Tuesday, February 22, 2011

EU: Chinification, Economic Germanification or Balkanisation?

Name the Economy: Its major industries include growing of citrus fruits & grapes, fishing, oil production, electronics, information technology and films.

California!

Made in California and Made in the US in general pop culture (films, TV content, music, etc) have spread rapidly around the world in recent decades. Some call this phenomenon "Californication" (see eg The Urban Dictionary, "Western society's pop culture and media encroachment and spread all over the world. ....")

Yet the major trends or dynamics that are vying in Europe these days are:

1) Balkanisation of the EU, via the undermining of the Union in the name of a (selective, internally inconsistent) definition of sovereignty

2) Chinification (2011): China's econ-political encroachment & spread in the world via FDI and bond holdings by SWFs. This phenomenon has already spread in the US and in the EU it is currently most visible via the offer of "help" via the purchase (by China's state controlled Sovereign Wealth Fund) of state bonds of in-crisis Eurozone members.

The latest trend-dynamic is:
3) The 2011+ Economic Germanification of the Eurozone via the spread of the German economic model to the other Eurozone members: The German-French "competitiveness pact" is an excellent example of this dynamic. For more on the rationale see eg Spiegel Online International (Jan 31, 2011) "An Economic Government for the Euro Zone?".

Which of the three dynamics has a better chance of "success"? Is there a fourth way for the EU?
On verra!

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BRs
Nick

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