Market Strategist John Mauldin - Behold Politics

Gibraltar is a British Overseas Territory.

It has an area of 2.6 square miles and juts from the southern tip of the Iberian Peninsula, overlooking the entrance to the Mediterranean Sea. Roughly 30,000 people live in the territory, whose sole distinguishing feature is the very large rock which runs along the eastern edge of the territory and culminates in a dramatic promontory in the northeastern corner.

That's it there, on the right ... see?

Gibraltar was captured by an Anglo-Dutch force in 1704 during the War of the Spanish Succession, in which European countries fought each other over who had the right to succeed King Charles II as ruler of Spain.

Charles (or Carlos) had died without heirs, bringing to its final extinction the mighty House of Habsburg, which had dominated European royalty for three centuries. In his will, Charles had designated his 16-year-old grandnephew Philip, Duke of Anjou, as his successor.

Philip was the grandson of the reigning French king, Louis XIV, the famous "Sun King"; and the prospect of an early 18th-century Franco-Spanish alliance at the heart of Europe was unnerving to others, who saw it as potentially destabilizing the delicate balance of power; and so, as Europeans tended to do in the days before they got around to creating the EU, they opted to fight a war.

This war turned out to be quite the bar brawl, spilling out of Spain and into Germany, the Netherlands, and, somehow, America, as the French and the English fought each other in Florida, New England, Newfoundland (huh?), and Carolina.

(Thankfully, the prospect of an Hollande/Rajoy alliance at the heart of today's Europe would provoke nothing more than uncontrollable laughter, so Europe is far safer now; but then it was a different world.)

Anyhoo, as part of the Treaty of Utrecht, which ended the Spanish War of Succession in 1713, Spain got a French king after all (Philip V), but he was required to relinquish all future claims by his family on the French throne; various French princelings were forced to give up all present and future claims to the Spanish throne; Savoy was given Sicily; Charles VI of Austria received the Spanish Netherlands, Naples, Sardinia, and most of Milan; Portugal was handed a chunk of the Amazon rainforest ... and Great Britain got Gibraltar.

Big whoop!

Personally, if I'd been negotiating the deal, I'd have stuck it out for Naples, Sardinia, and Milan, but ... whatever. Gibraltar was better than nothing. Probably.

Funnily enough, as the years have passed, the Spanish have from time to time reasserted their claims to the rocky promontory that juts out from mainland Spain, 80-odd miles southwest of another town annexed (albeitUNofficially) by the British — Marbella. And who can blame them?

Gibraltar is to Spain as Cape Cod is to Massachusetts or Baja is to California — only with more monkeys.

Referenda proposing a return to Spanish sovereignty were held in Gibraltar in 1967 and 2002, and one would have to say that the results could certainly be classified as "conclusive."

The 1967 referendum on whether to pass under Spanish Sovereignty or remain part of Great Britain left little room for doubt:

Thirty-five years later, the 2002 referendum, which asked "Do you approve of the principle that Britain and Spain should share sovereignty over Gibraltar?" was equally one-sided:

Whatever your view on the Gibraltar issue (assuming you can be bothered to have one), it's pretty hard to argue with 98.48% of the voters in a (supposed) democracy; but with things in Spain being quite tight and Catalonia looking to become a new Gibraltar all of its own, the Rajoy government clearly felt that a little distraction was in order; and so "tensions" in the Strait have escalated in recent months, with Spanish-imposed delays at border crossings that would make Chris Christie's staff salivate (no need for subterfuge HERE). And, of course, in response quite by coincidence, there have been the requisite "naval exercises" conducted by the British Royal Navy off the coast of "The Rock."

In early January, however, after the mood had darkened considerably over waiting times to cross the border between the Territory and the Mainland having stretched to four hours (Fort Lee residents, the people of Gibraltar feel your pain), another amazing coincidence occurred when certain diplomatic documents relating to discussions on Gibraltar were declassified by the British Foreign Office. Within these documents detailing exchanges between King Juan Carlos of Spain and the then-British Ambassador to Madrid, Sir Richard Parsons (no relation to Nicholas), was a revelation:

(UK Daily Telegraph): King Juan Carlos of Spain told Britain that Spain "did not really want" Gibraltar back as it would lead to claims from Morocco for Spanish territories in North Africa, newly declassified documents from the 1980s released by the Foreign Office reveal.

The King of Spain admitted privately in a meeting with the then British ambassador to Madrid, Sir Richard Parsons, that it was "not in Spain's interest to recover Gibraltar in the near future."

If it did so, "King Hassan would immediately reactivate the Moroccan claim to Ceuta and Melilla," the monarch, who celebrated his 76th birthday on Sunday, reportedly said during the meeting in Madrid in July 1983.

Fascinating stuff, but that's not the passage that contains the revelation.

This is:

In a confidential dispatch from Madrid to Geoffrey Howe, the then Foreign Secretary, Ambassador Parsons wrote: "The King emphasised, as he had done with me before, that that requirement was to take some step over Gibraltar which would keep public opinion quiet for the time being.

"It should be clearly understood in private by both governments that in fact Spain did not really seek an early solution to the sovereignty problem.

"If [Spain] recovered Gibraltar, King Hassan of Morocco would immediately activate his claim to Ceuta and Melilla.

