What a transformation! Britain and the Olympic Games

Having written about Britain's litter problem only recently, I shall now eat my words! Arriving in London during the Olympics was like arriving in a different country. Helpful volunteers everywhere with a big smile on their faces (probably thinking of the amazing haul of Gold medals that was lying in wait for Britain!) and trains running on time!

Even Cardiff was presenting itself from its best side, with the city centre cleaned up for spectators of the football tournament and impeccable organisation during match days. What happened?

As so many, I was infected by the constant moaning and criticism that is so characteristic of the tone in the British media. Often the contrast with America couldn't be sharper. While Americans relentlessly celebrate success and effort, the British default sentiment is often latent defeatism or biting sarcasm.

But how things have changed! The Olympics have demonstrated that Britain can really put on world class events and that Brits can be proud of what they have achieved during the Olympics. Not only was this event run with incredible organisational skill, the enthusiasm and pride in British sporting achievements was infectious.

Nicola Adams - First Women's Boxing Olympic Champion

I watched with amazement the fight of Nicola Adams who became the first ever women's boxing Olympic champion and today the fight of Anthony Joshua who, after only 4 years of competitive boxing and at the age of 22, became the Olympic champion in the super-heavyweight category. What an achievement! Not to mention the win of Mo Farrah and the well deserved Bronze medal of Tom Daley.

So credit where credit is due: Britain put on a fantastic Olympic games and can be proud of herself!

Is there a right to assisted suicide?

The debate about assisted suicide will go into another round with the UK's Supreme Court dealing with this issue soon. The European Court of Human Rights in Strasbourg has also recently criticise the German government in this area so this issue presents a serious headache for governments across Europe. It seems to me however that some of the arguments in favour of a right to end your life make little sense. 

Proponents of assisted suicide have changed tack over the last 5 years. As direct legal challenges to the ban of ethanasia have largely failed, campaigners have redirected their efforts. They now argue that the provision of human rights covers assisted suicide. The main thrust of their challenge regards the notion of rights and entitlements which, so the theory goes, includes the right to end your life. 

There is something odd about this position however. Rights do not exist in a vacuum. Rights, understood as a specific entitlement, require obligations of other parties. A right to employment for example is worthless unless it is sustained by somebody else's obligation to provide this employment. In other words, entitlements are reciprocal goods, that can only materialise if other people have a duty to carry out actions that ensure the fulfillment of the right. 

This reciprocal nature of entitlements applies to all rights, even though often the recipient of a reciprocal duty is left unspecified. The universal right to life for example carries no defined duty of others to ensure that the holder of the entitlement continues to live. What it does however is to forbid any actions by any person that would end prematurely anybody's life. 

This is where campaigners of assisted suicide blur the distinctions between universal unspecified rights and specific entitlements. Assisted suicide requires the direct intervention of a medical professional. Formulating a right to assisted suicide hence entails the need to institute an obligation of others to assist. In assisted suicide there is no unspecified non-reciprocal entitlement. What campaigners want is a right that carries with it the duty of medical personnel to assist. 

Looking over the judges' decision now it seems clear that this confusion runs through their verdict as well. Although they emphasise that the final decision about assisted suicide should be left to national parliaments, the line of argument once again blurs the distinction between unspecified, non-reciprocal rights and entitlements that carry a direct obligation of third persons. 

To argue, as the judges do, that people have been denied a right who have not been assisted in suicide, is to argue that there is an entitlement to assistance, which in turn means there must be a duty by some to assist. This assumes that there is an obligation of medical personnel to kill. I struggle to see any justification for such an obligation in any professional code of conduct or, indeed, in any law. 

Perhaps the real problem is that rights are not offering a suitable framework to discuss assisted suicide. There are situations in our lives where we find that we have indeed no entitlements or rights, without necessarily having been deprived of one. We simply do not have rights to all and everything. 

Not yet ready for reform - the Lords will keep sitting

The House of Lords has been awaiting reform for more than 100 years, and the government announced today that it would have to wait a few more years. The legislation intended to transform the second chamber (which is actually the upper house), has failed to garner the support of a sufficient number of Conservative MPs and so had no chance of being progressed speedily through parliament. The government has decided to count its losses and wait for a better time.

No need to mothball the wigs yet - The House of Lords wont be reformed as yet

Although this government is not the first that lost its resolve to reform the upper house, the defeat will cause ripples through the government coalition. The junior partners in the coalition had invested a lot of political capital into the legislation and some of their MPs are now looking for opportunities to scupper some of the pet projects of their Conservative fellows. Why the Lib Dems were so determined to see this legislation through is however less clear.

