This cap on bankers’ bonuses is like a dead cat – pure distraction

EU autocrats think that by blaming the City of London, they have an entire continent fooled.

To understand what has happened in Europe in the last week, we must borrow from the rich and fruity vocabulary of Australian political analysis. Let us suppose you are losing an argument. The facts are overwhelmingly against you, and the more people focus on the reality the worse it is for you and your case. Your best bet in these circumstances is to perform a manoeuvre that a great campaigner describes as “throwing a dead cat on the table, mate”.

That is because there is one thing that is absolutely certain about throwing a dead cat on the dining room table – and I don’t mean that people will be outraged, alarmed, disgusted. That is true, but irrelevant. The key point, says my Australian friend, is that everyone will shout “Jeez, mate, there’s a dead cat on the table!”; in other words they will be talking about the dead cat, the thing you want them to talk about, and they will not be talking about the issue that has been causing you so much grief.

That is exactly what Brussels has done with this recent gambit to cap bankers’ bonuses. Look around Europe and you can see the continuing catastrophe of the single currency, an ideological project that most Europarliamentarians and most of the EU establishment continues to support with vengeful fervour.

In Portugal over the weekend, 200,000 people gathered outside the finance ministry to protest against the biggest tax hikes and the biggest cuts to public services in living memory. Young Portuguese are growing up to face a life on the dole. In Brussels the cold autocrats have no answer to Portuguese pain. They cannot solve the problem. They are the problem. So what can they do? They chuck a dead cat on the table, and blame the bankers in London.

In Spain, unemployment has now hit 26 per cent – that is one in four Spaniards who must live with the humiliation of feeling economically unwanted. The Spanish economy has been contracting steadily for seven successive quarters, and Spaniards are now regularly seen rifling through rubbish bins in search of food or bits of metal to sell. There has been nothing like it since the 1930s.

Can Europe do anything to help the Spanish, as a generation is maimed on the Procrustean bed of the euro? Of course they can’t. They can’t admit that the whole concept of the single currency was flawed, or that it was always cruel and mad to expect the Mediterranean countries to share an exchange rate with Germany. That would be too much of a surrender. So they find a convenient distraction, like Stalin blaming the Kulaks for his crazed totalitarian policies, and they bash the bankers in London.

Look at Greece, a country that should be holy to us all as the birthplace of European and Western culture, the home of freedom and democracy, where Phoebus rose and Delos sprung. It is utterly barbaric that Greece should continue to be subject to such treatment, but on it goes. Last week they announced that major drug companies are no longer supplying Greek pharmacy chains with the kind of preparations that most civilised countries take for granted. Pills that deal with arthritis, hepatitis C, hypertension, cholesterol, heart attack – they are all being withheld until the Greek government pays its bills.

The country is being starved of antibiotics, for heaven’s sake. The Red Cross has cut its supply of donated blood, because it hasn’t been paid on time. What is Brussels supposed to tell the Greeks, in their agony? That they must keep taking the medicine? They haven’t got enough blooming medicine to treat everyday diseases. No wonder semi-fascist parties are on the rise in Athens. So what do the MEPs do, when they behold the pain – the physical suffering – being endured by innocent Greeks? They chuck a dead cat on the table, and have a pop at the bankers in London.

Look at Italy, where the biggest winner in last week’s chaotic elections appears to be a stand-up comedian who has lost no time in pointing out that the country’s debt is an unsustainable 127 per cent of GDP (and up from 110 per cent when Mario Monti took over), and that they may have to junk the euro and go back to the lira. In fact, says Beppe Grillo, it may be time to have a referendum on Italian membership of the euro.

A referendum! The very word is one, as we all know, that causes the Eurocrats to choke on their Douwe Egberts and spray the room with fragments of hysterical Speculoos biscuit. Mon dieu, dio mio, Gott in Himmel, they cry. Anything but democracy! What can they say when this idiot savant continues to blurt the truth about the euro and Italy’s inability to deal with its debt? There is nothing to say – nothing to do but to cause a diversion, bash financial services in London, and thank the lord for the 101 uses of a dead cat.

It’s a cunning manoeuvre, of course. It reminds everyone of the undoubted role of arrogant financiers in helping to cause the crash. It focuses public attention on a group that has few defenders, and away from the catastrophic “austerity” policies pursued by the Troika of the Eurobank, the EU commission and the IMF. It causes a predictable hoo-ha. Some people will say that a bonus cap will cost jobs in London. Others will say that the bankers had it coming. Some will point out that financial services contributed £63 billion in tax revenues to the UK last year. Others will say, what the hell, we have been too dependent on finance for too long. Some will say that banking is indispensable to a global economy, and we will simply lose talent to cities outside the EU – Zurich, New York, Singapore. Let them go, the others will snarl, and there rises a general jabber of rage: kick them out! Tax their homes! Take their bonuses away!

And all the while the political classes will be distracted from the real problem – the continuing misery caused by the euro. That is the beauty of the dead cat manoeuvre. But as any campaign strategist will tell you, it won’t work for long.