Monday, 28 February 2011

Single what? For whom?


1) Speaking today is Paris, the French EU Commissioner who is in charge of 2 key portfolios, Internal Market and Financial Services, M. Michel Barnier said inter alia that he does not want protectionism but economic realism.

EU economic realism should IMO mean a request and achievement of reciprocity in 4 freedoms by others in the world arena, from USA and China, to India, Russia and anyone who wants to have relations with the EU, economic or other.

Should the EU threaten to leave the WTO & rely on bilateral reciprocity? IMO, that is not an out of question scenario/option, in these zany times. systemics and dynamics.

Let me add that M. Barnier also said that the Americans are always surprised that the EU does not demand commercial reciprocity.

On the other hand , on the always hot issue of migrants and human rights, it is my opinion that migration should be free among WTO members! Future historians will refer to our era as "New Middle Ages", because most of the sum of policies in EU, US and world re asylum seekers & economic migrants constitute "apartheid"!

As per financial regulation and reform in the EU, M. Barnier said in his same speech that it is on a good path (une bonne voie)? I am curious whether the Commissioner has watched the "Inside Job" Oscar winner documentary of Fin/Wall St!

The size of the EU's population (500,000,000) and single market should indeed be exploited IMO:
a) For the EU to implement not simply reform but an overhaul based on a total rethink of the financial industry.
b) Promote free migration (in all directions) within the WTO membership.

(an interesting point made by M. Barnier: Monnet et Schuman ont eu une idée incroyable: cimenter l'envie d'être ensemble par l'intérêt d'être ensemble)


2) The EU 27 (& its single market) have 21+ languages. What is max no of languages a person can speak? What % access these can offer him/her to the "EU single market"?
How many English speaking jobs are available in EU minus UK & IRL?
How many French speak one outside FR, Wal, Lux? German?

Maybe being a EUropean is impossible after all, b/c no human can speak 21+ languages! Knowledge of other European languages (and which & how many) is the wider strategic EU question!

Examples:
Does speaking EN, FR & GER but not the national languages get an EUropean a job in 20.5 of the 27 EU member states?
Does speaking EN, FR, GER, SP & IT (5!) but not the national language(s) get an EUropean a job in 18.5 of the 27 EU member states?

Thus can the EU ever achieve a Single Market as far as jobs are concerned? Due to many reasons, with 21+ languages being No1, by far!


3) IMO the problems in IRL & GRE are partly evidence of the failure of an alleged #EU single market, for many reasons & factors


4) By awarding an Oscar to the documentary Inside Job re Wall St. the members of the Academy IMO made a clear statement!


Saturday, 26 February 2011

Is the Euro or the global financial system the one in crisis?

Policy:

The solution to the Euro crisis" is IMO neither an exit of any member from the Eurozone or any "haircut"! The solution is Economic & Political (i full) union of the EU or the Eurozone!

Why?

In the last few years what we have actually seen the failure of the global financial system, not of the Euro!

Only a fully united EU or Eurozone can lead to Democracy over Financial Agorocracy result.

Europe must lead in this "revolution"!

Thursday, 24 February 2011

Mobility key to EU Single Market & competitiveness

Low intra-EU mobility of workers, free lancers &job seekers continues to be the Achilles heel of EU Single Market & EU competitiveness

Some comments re the German-French competitiveness pact

As the first Eurozone Summit of March 11, 2011, is approaching, along with the preparatory meetings of the EPP in Helsinki and the S&D in Athens (both on March 4), much remains unclear about the essence and the format of the German-French competitiveness pact. An article yesterday in the euobserver.com, "Poland backs Franco-German pact, but wants in on talks" raises some of them.

Here are my comment re the pact at this stage:

1) I am not a legal expert but: The 11/3 meeting of the 17 seems to have IGC nature, hence European Commission initiative (aka "Community Method") maybe not a must

2) Not clear to me whether decisions will be implemented via new EU Treaty or via a Schengen type of instrument (ie non-EU, at least at first)

3) A "new EU", inside or outside the existing EU may in effect be in the making, with 17 or more or less members!

