Friday, March 4, 2011

Pact, reform, meetings, IP, jazz and inflation hawks

1) Some 36 hours before the EPP and Socialists' meetings in Helsinki and Athens to discuss the Merkel-Sarkozy competitiveness pact, a very important opinion article by Guy Verhofstadt, Jacques Delors & Romano Prodi re the pact appeared in the FT: Europe must plan a reform not a pact

One of the things that the Delors, Prodi & Verhofstad article misses IMO is that if European Commission is involved that means also UK & Czech Rep, ie won't lead to the type of breakthrough needed. But they are right that a pact is not enough!

IMO, and for political union! EMU of 17 or 27 cannot work w/o real single market & real federal budget - income tax! It's now or ....!

2) According to The National, the UAE and Qatar are to help out Spain

3) According to the CBI: UK IP is fundamental to growth.
IMO, Intellectual Property is the capital of the 21st century (as opposed to land & financial equity/bonds etc) but how does one defend it? Via ACTA??

4) The jazz (hype) re innovation reminds me of the jazz re HR (Human Resources & Human Capital etc) before the current crisis. All was forgotten when the crisis arrived!

5) According to France24 (EN) The French lament their shrinking role on world stage
C'est la vie? IMO only EU can play such a role anymore, not France, neither the UK or any other EU country on its own.

6) BBC News reports that the ECB said that Eurozone interest rates could rise in April
The inflation hawks are out! Oh my! Are some in the Eurozone trigger-happy re anti-inflationary measures (ie raising interest rates)? Can the Eurozone afford anti-inflation mania?

If the ECB interest rate goes up next time (because of inflation-phobia?) what will be the effect on financing cost & access of SMEs & the GIIPS (PIIGS)? What is the effect on Eurozone firms' ability to a) export b) defend their markets since the Euro will rise vs USD, Yuan, Pound etc? Effect on jobs in the Eurozone?

So why this monolithic fear/phobia of inflation? For a long time now ECB interest rate is 1%, UK 0.5%, US 0.0-0.25%! So policy-wise, if the EU has higher propensity than UK & US for inflation consider that maybe that is because of its incomplete single market & union! Who realises that the EU;s micros & SMEs (and people) need EU-wide single laws in everything for the EU to work and provide jobs?

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Nick

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