"The two foreign ministers should reach a private understanding between each other, differentiating between their actual aim and the methods used to propitiate public opinion on both sides."

Did you spot it? No?

Well here it is again in slow motion:

"T h e t w o f o r e i g n m i n i s t e r s s h o u l d r e a c h a p r i v a t eÂ
u n d e r s t a n d i n g b e t w e e n e a c h o t h e r, d i f f e r e n t i a t i n gÂ
b e t w e e n t h e i r a c t u a l a i m a n d t h e m e t h o d s u s e d t oÂ
p r o p i t i a t e p u b l i c o p i n i o n o n b o t h s i d e s."

... and here's the super-slo-mo close-up frame (if you have 3D glasses, put them on now):

"... P R O P I T I A T E P U B L I C O P I N I O N ..."

Let's go to the dictionary:

pro·pi·ti·ate transitive verb \prŠ-pi-shÄ“-Ät\ :
to make (someone) pleased or less angry by giving or saying something desired

Behold, politics.

Sometimes, in cables amongst themselves, politicians tend to forget that "real people" will eventually get to read their words (either that or they realize but just don't give a damn), and they drop the facade and talk in real terms.

Sir Richard Parsons' words, translated, are telling:

The two foreign ministers should work out what needs to be said to keep the public happy whilst they simultaneously pursue a completely different agenda — one which they feel best benefits the political ambitions of each side.

Now, I'm not telling many of you something you didn't already know — although there may be a few amongst you who still believe that all elected officials are there for the good of the people — but to see how things look when the mask slips and the monster behind is revealed is important in what I suspect could be a seriously turbulent year politically.

Mark the dates May 22nd to 25th in your diaries, folks.

That is the time frame during which elections to the EU Parliament must be conducted this year, and the potential for the politicians and bureaucrats who creep backwards and forwards to Brussels (on expenses) to receive a major wake-up call increases by the day.

Historically, turnout at EU parliamentary elections has been abysmal fairly poor and has declined consistently to the point where, in 2009, the percentage of eligible voters who turned out to select representatives to the body that would go on making ever more decisions about how they would be allowed to live their lives was just 43%.

The result?

Well, the people of Europe got the parliament they deserved.

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Source: EU Parliament

Nowhere was that voter apathy greater than in the United Kingdom, where the hatred of what is seen by the British as European "meddling" has always led to a smaller turnout than that which determines the winner ofStrictly Come Dancing:

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Source: EU Parliament

The source of Britain's apathy has been a sense that, 24 miles away across the English Channel, there is a world of bureaucratic fools whose sole aim in life is to spend taxpayers' money on new ways to interfere with the lives of those taxpayers, by ruling on matters which those taxpayers find, at best, irrelevant.

We have trod this turf together before, but the EU is a writer's best friend when it comes to ridiculous rulings. These fools certainly know how important it is to call a spade a manually operated, metal-and-wood-composite, earth-moving implement. Take this ruling on the correct nomenclature for wine fruit-derived alcoholic beverages from produce sourced outside the EU:

(The Parliament.com): The EU has been accused of not allowing a wine to be called wine because it is made from grapes sourced outside the EU.

According to EU law, an English wine produced in Kent by Chapel Down & Wines of Argentina cannot be classified as a wine.

This is despite it being made of Malbec grapes air-freighted to the UK from Argentina.

As a result, the wine owner has been told he must call it a "fruit-derived alcoholic beverage from produce sourced outside the EU".

Or this one on the correct presentation of olive oil:

(UK Daily Telegraph): In the middle of an economic crisis and a collapse in political confidence in the European project, an EU committee has found time to ban the serving of olive oil in dipping bowls and from re-filled jugs in restaurants. From now on you will have to douse your bread in pre-packaged, factory bottles with a dispensing nozzle and labelling that meets the EU's standards.

The official explanation for the move is that it is to improve both hygiene and the "image of olive oil" within the EU....

It also says something about the size and ambition of the European Union that it now takes an interest in how people put oil on their bread.

As I said, easy pickings for the writer but fun all the same. In fact, here are a couple more, (courtesy of the UK Daily Telegraph, who regularly mine this particular vein of news); and we'll begin with that most dangerous of items, bottled water:

(UK Daily Telegraph): Brussels bureaucrats were ridiculed yesterday after banning drink manufacturers from claiming that water can prevent dehydration.

EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

Having saved the citizens of the EU from the dangers of believing that bottled water might rehydrate them, the Commission turned its attention to another potential peril, mislabeled Cornish pasties:

(UK Daily Telegraph): The infamous bureaucrats of Brussels have made another baffling judgment on the nature of food, ruling that a swede can be called a turnip when it's in a Cornish pasty.

[European Commission] Officials have decreed that only minced or diced beef, sliced potato, onion and swede are allowed to fill the pastry.

However the Cornish are unusual in referring to swede as turnip, even though they differ markedly. The former is white with a sharp taste while the latter is orange with a more earthy flavour.

Because of this linguistic quirk, the regulations have been amended to allow either term to be used on the label although only one of the two is allowed in the pasty.

This will mean that genuine Cornish pasties will be allowed to go on sale advertised as containing turnip, but will break the rules if they actually do contain the rogue root vegetable.

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