXIT (2016)- in blue – how many Labour safe areas turned against the party  line

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UK election (1997) – Labour Party (Red), Tory (Blue)

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ITALY (2016)- referendum – the redder the stronger the NO vote (generally denotes poorer areas of Italy)

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USA (2016)- Trump’s GOP in Red

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USA (2008) – Obama in Blue, McCain in Red

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AUSTRIA (2017) – Presidential election – Right wing Hofer in Blue, Socialist van der Bellen in green (the winner)

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HUNGARIAN REFERENDUM ON MIGRANTS (2016) – Redder the zone the higher the NO vote

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THE NETHERLANDS (2017) – election – Wilders’ VVD in blue

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History of Dutch elections – VVD (Wilders) in blue

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Populism or Finallysomeoneislisteningism?

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The chart above is showing the rise and rise of Front National, the party of Marine Le Pen. While we can be easily dismissive of her father Jean-Marie’s vitriol it is clear a growing number of French support her views. She has garnered 7.5mn votes, well beyond the 5.5mn her father achieved in round 2 in 2002. While she may well end up losing the second round there is no point rejoicing a get out of jail free card. These events are telling. It is not as if Le Pen is going away. Like Wilders in Holland she might be too extreme for some but not for 21.5% of eligible voters.

Is it any wonder the establishment parties were knocked out for the first time ever?  She is listening to a growing number of French fed up  with failure, typified by Hollande. Emmanuel Macron might seem a fresh alternative at 39yo but we’ve seen what a disaster youth can be in the form of Canadian PM Justin Trudeau. His popularity is dropping like a stone as he is showing youth doesn’t equate to fresh ideas. Perhaps youth is one of his appeals which frankly is a worry although some might argue he is in touch with the 60s age group too.

Macron was a Socialist under Hollande. Very rarely does one change their party spots. In fact should he win I’m guessing he’ll be more of the same. He’ll pander to soft options and cosy up to the EU but that is unlikely to change the fortunes of those suffering the effects of long term (and youth) unemployment. That just makes Le Pen stronger the next time around. France will continue to suffer more terrorist attacks and weak leadership emboldens an enemy.

Juncker et al will view a Macron victory as a win for the EU but make no bones about the tsunami of discontent that lives inside the union. Now we have an unhinged Turkey which can not benefit the EU in any way. Greece is still a basket case. Italy worsens by the day and is far from a dead cert to avoid Italexit as its referendum concluded indirectly.

The denial from EU flunkies after the Dutch election was staggering. The comments talking of a triumph for the EU couldn’t be further from the mark. The words echoed the type of denial one might find from the England Rugby coach for why his team didn’t make the World Cup play-offs at the home tournament The fans were shaking their heads at the dismal explanation.

In almost every EU country the right wing/anti-establishment parties continue to grow in strength. Even if they haven’t won outright majorities, incumbent parties can’t rest on their laurels. They must adapt. Australians have abandoned the two major parties in droves. The no nonsense One Nation Party is filling the vacuum because they are doing one thing – listening. It is the one thing the EU continues to miss – reform. If they think the Dutch, Austrian and French election results are endorsements this year they’re only accelerating the path to failure. We all know the outcome of national coaches who fail at the highest levels!