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Friday, September 21, 2012

Spain moves closer to bailout as government leaks planned pension cuts

Sources reveal Mariano Rajoy plans to save €4bn a year as part of strategy to pre-empt eurozone's conditions for help

Spain crept closer to a bailout as the government leaked plans to cut pension spending and senior bankers and business leaders called for the prime minister, Mariano Rajoy, not to postpone his decision too long.

Spain will cut up to €4bn (£3.2bn) of spending a year by freezing pensions and forcing workers to retire later, sources close to the government told Reuters.

The leak on Friday was part of a strategy by Rajoy's government to hurriedly put into place as many as possible of the changes that eurozone countries might demand before signing a bailout agreement with them. A new set of proposals will be announced next week, along with the budget for 2013.

Rajoy's centre-right government hopes this will allow Spain to sign a deal with fewer conditions imposed by Brussels, making the bailout easier to digest for ordinary Spaniards who are fed up with government austerity measures and soaring unemployment.

Greece, which is negotiating with the troika of the EU, European Central Bank (ECB) and International Monetary Fund (IMF), played down speculation that negotiations over its second bailout would be delayed until after the US elections.

Officials said talks were continuing and the Greek parliament would be given a full list of spending cuts and tax rises by next week.

Concerns that the €11.5bn of savings in Greece will be rejected by parliament were heightened this week when several senior ministers warned they would resign if plans for 50,000 public sector job cuts are included in the austerity package.

International bondholders, which have loaned peripheral eurozone countries hundreds of billions of euros, fear that delays over negotiations in Athens and Madrid will cause greater political instability and undermine efforts to reduce debts and push through changes.

On Thursday the head of one of Spain's biggest banks, BBVA boss Francisco González, called on the government to ask for the bailout as soon as possible.

The ECB announcement that it would buy bonds to drive down borrowing costs in Spain or any other country that agreed a bailout with the eurozone's rescue fund has already lowered bond yields, allowing Spain to continue financing itself on the markets – but at relatively high interest rates.

That has given Rajoy's government breathing space and some observers now expect him to wait for a bailout until after 21 October elections in the northern regions of Galicia and the Basque country.

Others believe he will act before the ratings agency Moody's decides this month whether to downgrade Spain's debt to junk status.

The head of Spain's employers' federation, Juan Rosell, also called for the government to act, but asked it to negotiate carefully and unhurriedly to make sure conditions were not stifling for the economy.

His organisation has already warned that Spain's economy, which is set to shrink 1.7% this year, will suffer the same sort of decline in 2013. As a double-dip recession drags on, unemployment will rise from 25% to 26.5%, it says.

The government reportedly hopes that it can reduce the impact of a bailout even further by asking eurozone countries to allow it to draw on a €100bn rescue package set aside for Spain's ailing banks.

The banks may take only half of that sum and the terms agreed with the European Financial Stability Facility allow for Spain to ask for whatever money is left to be used for something else. Terms might be agreed quickly and could allow the ECB to start buying Spanish bonds on the secondary market. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


Greek Opinion Poll Gives Opposition Syriza Party Narrow Lead

Greek Opinion Poll Gives Opposition Syriza Party Narrow Lead
Greece's main opposition Syriza party would have a narrow lead over Prime Minister Antonis Samaras's ruling New Democracy party if elections were held now, a Metron Analysis poll for tomorrow's edition of Ependytis showed. Syriza would get 27.7 percent ...

and more »


Italy, Greece Insist on Safeguarding Eurozone

Italy, Greece Insist on Safeguarding Eurozone
ABC News
The leaders of Italy and Greece are insisting on the "absolute need" to preserve the eurozone, as Greek politicians struggle to put together an austerity package critical to the country's financial survival. Italy's Premier Mario Monti met Friday with ...

and more »


Greece grapples with Golden Dawn's shadow

Greece grapples with Golden Dawn's shadow
Financial Times
Greece has also tightened security along its northern border with Turkey, the main illegal entry point for immigrants heading for the EU, citing fears of a big inflow of refugees from the conflict in Syria. Golden Dawn members have been accused by anti ...

and more »


Turkish court finds 330 military staff guilty of attempted coup

Sentences to range between 15-20 years for officers as civilian government flexes muscles against once-supreme army

A Turkish court has convicted 330 former and current military officers of plotting a coup to overthrow prime minister Tayyip Erdogan's government.

