Various Thoughts on EU, US and other affairs, June 1-5 (based on my tweets, (@npthinking):
Eurostat: 1st estimates for Q1 2010 GDP: Eurozone and EU +0.2% from Q4 2009, +0.6% and +0.5% respectively from Q1 2009.
2010: A year for rethinking the economic, policy, social, business, financial and other systemics of the world people live, work & do business in
In these ultra volatile times, chaotic regulations and laws make people's lives and the work of SMEs even more difficult and unstable.
In these ultra volatile times, policy makers in the EU, USA, etc must formulate policies and laws that provide more stability to people and SMEs
Euro at a 4 yr low against USD on Friday June 4 = good for Eurozone exports & tourism and less competition inside Eurozone from US, China etc. Most Euro crisis talk ignores the elephant in the room, ie the Eurozone "party" Chinese, US & other products had thanks to the expensive Euro! DM to Euro conversion rate was too high and forced GER to adjust internally but "overshot" and caused imbalances inside the Eurozone. The idea that the Euro could (or should) be as "strong" as the DM was unrealistic, unless the Euro only included Germany & "satellites". If indeed (as some argue) the Euro was established to "keep" GER in the EU, then that was a major strategic mistake. Euro/USD rates above 1.2 (1.3, 1.4) should have been averted by the ECB. They caused major competitiveness problems for Eurozone companies & sectors.
Did anyone alert Greek, Italian, Spanish, Portuguese, Irish, French even Belgian, Lux, Fin & Austrian firms they would have to go "German" to survive in uberhard Euro
How many other Euro members except NL are as infatuated with inflation and uber hardness of currency as Germany? The mere fact that 1 & 2 Euro were issued in coins rather than banknotes shows how needs of many members were not taken into account.
The German approach to monetary & inflation policy & single currency isn't the solution to the Euro's problems, au contraire it's the cause. Cheaper Euro is a blessing for all Eurozone firms with price elastic products and/or services; now more competitive both in Eurozone & world. For many years ECB opted for Euro pride (expensive Euro) and uber low inflation rather than competitiveness. Now Euro is priced for exports! Some seem to forget that the huge number of Eurozone firms that export mainly within the zone now have less competition from outside. They also assume that competitiveness must be based on a large corporations economic model; not so! And all those economies (USA, China, UK, etc) that were having a ball selling to the Eurozone are now sweating! How the world turns!
US & EU may not be Venezuela as some argue, but on the other hand, who would have thought in eg 2007 that many of their interventions in 2008-present would be so "socialist"?
"May you live in interesting times" was an Ancient curse (Chinese). Living in 2010 "fascinating times" is then a nightmare for many humans?
Who is afraid of (and/or despises) the European Social Models? There is a major difference between a) fine-tuning and b) de-composing the welfare systems in Europe (UK, Greece, Spain, etc)
If a member of the EU truly wants to participate in only a free trade system & nothing more then WTO rather than EU membership is the way!
One could argue that the stance of the US, UK, Germany & others re Turkey in the last decades was a significant factor in Greece's problems & 2009 crisis. Notably, Greece's main reasons for joining the EEC in 1981 & the EU's inner core (EMU) in 2001 were not economic but national security related. How many of the 27 members of the EU (ex-EEC) joined mainly for national security rather than economic reasons? Quite a few actually! In effect the 1957 establishment of the EEC (6 members) served firstly a security rather than economic goal, b/c of fail to launch the European Defense Community and the European Political Community. In other words, due to French assembly veto of the EDC, the EEC was in effect a political & defense community masked as as economic one!!
A key problem in the EU is that it relies on GER-FRA for most new ideas & initiatives. The mid & small size states must start leading more. The 27 must start working more as a team in the Council and European Council and that means more new ideas from small and mid size states. Read somewhere that Europe has too many countries for its size. Hm! Yet EU of 500 millions has 27 states whereas USA of 300 millions has 50 states
On Friday, the new Hungarian government vowed to avert Greece-Like Crisis. But the situation in Hungary and its causes crash the North/Central vs Mediterranean EU stereotypes!
Life's tough for incumbents in the US midterm elections in 2010!
Consider this: Is, after all, inward migration of human capital more useful to a country than inward foreign investment (direct and other). Globalisation was not meant 2 be best suited 4 the very rich & the very poor, effectively leaving the middle classes out of it. Yet it has. The global systemics and dynamics of this period are, sadly, both inhumane and irrational - philosophy. Globalisation can be made viable only via immigration freedom of the same level as free trade and free movement of capital
Most growth professions in the US are low skilled - low paid!
Americans and Europeans must realise that they live in a Services world, the industrial world has gone East.
Time for a major rethink of the economic as well as social mentalities - axioms of the industrial era
Is labour productivity supposed to be measured by the volume of sweat a worker emits per hour or workday?
Work models: a) work hard b) work smartly or c) word creatively.
Was the good ole "no pain, no gain" work motto a license for (work related) masochism?
If one takes "best practices" from different economies - countries and patches them up into a competitiveness model, one creates a monster! One economy's competitiveness model is another's model for disaster ie they are not to be copied
Is the crucial success - happiness factor nowadays the ability a) to change - adapt to changes or b) to live - feel at home in chaos?
Maybe the solutions to the problems of the Euro and the EU can be found somewhere between Plato and "Alexis Zorbas"
Localisation is not a viable alternative to Globalisation. But Regionalisation is & it is happening to some extent partly because Doha Round and other WTO failures.
I also re-iterate my view that an exit from the WTO could under certain circumstances be in the best interest of the EU (& of the US too).
Yes, Markets (of all kinds) r a useful tool but they do not "know best" nor are they "wise" not even that "rational" (often r drama queens). And of course policies, regulations & laws r very often faulty or at least imperfect. But no1 said Democracy was perfect, just the best one/ In a Democracy, citizens don't vote with their savings, investments or consumption. They vote in a voting booth, alone (no mob).
I re-iterate my view that it would be in Germany's national interest & the EU's for Mrs Merkel to re-do the grand coalition w SPD (2005-09)
The personality clash between A. Merkel & N. Sarkozy is not new. Press reports in recent yrs suggest completely different leadership styles. Nicolas Sarkozy is perhaps the most brainstorming leader in the "West" in a long time. That confuses many other leaders and their advisers!! On the other hand, Mrs Merkel's discussion with actor Simon Baker of "The Mentalist" during her recent visit to Hollywood is somewhat telling.
According to the Guardian Germany saves approx €10bn/year in transaction costs in the intra-Eurozone sales of its goods 12:28 AM Jun 3rd via web
Euro Economic Gov: Greece has an approx +2.5% GDP extra defense expense compared to Germany and NL due to the EU's non military union status.
"Merkel sees the crisis as not only about finance & economics, but as a clash of ideas, values & cultures" The Guardian
Eurozone economic "government" agreement should come with proviso that ECB stops acting like it's the Bundesbank, eg Euro/USD rate
French bid for euro zone "government" gains ground.
Helps dispel the "EU is bad for UK" myth: The Guardian: Britain top in Europe for attracting foreign investment. Which is not surprising considering that the UK acts as a trojan horse for US and other business to the EU single market