It was badly designed and poorly timed. The legislation would have created an elected chamber of deputies (80%) and a small number of senators who gained entry to the house by appointment (20%). The overall number of Lords (or presumably senators in any future reformed house) would have been cut to 450, a large and welcome reduction. Yet, the electoral part of the new house had serious flaws. It was not clear which boundaries were to be used, whether members of the upper house would represent the same constituencies as their colleagues in the lower house, and how to prevent the three main parties from dominating the nomination process.

The biggest flaw however was that this legislation was ill-timed insofar as it anticipated reforming the chamber before Scotland was to make a decision about whether it would remain in the UK. If Scotland were to leave the Union, the upper chamber would have to be reformed along the lines of a stronger regional representation of Wales and Northern Ireland, the two minor partners in the Union. If Scotland stays in the Union, a more federal arrangement would equally need to be found to placate the desire of Scottish voters to be properly represented in Westminster, as well as those in England who think that English voters got shortchanged by the current devolution arrangements.

In essence then, any reform of the upper house would need to take into account the centrifugal tendencies that were set into motion by devolution. A simple exchange of unelected peers with elected ones would have failed to address any of the major constitutional issues which Libdems are often so fond to discuss. There can also be little joy on the LibDem benches about some of its own peers in the House of Lords that openly advocated against the proposal. As with so many things, the House of Lords may look antiquated and out of touch from the outside, but once you are on the inside and make a living with it, you make your peace with its less agreeable features.

On balance however there is no doubt that the House urgently needs reform. While the Labour leadership may rejoice at the defeat of the government and the brewing trouble between the coalition partners, it has nothing to celebrate. The reform of the upper house is long overdue and to have scuppered a clear time table for reform does not give them any brownie points with potential voters.

Why the Euro is still stable

When Britain dropped out of the ERM, some people got very rich. George Soros was one of those who  bet against the pound remaining in the ERM and the windfall from the decision of the British government (reportedly more than 1 billion dollars) made him a rich man for the rest of his life. The current crisis of the Euro should equally see plenty of hedge funds betting against the Euro but nothing similar to the ERM disaster has happened so far. The question is why is no one betting against the Euro? The answer is an interesting one and reveals why the Euro is not dead by any measure.

First, the Euro has remained stable in terms of currency fluctuations. The reason is that, while capital flight from Greece, Spain and Italy has certainly occurred, the surplus money has mainly been invested in German bonds, which balances out the Euro capital flows across the currency zone. Second, Spain and Italy have actually imposed bans on short-selling which prevents hedge funds to bet against Spanish and Italian bonds. With Greece the case is slightly different. Although credit default swaps are still in place, any heavy betting against them may trigger a large scale default of the country which in effect wipes out any chance of gaining a profit in the process. So there are limits to the profit you can make in a highly speculative market. Traders know that and hence stay away from an overheated Greek bond market.

But a look at some of the capital transfers within the Euro zone also indicate why the currency is still stable. Although there are some serious divisions between those countries that lose capital there are also winners such as Germany. In order to balance the loan commitments between individual national central banks and the ECB, the German Bundesbank has lend back much of the capital it gained through the bond market to the ECB. According to the New York Times, the Bundesbank lend the ECB over a 12 month period more than 730 billion euros up till June this year, double the amount it led in the previous 12 month period. So, while the Euro is internally riven with divisions, the overall capital transfer balance ensures that the Euro itself has not come under the onslaught of traders betting against a Euro collapse. However, as Moody has pointed out recently in its report on Germany's credit rating, Germany's ability to counteract some of the effects of this capital flight is not unlimited. So the picture can change very quickly and we may still see some people getting very rich indeed.

Louise Mensch to quit as MP

There is little else that can be said for Louise Mensch's decision to quit parliament than that this is a serious loss to the political life in Westminster. Mensch has brought qualities to politics that are often absent from other parliamentarians, such as eloquence, a sharp intellect and an admirable sense of impartiality as the member of the Culture Commons Committee investigating the phone hacking scandal.

She gained a high public profile very quickly after entering parliament in 2010 mainly because of her outspokenness on media and gender issues. Whatever her political loyalties to the Conservative Party she was certainly one of the greatest assets David Cameron could muster in wooing more moderate members of the public and Mensch played, inadvertently perhaps, a critical role in de-toxifying the Conservative brand by offering a different public appearance to the stale old male party hierarchy. 

One of her most memorable moments came when she defended the decision of the Conservative members of the Commons Culture Committee not to support the highly biased and partial report into phone hacking. The intemperate language of the report and the lack of evidence to support one of its conclusions led Mensch and other members of the Committee not to endorse it. The refusal of the Labour MP Tom Watson to amend one passage of the report, largely because of personal vanity, did serious damage to the impartiality of parliamentary committees. In contrast, defending her position on Newsnight, Mensch was balanced, fair and sharp, which provided a real highlight of political decency and honesty. 