The court earlier sentenced three former generals to life in prison, which was reduced to 20 years each because the coup plot was unsuccessful, and two serving and one former general to 18 years.

Sentencing is still to come for the remaining 324 defendants convicted of a role in the plot.

The court earlier acquitted 34 officers in the case, which has underlined civilian dominance over the once all-powerful military in Turkey.

The "Sledgehammer" conspiracy is alleged to have included plans to bomb historic mosques in Istanbul and trigger conflict with Greece to pave the way for an army takeover.

Prosecutors had demanded 15-20 year jail sentences for the 365 defendants, 364 of them serving and retired officers.

The Turkish army has traditionally played a dominant role in politics, staging three coups between 1960 and 1980 and pushing the country's first Islamist-led government from office in 1997.

Its authority has been reined in sharply since Erdogan first came to power nearly a decade ago and the trial has been seen as a show of strength by a government that has emerged from its shadow. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


Greece's Samaras says euro exit not an option, would be disaster


Greece's Samaras says euro exit not an option, would be disaster
ROME, Sept 21 (Reuters) - Greece leaving the euro zone is not an option and would be a disaster, its Prime Minister Antonis Samaras said at a meeting of Christian Democrat leaders in Rome on Friday. "An exit from the euro zone is not a choice for ...
Greece's Muslim Leader Says Samaras RacistGreek Reporter
Head of Muslim Union labels Samaras Greece's biggest racistKathimerini

all 8 news articles »


Is This Election A War For America's Soul?

Decoding South Park's Lessons for Voters What South Park & the Ancient Greeks can teach us about presidential elections Over the Labor Day holiday, our house was overrun -- I mean blessed -- by the arrival of my in-laws. Conversation stayed mostly banal but suddenly turned political when my brother-in-law summed up his view of [...]


Ukip conference and Nigel Farage's speech: Politics live blog

• Nigel Farage's conference speech - summary

3.08pm: The economist Roger Bootle is addressing the conference now. He says that the creation of the euro was a mistake and that the best solution would be for Germany to leave. What's more likely to happen is that another country beginning with G (Greece) will leave, he says. Bootle, of course, won the Wolfson Economics prize for working out a method as to how this could happen.

2.49pm: Timo Soini, the leader of the True Finns party (a Ukip sister party in the European Parliament) has just finished speaking now. Their electoral success last year generated the kind of political earthquake, apparently, that Farage wants to achieve here. His speech included references to at least two Tory heroes. Describing the Eurocrats as "pillocks", he praised Margaret Thatcher and inverted one of her best known sayings.

I think they [the Eurocrats] hated your prime minister so much that they decided to do exactly the opposite in every single detail ... Where there is harmony, they will bring discord. Where there is truth, they will bring error. Where there is faith, they will bring doubt. And where there is hope, they will bring despair.

He also ended by quoting Churchill: "We will never surrender."

2.22pm: Tim Congdon, the economist, has just finished addressing the conference. He has recently produced a 56-page report called How much does the European Union cost Britain? and it claims that EU membership costs Britain around 10% of GDP, or £150bn. It is the latest version of a report that Ukip has been producing annually and Congdon said that he wanted it to become "the best document produced by a political party in the country".

So it's a shame that I can't find a link. There's a brief summary at the Better Off Out website, but I can't find a link to the whole thing.

Congdon attributes half the cost - 5% of GDP - to regulation. I haven't had time to read the whole document, but his methodology seems open to challenge, to put it politely. In the chapter on the costs of regulation, he quotes an EU commissioner in October 2006 putting out a statement "which invited the interpretation that the annual cost of EU regulation was 600 billion euros, or 5% of GDP". Perhaps it invited other interpretations too, but I don't know because I have not had time to check. And the report also says that Peter Mandelson told the CBI in 2004 that EU red tape cost 4% of GDP. After a quick search, I've been unable to find the quote to back it up. Does anyone have the link? I used to cover CBI conferences regularly during that period and, if Mandelson did say that, I think I would have remembered.