4) IMO at this state it is important that all 17 feel that they can have an input to the contents of the beef of the actual pact

5) Maybe even a new Commission type of institution may be estabiished for this new entity of the 17+/-, who knows?

More, this time on essence of the pact:

The elimination of linking of wages to inflation may be done via national laws but many members, including Germany have a long tradition of collective bargaining for wages by social partners at various levels, including the national (eg Greece), national sectoral, national professional, regional sectoral, regional professional, company, etc. How does this affect them?


Tuesday, 22 February 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!

Tuesday, 15 February 2011

Full union at EU or Eurozone level the only way for a real Single Market

Since the EU has the factor of many official languages, to get a real Internal Market it needs more unification than the US (which has 1 official language).

If Merkel, Sarkozy et al (see "competitiveness pact" presented to the other 15 during a closed lunch meeting of the Eurozone 17 during the European Council of Feb. 4) want a truly competitive Eurozone, they must merge their fiscal, taxation & other systems. Ie full union. The only way.

A real EU Single Market: How can entrepreneurship flourish in the EU & the Eurozone with 27 and 17 different company & personal taxation systems & bilateral (instead of EU or Eurozone) agreements for double tax avoidance? Who can call this thing a Single Market? For whom/what?

Because:

18 years after 1/1/1993, is the EU Single Market still a myth rather than reality for the average EU firm? IMO, yes, a myth, still.

A single market from Cyprus & Rhodes to Limerick and Lisboa to Helsinki. When will we finally have it, for real?

Eg how many EU firms (esp SMEs) do business with most or all 26 other "parts" of the alleged EU Single Market?

Thursday, 10 February 2011

Sovereignty in the 21st century and the German-French competitiveness pact!

A) Does this pact interfere with the Sovereignty of some member states?

"Sovereignty" needs to be re-defined, in terms and factors that are relevant in the 21st century. For example, borrowing from foreigners undermines Sovereignty., especially when the "real" investors are foreign governments/states (eg the Chinese Communist Party).

Sovereignty also depends on an entity's (eg country or EU) level of self-sufficiency in for rxample staple foods, energy and other basic elements that can keep it running in times of internal, regional or global crisis (eg the 2008 global staple foods & oil prices crises).

In that respect one can start talking of the Sovereignty of the EU (or the Eurozone17) as more achievable in our global and volatile era than that of its individual members!


B) The competitiveness Pact: EU or Eurozone based? EU framework or outside it (eg like Schengen)?

Germany has been complaining that other EU or Eurozone members want "its money" but not its ideas.

Recently it was also argued by various commentators in Germany and abroad, that the German economic model has gained appeal (eg to France).

IMO one should not forget how we got here.

That Germany and its influence on Euro monetary policy ie a "fixation" (by German central banking etc) with low inflation led to high Euro interest rates that led to an expensive Euro that led to suffocation of some many Euro firms & products by Chinese, US as well as UK and German ones in large part of the previous decade is as responsible as anyone for the 2010+ Euro crisis!

That except maybe for the NL, other Eurozone economies did not have much experience in producing exportable goods with high value/price ratio. But how many such "German" products can the EU and world markets absorb (and at what prices), should all of Eurozone17 becomes "German" (in economic modelling terms).

The pact cannot be part of the EU framework because the UK is part of the EU and would block economic governance rules to be included in the EU legal framework (even only for Eurozone members) or ask for "things" in return.

Hence a Schengen -like, outside the EU framework, pact becomes the only solution, partly because of the UK!

Why is Germany the one leading it? Among other reasons, because, alas, the 27 and even the 17 have not yet learned how to work as a team or delegate to such as the European Commission, etc.

C) The Bottom Line: Something must give

Hence, in a full of oxymora and Catch 22s (as always) crucial period for the history and future of Europe, Germany and France, 2 of the 6 founding members of the EEC( & 2 other original communities), had to take the lead, tactfully or not.

Not the best way possible, IMO, but necessary under the circumstances.

Could/can 17 sit down and elaborate a plan, w/o a draft from 1-2 of them first? In theory of team dynamics, it is possible, in practice though, very hard.

Anyway, let's see what additions and amendments the other 15 propose on March 11 (at the 1st Euro Summit)!

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