I never had much time for David Cameron. When he first became opposition leader in the UK, he was soon pandering to the greens and he tried to undercut a Tory tax policy group of which I was a member.
I was also unimpressed when one of his closest colleagues told me how Cameron would not sit next to Margaret Thatcher at a Tory function because he did not want to be seen to be associated with Thatcherism.
I may have to change my mind. By rejecting the latest European rescue plan it seems that Cameron has finally had to accept the Thatcher view about Europe.
Taxation without representation is anathema to democrats and transaction taxes are not the answer to Europe's problems. Cameron was right to say no.
The reality is that politics and economics in Europe leave a lot to be desired. It is not nearly as supportive of free enterprise as Australia. Its economic performance has been mediocre for decades. And European attitudes towards basic democratic values are different to ours.
I worked for six years in London in the European Bank for Reconstruction and Development (EBRD), which is owned by about 60 governments, but run by Europeans. The best thing I did whilst I was at the bank was to persuade Wayne Swan that Australia should sell its shares and leave the bank. Sadly, although the decision was publicly announced, Swan later changed his mind and Australia remains a member of the EBRD.
I believe that my reflections do not reflect a partisan Liberal or Labor view. I found that when I spoke to Australians from different party political interests, but with similar experience at the EBRD or other international banks, our views were remarkably similar.
Quite often at an EBRD board meeting, I would say "if this were a meeting of the Australian Cabinet, my boss, the PM, would say 'I doubt that this proposal would meet the barbecue test'". A lot of things that happened at the EBRD fell into that category. My UK and US colleagues were of a similar mind.
The EBRD was established to promote democracy and free markets. Its mandate was to facilitate the establishment of private banks and other private sector businesses in the countries that were liberated by the fall of the Berlin Wall. The idea was that once the banks were operational then the EBRD would withdraw because otherwise, instead of helping the new private banks, it would be competing against them.
By the time I left the EBRD, the bank was clearly in breach of its mandate to not compete with the private sector and it was operating in countries like Moldova that had no intention of becoming democratic. But no-one was prepared to force the bank to abide by its own constitution. The truth is that over time, the EBRD was captured by its management and the board and shareholders were bystanders. The incentives for directors were to take their tax-free income and enjoy themselves. When I caused a fuss by demanding better governance rules for directors, a European colleague took me out to lunch and said "Peter, we have a good life here in London. You should spend more time improving your golf". He was not joking.
The directors of the EBRD were nearly all public servants from treasury departments. Most knew little about banking. They were experts at self preservation. Most had sauntered from one international bank to another.
The trick was to start out in the developments banks unit of the home treasury. Then get a job as alternate director at, say, the Nordic Investment Bank, and follow up with the Council of Europe Development Bank in Paris and brush up on your French. Next, get a promotion to the EBRD in London, and finally, cap off the career as one of the nine vice presidents at the European Investment Bank (EIB). The EIB has a nice pension deal. Meanwhile the departmental pension was still being topped up even though directors were getting a double dip at the EBRD.
When I first arrived, the bank was opposed to transparent reporting of perks. The Belgian executive director even said on one occasion, that if the bank reported his salary in the annual report, as some of us proposed, he would make sure the report was never released in Belgium. The same attitudes to accountability are evident in Brussels and other European institutions like the EIB. Democratic supervision and accountability is so weak it is worthless.
I note that the new president of the European Central Bank is Mario Draghi who wasportrayed by Mike Carey in last week's Drum as a Goldman Sachs person because he had a job there for three years. Personally I do not see conspiracy in his history. I see unaccountable bureaucracy.
Draghi is one of a large number of bureaucrats who have spent their life on the merry go round of the European and international banks circuit. Mr Draghi has held board level positions or higher at the World Bank, the Bank of Italy, the Bank for International Settlements, the International Bank for Reconstruction and Development and the Asian Development Bank. They are all government quangos.
These institutions are, in essence, autonomous self perpetuating organisms unresponsive and unaccountable to anyone except themselves.
The British euro sceptics and Margaret Thatcher were right all along. There is a democratic deficit at the centre of Europe and, as we have seen already in this latest turmoil, the Europeans have no compunction in turfing out an elected government and installing a technocratic alternative.
So the bureaucrats are largely running the policy and none of them are too interested in free enterprise. Europe is weighed down with deficits. And no-one has been prepared to fight for the policies that might lift productivity and provide the revenue to pay the interest on their debts.
Europe has failed to face the reality of its economic situation for decades, so it is not obvious that they will do so anytime soon.
In organisations with little sense of responsibility or accountability, issues are normally avoided. When decisions are forced onto the board table, then those who disagree do not hesitate to obstruct the outcome.
This happened at the EBRD when the US, Australia, Canada and others, albeit in a minority on the board, pressured the EBRD to limit its jurisdiction. Consequently, there was a public declaration that the EBRD would concentrate on those countries with the greatest need. Within weeks, the eurocrats were undermining the decision. They were relentless and successful in overturning the decision without reference to the shareholders. They would not accept a decision that threatened their cosy existence. From my experience, even if decisions are made by the Europeans in response to their financial crisis, which I doubt, then there is no reason to be confident that the decisions will then be implemented.
Capitalism and free enterprise have their problems and so does democracy. But despite many imperfections, these concepts have lifted billions of people out of poverty and given them a taste of freedom that very few have enjoyed in the history of the world. The model depends on public participation from both consumers and citizens. It also depends on systems that provide incentives for good behaviour. The system best known to achieve that is a free market.
The incentives for the eurocratic elites in Europe are not sufficiently aligned to the public interest. This is a basic fault at the ERBD, in Brussels, in the EIB and elsewhere. The idea of a united Europe is still a good one and the free movement of people and capital within competitive markets is worth pursuing. But, based on my experience at an international bank run by Europeans, they are going to have to reengineer their political and democratic processes a lot more than they realise.
Sadly, in the meantime, Europe's problems of civil unrest and poor economic performance are going to impose economic hardship on a lot of innocent bystanders, including Australia.