1.58pm: In the past Ukip never used to receive much media attention, but this year it's rather different. There's a respectable media contingent, including the Today programme's Evan Davis and Channel 4 News' Michael Crick. Crick has been commenting on Twitter.

One of great things about UKIP conference is how it glories in its eccentricity - Union flag ties, colourful waist-coats, great moustaches

1.20pm: Here are the main points from Nigel Farage's speech.

• Farage said that Ukip's priority now was to ensure that Britain had a full in/out referendum on membership of the EU, not just a referendum on Britian having a looser relationship with the EU. None of the main political parties is yet fully committed to an EU referendum, but David Cameron has strongly signalled that the Tories would call one after the next election and it is widely assumed that the plans to renegotiate the EU treaties in the light of the Eurozone crisis will eventually lead to British voters being given a say on any new arrangements. Farage said a referendum was inevitable. But it was not the referendum Ukip wanted, he said.

I'm very, very worried about what I see. From David Owen to Liam Fox, what we're now seeing is the political class uniting around a position. The position is that we don't want to be part of this new federal superstate, but we do want to be part of the customs union, and we do want to be part of the single market and that there's nothing to fear from all those things because we won't be trapped inside a political union with Europe.

Well, I've decided to take that on and I've launched a booklet called A Referendum Stitch-up. Because what is happening is remarkably similar to what happened back in 1975 … when you were told it was a common market. They are trying to do the same thing again.

I think what Cameron will do, next week or the week after, is to say we can have a referendum on whether we join that full federal union, or whether we stay with the single market and a customs union. And that is a battle for us. We have got to go out there as a party and make the arguments. We don't want to be stuck inside a customs union that prevents us from making our own trade deals with the rest of the world, the growing parts of the world ... We in Ukip demand that this country is given a full, free and fair choice in a referendum, so that we can decide who governs Britain.

• He played down the prospects of Ukip entering into some form of electoral pact with the Conservatives before the general election. Ukip was an independent party, with its own agenda and its own candidates at elections, he said.

But if an opportunity came which meant we could get this country closer to walking through a door marked 'UK independence,' if we had the opportunity to do something that was in our national interest, we would be silly not to even consider it.

Farage said that talk of an electoral pact was coming from the Conservatives and that he personally would do nothing to "sell this party short".

The only way we would even consider a negotiation of any kind at all would be if first an absolute promise was made to give this country a full, free and fair referendum so that we could decide whether we remain members of the EU or not. That would have to be on the table before we even considered any proposal.

And we would possibly have a problem even then. Some of you may have noticed that there are one or two people in politics who make promises and then break them. So I don't think a cast-iron guarantee would satisfy Ukip. At the minimum, it would have to be written in blood.

What does "written in blood" actually mean? The only plausible interpretation must be "written in statute" - ie, the government would have to pass legislation before the 2015 election for a referendum afterwards. The chances of that are miniscule.

• He said Ukip's aim was to win the European elections in 2014.

By then we may well have the bones of a new treaty. We will have a political class doing their best to ignore the issued, doing their best to give us a fudged, stitched-up referendum. I think we will be in the driving seat for those European elections. I believe it must be Ukip's aim and goal to win those European elections in 2014, to cause an earthquake in British politics and to change the future of this country forever.

12.58pm: The conference theme music seems to be XTC's "Making Plans for Nigel". They played it at the end of Nigel Farage's speech, and it has been blasting intermittently through the main hall ever since. It's almost as catchy and annoying as the Clegg "sorry" song.

12.26pm: The Farage speech is over. I will post a summary shortly.

12.23pm: Farage says Ukip has not yet made a breakthrough in local elections. But next year it will fight more seats than ever. And it will use those as a springboard for the European elections, he says.