Mensch's decision raises the question however why few people with similar intellectual abilities enter politics. One reason may be that politics is in fact a difficult and undervalued (yes, underpaid) occupation. The workload (of up to 60 hours a week) can be taxing and few people of high calibre with a professional background find this attractive as politicians' salaries in the UK are low compared to business or remuneration in the civil service. Add the unpredictability of the job and you get an unattractive package all around that offers little to intellectual high flyers like Louise Mensch. 

How school reforms can go wrong

The Education Secretary Michael Gove is introducing some of the most radical reforms of the English school system in a generation and the changes have drawn substantial criticism from local authorities and teacher unions. Gove has been smarter than other cabinet members in formulating his reforms as a continuation of the Blairite reforms. And he is right to lay claim to Blair’s legacy insofar as his reform programme is in essence a speeding up of the removal of schools from local authority control, otherwise known as the Academy programme. 

The motifs are equally undisputed. Gove is on record that the main impetus for education reform is the dissatisfaction with local authorities which often keep up to 25% of the educational budgets for services that often lack transparency, accountability and, more importantly, do little else but increase the burden of bureaucratic control on school teachers without improving school performance. 

So far so agreeable. One main criticism of Gove’s reforms however has focussed on educational budgets for local authorities. Critics argue that removing schools from local authority control and fund them directly from the Department of Education may increase temporarily their available funding, but may undermine the financial viability of those schools that remain under local authority control. 

This is an important point since reductions in funding for those schools that are already underperforming is unlikely to improve their quality of teaching. In a way then, freeing some schools from local authority control and increasing their available budget may improve the lot of those kids who have the chance to enroll there while those staying behind in ordinary schools are likely to face deteriorating conditions. 

Now there is more evidence from the US in a recent piece of research about charter schools (similar to academies in the UK system). The New York Times, referring to the study, writes that the main effect of opening charter schools is that student numbers drop in normal schools, at times up to 10 percent which makes the provision of certain academic subjects unviable. Those schools that remain under local control often need to reduce their teaching portfolio and lay off teachers. 

On the face of it, this would undermine Gove’s claim that more competition in the educational sector through the introduction of free schools and academies lifts the quality of teaching for every pupil in the long term, no matter where he or she is enrolled. 

On the contrary the study seems to demonstrate that in the short term, students remaining in schools under local control are worse off, creating a division of quality between schools that more competition was supposed to eradicate. In order to make Gove’s reforms work for everyone, we may need to look carefully at the funding of those schools left behind. Allowing some schools to move ahead of the pack may be laudable but the reforms will ultimately fail if they fail to improve schools for everyone. 

When the money runs out for Germany

The credit rating agency Moody's has put Germany on a watch list. The agency is concerned that Germany may not be able to fulfill its credit obligations in the long term because of the continuing crisis in Greece and Spain.

As the German Finance Minister pointed out, Greece and Spain are quite different cases. Greece is simply refusing to cut its expenditure despite receiving billions of pounds from German taxpayers to pay exorbitant wages to its civil servants in a bloated government sector.

Spain however faces a different crisis. The Spanish government has introduced significant reforms and is on its way to join Portugal and Ireland as the poster boys of reform. However, the legacy that drags Spain into the morass is located in the banking sector and rooted in an unprecedented property boom that lasted almost a decade. Now, Spanish banks are sitting on unsustainable debt with people unable to service their mortgage payments.

So far, most observers have thought that Germany can deal with Greece whose economy represents only about 2 percent of the Eurozone economy as a whole. However, Spain is a different case. The Spanish economy is the fourth largest in Europe and there is no chance that German taxpayers can rescue the Spanish banks without facing significant credit downgrading themselves. So Germany is in a tricky situation. What to do?

It seems that no one would benefit if Germany's credit rating deteriorated. In fact, with German borrowing potentially costs going up, the ability of Germany to help others would be impaired significantly and the whole edifice of Eurozone stability would crumble within weeks.

That's why the German chancellor now needs to show that she can be strong in the face of adversity. She needs to insist that the Greek government either introduce significant wage cuts in the public sector to bring their expenditure under control or she has to insist that Greece leaves the Euro. Likewise there needs to be more fiscal discipline amongst other Eurozone countries and the French president Hollande has to be made understood that this is no time for economic stimuli in his country for which the German taxpayers would need to pick up the bill.

The most important step Chancellor Merkel can do however is to remain firm in refusing to allow the European Central Bank to directly issue so called Eurobonds, which would be another way of providing money to France without the responsibility strings attached. Only if these conditions are met will Germany be able to play the role of main creditor in the Eurozone rescue operation. And no one is served if Germany goes the way of France or Greece.