Ukip's goal will be to win those elections. He will work night and day to achieve that, he says.

12.19pm: Farage turns to the issue of a deal with other political parties.

Some of the press reporting is wrong, he says. Ukip is a full, independent party.

But Ukip would be "silly" not to consider something that might bring closer the chance of an in/out referendum.

All this talk of a deal with the Conservatives has not come from me. It has come from the Conservatives.

Clegg will go to Brussels before the 2015 election to replace Lady Ashton, he says. Under Vince Cable, the Lib Dems will float the idea of a deal with Labour. In those circumstances, if Ukip are 10% in the polls, the Tories will want to do a deal, he says.

Farage says he has worked to build up Ukip. He would not do anything to jeopardise its identity, he says.

Even if the Tories were to promise a referendum, that might not be enough. Some politicians do not keep their promises, he says. Any deal would have to be "written in blood".

12.17pm: Farage says the EU wants Britain to have an "open door" to the whole of eastern Europe.

That would be irresponsible with unemployment as high as it is.

And Britain should not be subject to the European court, he says.

That's why there needs to be a full in/out referendum.

12.10pm: Farage says Ukip is "not a one-trick pony".

It is reaching out to people concerned about things like windfarms.

But Europe is the key issue, and it is rising to the top of the agenda.

This week José Manuel Barroso, the president of the European Commission, gave a speech that let the cat out of the bag. He used the f-word (federation) for the first time.

The EU wants a constitutional change that would rule out the need for further referenda, he says.

Farage says Barroso called him "an extreme populist". And he said Ukip was irrelevant to the main debate.

Well, Mr Barroso, it is Ukip's intention to make you eat those words.

That gets the biggest round of applause so far.

He says the new treaty proposed by Barroso is so extreme that no UK party would back it. Even the Lib Dems would not support it, he says.

So a referendum on this question is inevitable, he says.

People might argue that that is good news.

But Farage says he is "very worried" by what he sees.

From David Owen to Liam Fox, we now see the political class uniting behind a political position.

There is growing support for allowing Britain to be part of a customs union with the rest of the EU.

He says Cameron will propose a referendum on whether Britain should be part of the full federal EU, or whether it should just be part of a customs union.

But this would stop Britain negotiating its own customs agreements with the rest of the EU, he says.

Farage says he wants Britain to be able to have a free trade deal with the Commonwealth. (This gets a very big round of applause too.)

12.07pm: Farage is speaking now.

Something has changed, he says. At the general election Ukip got 3% of the vote. But now they are up to 12% in some polls, he says.

What has changed? They have been lucky with their enemies, he says.

But it is not about individuals. People look at the three parties. "They look the same, they sound the same." And they look like college kids, he says.

Ukip is run by people with some understanding of the real world.

Ukip has also got better, he says. In the 1990s "it was a bit shambolic". But now it is more organised. It came second in the Barnsley byelection.

The Human Rights Act has turned justice on its head. People want a debate on that, he says.

People support Ukip because they see it as the voice of opposition on a whole range of issues, he goes on.

12.00pm: Lord Stevens is speaking now. He cites David Cameron's quote about Ukip being full of "fruitcakes, loonies and closet racists". (See 9.15am.) It's a pleasure to join you, he says.

He says he finally decided to join Ukip when Cameron told the Telegraph in an interview earlier this summer that he would never campaign for Britain to leave the EU.

He says Britain could have a perfectly good free-trade agreement with the European Union. There should be an in/out referendum, he says.

11.53am: Nigel Farage is on the stage now. He starts by welcoming to the stage three councillors who have defected to Ukip from the Conservatives. And he welcomes to the stage Lord Stevens of Ludgate, the former chair of United Newspapers, who joined the party this week.

11.38am: Back in the hall, Lord Hesketh is giving the warm up speech for Farage. Hesketh is one of Ukip's prize defectors; he was a minister in the Thatcher government and chief whip in the Lords under John Major, but left the Conservatives for Ukip last year. He mentions Neville Chamberlain (his grandfather was Chamberlain's PPS, he says) and he says Chamberlain deserves credit for keeping Britain out a slump in the 1930s because he spent money on rearmament. He says the whole of Europe is becoming disenchanted with a political class that cannot be trusted to tell the truth, and he suggests that Europe needs an 1848-style revolution.

11.33am: Farage claims that 75% of British laws come from Brussels. (See 11.16am.) But the House of Commons library has had a look at this issue and published a paper on it. Its conclusion is different.

All measurements have their problems. To exclude EU regulations from the calculation is likely to be an under-estimation of the proportion of EU-based national laws, while to include all EU regulations in the calculation is probably an over-estimation. The answer in numerical terms lies somewhere in between the two approaches, and it is possible to justify any measure between 15% and 50% or thereabouts. Other EU 'soft law' measures under the Open Method of Coordination are difficult to quantify as they often take the form of objectives and common targets. Analyses rarely look into EU soft law, the role of EU standard setting or self-regulatory measures.

11.16am: And here are some more lines from the various interviews that Nigel Farage has been giving this morning, in addition to the points he was making about the (very, very remote, it sounded to me) possibility of a pact with the Conservatives at the election. (See 9.28am.) I've taken the quotes from PoliticsHome.

• Farage said he had more respect for Boris Johnson than for any other leading Conservative politician.

I have to say I have a great regard for Boris, he is the only leading Conservative figure who stands up and says things that many UKIP members agree with ... When I hear him talking about the City of London and the fact that it is a rather valuable asset, he is closer to us, but he's not quite UKIP yet.

• Farage said Ukip were rightwing on some issues and liberal on others.

I think on economics, you can put us on the centre-right. But on issues of liberty - we're the party that believe in habeas corpus, we're the party that wants a smaller state. In that sense we're classical liberals.

• He said that most people joining Europe were coming over to the party from the Conservatives.

I think we have, since the last general election, got the Conservative party worried. A lot of people have come to us; some from the Lib-Dems, some from Labour, but the bulk that have come to us in the last two years from the Tories. They look at David Cameron and what they see is another brand of social democracy.

• He said Ukip's politicians had more real-life experience than the government's.

I think people think we're being run by a bunch of college kids. They look at UKIP and think, well they may not be perfect, but at least it's led and full of people who've run businesses and got experience of life.

• He said Nick Clegg would probably be gone as Lib Dem leader within two years.

• He claimed that schools do not teach pupils about British history or Christianity.

• He claimed that 75% of British laws originate from Brussels.

• He said that Ukip wanted to spend more money on defence because the cuts to the armed forces were "absolutely shameful".

• He said too many 18-year-olds were going to university.

• He said Ukip wanted a 31% flat tax on all incomes over £11,500. National insurance would be abolished under Ukip, he said.

10.52am: Nigel Farage will be speaking in about an hour's time. Before he starts, here's a Farage reading list.

• Nigel Farage told the Observer in a long interview earlier this year that Ukip could trigger a realignment of British politics.

Can he imagine 20 more years of [campaign for a referendum on EU membership]?

"No. But I would think in the next four to five years we will either win the big question as far as we are concerned, or we will succeed in realigning a segment of the British political scene."

An alliance with sceptical Conservatives?

"It's not completely impossible there will be some SDP-type moment, a coming together of different people over this one issue. Eventually, this question will have to be resolved."

• Nigel Farage told the Daily Telegraph in an interview last week that he wanted to ditch the pound sign as the party's logo.

Our pound sign has been a fantastically simple image. But now it is in my opinion represents a battle honour and not a forward looking aspiration for a party that wants to represent an independent UK.

• Tim Stanley at the Telegraph says Nigel Farage is the only person holding Ukip together.

The appearance of coherence is the genius of Nigel Farage. Farage is one of Britain's great everyman conservatives, with an innocent, unblinking expression that suggests a pug being gently squeezed from its middle. Like Boris or Nadine, "Nige" is an anti-politician. He visits lap dancing clubs, smokes, drinks and is alleged to have had an affair with a Latvian woman he met in a pub in Biggin Hill. The ordinariness defuses the potential extremism of UKIP's manifesto and injects some real world outrage into politics. There are too few conservatives like him left – men in camel hair coats who would abolish the income tax and swap the Channel Tunnel for a brick wall. But such is the power of Farage's joyful libertarianism that I wonder if UKIP would survive without him. It could either split into philosophical factions or, as it did under Lord Pearson, simply fail to generate attention.

• Farage tells Michael White in a Guardian interview that disillusioned Tory voters are turning to Ukip.

• Paul Goodman in the Telegraph says Farage's long-term goal is to split the Conservative party.

The Ukip leader has had testicular cancer, led his party before, stopped leading it, nearly died in a plane clash (while campaigning during the last election to win the Buckingham seat held by the Speaker), and come back to lead Ukip again. In other words, he is a tough old thing who gives his turbulent party momentum by sheer force of character. His contempt for Messrs Cameron and Osborne would curdle low-fat milk but, significantly, doesn't extend to the older generation of senior Conservative politicians, of whom he speaks with guarded respect. His plan is evident: to gain the In/Out EU referendum that would split the Conservatives in half, and to realign British politics, much as the Common Market referendum of 1975 did.

After all, a new force eventually emerged from the cross-party alliances formed during that referendum – the SDP. The Ukip leader evidently hopes that similar co-operation during another referendum would bring a similar outcome – that a No vote and Tory splits would divide the Cameroon leadership of the party from its base. The latter, joined with Ukip, would then morph to become the full-blooded Thatcherite party that even Lady Thatcher herself never quite led. Hence his recent decision to drop the party's long title and replace its pound-sign symbol. Hence, too, Ukip's support for grammar schools and opposition to gay marriage. Mr Farage is trying to wean his party off the EU issue alone, woo traditional Tory voters and park his guerrilla army on Mr Cameron's lawn.

10.20am: I've arrived. The press room at Birmingham town hall obviously doubles up as a broom cupboard, and so I'm inside the main hall itself, perched near the top of the balcony. According to Ukip, around 900 members are coming to the conference and there must be several hundred in the hall already. I couldn't get a seat downstairs. As I type, Mike Read, the former Radio 1 DJ, is speaking. He's already mentioned Churchill, and I've only been here five minutes. And he's winding up now.

It will soon be time to say once more: "The long night of European darkness is over. Good morning, Great Britain."

You get the gist ...

9.28am: Nigel Farage has been talking this morning about the possibility of Ukip doing some kind of deal with the Conservatives before the general election. His message has not been entirely clear.

At Euston this morning I picked up a copy of the Daily Express. It's not normally the first paper I turn to in the morning, but it has become the Ukip house journal and, sure enough, there on page two was a story about the speech Farage will give today. Here's how it starts.

UKIP leader Nigel Farage will today make a dramatic offer to David Cameron to form a pact with the Tories at the next General Election.

He will use his keynote speech at Ukip's annual conference to raise the prospect of an alliance at the polls.

But he will demand in return the promise of an in-or-out referendum on Britain's membership of the EU.

But then, when Farage was asked about this in his interview on the Today programme, this is how he started his reply.

I haven't offered a deal at all. What has happened here is in Tory circles they fear that the Lib Dems will move to the Left and will head towards Labour, leaving the Conservative party very exposed. They look at Ukip at 10% in the polls and they say 'we've got to do a deal with Ukip'.

Farage then went on the clarify his position, in a way that stands up the Express story. I've taken the quote from PoliticsHome.

I'm responding to many voices within the Conservative party, and what I've said is we're a different party with a different manifesto, but if we were offered a deal that made it easier to push open a door marked 'independence for the United Kingdom' of course we'd consider it.

But I wouldn't even contemplate doing a deal, even if it gave the party an advantage, unless we first had, written in blood I think, an absolute promise that we would have a proper referendum on our relationship with the EU.

As Macer Hall says in his Express story, there are some Tories who want their party to form some kind of non-aggression pact with Ukip at the general election.

Tory Euro MP Daniel Hannan said yesterday: "I'd like to move to a position where people who vote Ukip and people who vote Conservative at the moment can support the same candidates."

Earlier this week, senior Tory MP Brian Binley wrote on his internet blog: "Support for Ukip is growing. Conservatives and Ukip share a lot of common ground on Europe and a re-alignment with supporters of Ukip on the issue might also help win back some of the voters who abandoned us for them after the last election.

"We can't keep patronising Ukip as extremists. They represent the strength of feeling on an issue that is so important to the British people."

But on Twitter the Tory MP Therese Coffey said that Farage seemed to rule out a pact with the Conservatives only five days ago, when he was interviewed on the Westminster Hour. She's got a point. I've been listening to the programme and this is what Farage said when he was asked if Ukip would stand down at the next election in seats where Tory candidates were calling for an in/out referendum on Britain's membership of the EU.

No. Our intention is to fight every seat in the country at the next election. We are not just about Europe. We are about how we re-invigorate Britain once we've left.

9.15am: Today it's the Ukip annual conference and I was up early to get on a train to Birmingham. I've never been to a Ukip conference before. In fact, only a few years ago, any half-decent political correspondent volunteering to attend would have been dismissed by colleagues as an eccentric. That was in the era (2006) when David Cameron dismissed them as "fruitcakes, loonies and closet racists, mostly". Now they are still a minor party and they don't have any MPs. But they came second in the European elections in 2009, they are level-pegging with the Lib Dems in the polls and they exercise a potent influence on Conservative party politics. Anyone interested in the British political scene would be foolish to ignore them.

My colleague Martin Kettle explored this in detail in his Guardian column yesterday. He argued that, as the 2015 election approaches, there are two key reasons why Ukip matters.

The first is the Ukip factor itself. From 2009's 16.5% in the Europeans, Ukip slumped to 3.1% in the 2010 general election. A disastrous fall? Undoubtedly. The party crumpled.
But that 3.1% – still nearly a million votes – may have made some of the difference between a hung parliament and an outright Tory win. Small though it was, the Ukip vote exceeded the majority in 21 marginals the Tories failed to win in 2010, including Ed Balls's seat in West Yorkshire. If Ukip does as so many expect, and fares even better in the 2014 Europeans than in 2009, the Tory fear of a palpable Ukip effect in the 2015 general election will be even greater than before, even if Ukip's vote tanks again as it did in 2010. Any Conservative with a majority of 1,500 votes or fewer may be at risk.

The second reason why Ukip success matters is because of Britain's place in post-eurozone crisis Europe. The competition between the parties on whether to promise an EU referendum – and, crucially, what question it would ask – is already intense behind the scenes. Every Ukip success is likely to push that competition further towards an in-out referendum pledge. Even if that does not come about – and a referendum on a less cut-and-dried choice of the sort that is apparently preferred by David Cameron would certainly cause problems for Ukip – the momentum of the whole process is towards increased UK marginalisation within whatever remains of the EU.

At the Ukip conference in the Birmingham town hall today, the highlight will be the speech by Nigel Farage, Ukip's leader. Farage was on the Today programme at 8.10 this morning talking the possibility of a doing some kind of deal with the Conservatives before the next general election. I'll write a full post about his comments soon. He will be speaking at 11.45am.

But I will also be writing about the rest of the conference too. It opens at 9.45am and the full agenda is here. Ukip has in the past been vulnerable to charge that it's a one-man band, the Farage party, an outfit whose success is largely dependent on the efforts of one accomplished campaigner in a pin-striped suit. Today I want to see what the rest of them look like close up too.

If you want to follow me on Twitter, I'm on @Andrew Sparrow. I won't be updating this blog quite as regularly as I normally do when I'm writing my daily Politics Live, but there should be updates at least every hour. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


German tax intake surges, sparks budget debate

BERLIN (Reuters) - As the rest of Europe struggles with economic weakness, strong wage gains and low unemployment in Germany are fuelling a surge in tax revenues, and a vigorous debate about how to spend the windfall with an election just a year away. In its monthly report on Friday, the German finance ministry said August tax revenues had surged 12.8 percent compared to the prior year to reach 41.3 billion euros. While nearly one in four Spaniards and Greeks is out of work, Germany's unemployment rate stands at just 6.8 percent, close to its lowest level since reunification in 1990. ...


Italy, Greece insist on safeguarding eurozone as Greece tries to finalize ...

Italy, Greece insist on safeguarding eurozone as Greece tries to finalize ...
Washington Post
ROME — The leaders of Italy and Greece are insisting on the “absolute need” to preserve the eurozone, as Greek politicians struggle to put together an austerity package critical to the country's financial survival. Italy's Premier Mario Monti met ...
Greece should continue with 'all necessary reforms', says Mario MontiEconomic Times

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Greece and Spain squeeze pensions

Greece and Spain squeeze pensions
Evening Standard
Greece, locked in talks with the troika of the European Union, International Monetary Fund and European Central Bank over securing the next €31.5 billion (£25.2 billion) tranche of its €130 billion bailout, was said to have agreed to raise the pension ...
Greece and Troika unable to reach a deal on austerity package; Spanish yields
Deposit flight in Spain, Portugal, Ireland and Greece eroding euroDenver Post
European Leaders in No Rush as ECB Offers -New Europe
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Italy, Greece insist on safeguarding eurozone

Economic Times

Italy, Greece insist on safeguarding eurozone
ROME - The leaders of Italy and Greece are insisting on the "absolute need" to preserve the eurozone, as Greek politicians struggle to put together an austerity package critical to the country's financial survival. Italy's Premier Mario Monti met ...
21/09/2012Greece should continue with 'all necessary reforms': MontiExpatica Spain

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Italian PM Monti Praises Performance of Greek PM Samaras

Italian PM Monti Praises Performance of Greek PM Samaras
Wall Street Journal
ROME--Italian Prime Minister Mario Monti and Greek Prime Minister Antonis Samaras met briefly Friday and agreed that it was "absolute necessity to safeguard the integrity of the euro area," the Italian government said in a note. Mr. Monti also lauded Mr.

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Turkish court to give verdict in 'coup trial'

A Turkish court is set to hand down the verdict in the trial of hundreds of military officers accused of plotting to overthrow the Islamic-rooted government, the first ruling from several cases targeting the army. The two-year-long case is wrapping up at the court in Silivri, near Istanbul, which heard on Thursday the final testimonies of the suspects in the so-called "Sledgehammer" trial, named after a 2003 military exercise. Prosecutors have demanded up to 20 years in prison for the 365 military officers in the case, which concerns alleged army plans to bomb historic mosques in Istanbul and spark conflict with neighbouring Greece to facilitate a military coup. The defendants argued that...


Greek government fast-tracks Glasgow firm's planning application

Greek government fast-tracks Glasgow firm's planning application
Scotsman (blog)
“It is definitely the most-significant step yet in terms of bringing the project to fruition and demonstrates the Greek government's support for what is now recognised as a strategic investment for the country, one that we believe will yield ...

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Eurozone crisis live: Monti gathers leaders as Greek cuts talks resume

Leaders of Spain, Greece and Ireland are meeting Italian prime minister Mario Monti in Rome today to discuss the crisis


Greek Leaders Struggle With Spending Reductions


Greek Leaders Struggle With Spending Reductions
Greek Prime Minister Antonis Samaras struggled to clinch agreement with his coalition partners on an 11.5 billion euro ($14.9 billion) budget-cut package that's key to receiving international aid funds. Samaras was handed the third refusal in less than ...
Greek deal may be delayed past weekend: officialsReuters
Greek parties still unable to clinch deal on new austerity measuresWashington Post

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News Summary: Greek parties still unable to clinch deal on new austerity ...

News Summary: Greek parties still unable to clinch deal on new austerity ...
Washington Post
ELUSIVE DEAL: Leaders behind Greece's coalition government failed to agree Thursday on details of an austerity package that is crucial to the financial survival of the country. THE BACKGROUND: The Greek government has to come up with a package of ...

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