May 2011 in Europe (pop culture events)

May 6-8: Euroleague Final 4 (Barcelona) (basketball)

May 10, 12, 14: Eurovision Song Contest (Germany)

May 11 to 22 Festival de Cannes (film)

May 17 - June 5: Roland Garros (tennis), Paris

May 18: UEFA Europa Cup Final, Dublin

May 28: UEFA Champions League Final, Wembley Stadium, Londo

Night into the Night

Eurozone systemics: Some crucial considerations, beyond stereotypes

Can anyone deny the effects of the expensive Euro periods since 2002 on the economies, exports, tourism, competitiveness and budgets (tax revenues) of many Eurozone members (PIIGS included)? Even these days, when the Euro is worth 1.4 USD!

And what is the effect of that on Chinese exports to the Eurozone? A "flood"! Not to mention US, UK, even Swedish exports to the Eurozone.

And the effects on the tourism of Greece, Portugal, Spain, Italy and other Eurozone members that compete as destinations with neighbouring or distant non Eurozone and non-EU countries/economies.

Let's be honest: In the last 50 or so yrs, being a neighbour of Germany has been a great advantage (exports) for many economies that are mow member of the Eurozone or at least the EU.

In other words, have NL, BEL, DK, FR, SWE, etc not benefited from their proximity to the German market (the perennial steam engine of European growth) compared with eg POR or GR? In many ways, not mere exports. And of course Germany has benefited too from this "integration" due to proximity.

Also, should one go into a Max Weber type of analysis in order to understand the roots of the difference in economic, biz, social and other systemics, eg between NL and POR? In yes.

Plus, as per the "transfer union" soundbites, the bottom line is that yes, a US of E will have de juris to be a transfer union, much like the USA is. Else it's a Catch 22 European union.


PS 1) At its roots Economics, unlike Physics, Chemistry or Maths, is a social science.

PS 2) Do European countries have the same historical traditions and philosophy re eg accounting and audit? IMO, no, these vary considerably. Some cultures focus on the future instead of over-analysing the past, hence have less of a tradition in accounting, stats, etc than other ones!

The urgent need for political union in the EU: Not rocket science!

Based even on just the events of 2011 in Asia, Africa, the US, etc, can anyone deny the absolute emergency for #EU political union?

The EU and the rule of law

The EU is a system/state/polity based on the rule of law.

That is great.

But the existence of too many laws, at both EU and national levels, undermines that principle.

In other words, an instructions manual for a TV or video camera that is 10000000 pages big is not a very useful manual. By analogy .....

2010 Eurozone & EU government deficits & debt (Eurostat)

Eurostat 1st notification:

In 2010:
Eurozone government deficit 6.0% of GDP,
EU27 6.4%

Eurozone government debt 85.1% of GDP
EU27 80.0%

See full Eurostat news release (includes stats by country)

2012: Every vote and yard will count in the US political "running game"

These are my comments re "Obama 2012 Campaign Manager Paints Challenging Picture for Supporters", ABC News, April 25, 2011:

Obama would have much more to show for in his first had it not been for the destructive dogmatic wall built by the GOP esp in the Senate, certain US media as well lobbies, eg the ones that fought and econtinue to fight against Obamacare tooth & nail.

Thus 2013-2016 will simply be the 2nd half.. of a "Superbowl" political & policy battle that started in 2009. For US healthcare refom and many other policies that were delayed or blocked by the GOP et al in the "first half", 2009-2012, especially in the "first quarter" 2009-2010.

From "America, America" to "Europa, Europa"?

As I have often stated, it is my opinion that every human has a "human birthright" to live and work legally any place on this planet he/she chooses to. Absence of this right constitutes IMO a form of global apartheid that future historians and generations will look down upon.

IMO the willingness of the US to receive almost anyone who made to Ellis Island (an immigration policy that has been become very restricted in recent decades, to a detriment to the US (IMO again)), made it a beacon to the world population and to the world. In more ways than one.

It is now time for the EU (or the Europlus) to decide whether we have the vision, the humanism as well as the pragmatism (see ageing population) and the guts (to counter populism) to become the "America, America" of the 21st century (for asylum seekers and economic immmigrants). Given recent events, we appear not to. But those attributes (vision, humanism, pragmatism and guts) exist in EUrope. They only need to be activated.

Europe has a long and at times very troubling history. Initially it was mostly Europeans those who cried out "America, America" when fleeing to the US and seeing the coast of the US. The world systemics and dynamics are such that the world needs a new place to assume this role. Can EUrope do it?

It can, it must and it should. It is part of its becoming a beacon to the world and one of the cornerstone of its "values".

So, "Europa, Europa"?

In these austere times: sensualité contre .....

sensualité contre l'austérité * sensualidade contra a austeridade * sensualidad en contra de la austeridad * sensualità contro l'austerità

Meta-materialism, intellectualism, sensuality: life's real gems!

Related songs:

a) Surrender to the Night, Surrender to your Senses

b) La Vie Sensuelle, Empire of the Senses, Kingdom of the Mind

c) Surrender to your human side

PS. Make love, not war or finance!

Wisdom vs Logic

Wisdom takes one places where logic cannot!

Profit is like sex, the more ....

Business: Profit is like sex.
The more one fixates on it, the less likely one is to get it!

National business champions: Beyond the myth

Business Policy:
Do "national champions" do better in foreign markets than other companies? IMO, no.
National champions tend to become complacent.

And the new Prime Minister of Europe is .....

The voters of the Union will be asked to vote on the candidates that will represent their electoral district in the European Parliament, based on ballots that will indicate their national & EU party political affiliation (eg EPP, ALDE (or ELDR), PES, etc). Much like national parliament elections, the leader of the EU political party that will gather the most number of seats, will be asked by the EU President to try to form an EU government, possibly in coalition with other EU parties. He/she, the EU Prime Minister will choose his/her cabinet members that will run the EU's executive (the EU Ministries, formerly known as "the European Commission"). The national elected leaders (Pres or PMs) of the member states will gather in the EU Senate, the upper chamber, much like eg in Germany.

Who will EU President Swarchenegger, elected a few months before by an EU wide election, ask to form the first ever EU government? WIll it be the leader of the EPP, PES or ELDR (or ALDE)? Will the calendar read 2014 or 2019?

Schwarzenegger for EU President? Why not, if ....

"Schwarzenegger's next stop: EU president?" is a headline in France24 (based on an AFP report) on April 19, 2011.

Why not? Provided that the EU Presidency (or the Chairmanship of its "European Council") becomes a matter of popular vote, as opposed to being appointed by the heads of state or government of the 27.

I had blogged on this on 11/10/2009, before the first President of the European Council was appointed. And tweeted about it around the same time.

The idea, for those who like to think outside the box and think ahead is not new. I had thrown it in back in August 2004 in the Guardian Forums at the height of the US hype re the 2004 US elections that re-elected GWB.

It was then clear that Mr. Schwarzenegger, a moderate Republican, then governor of California would make a good candidate for the US Presidency, except for the fact that he was not born a US citizen. And that the experience of the Austrian born world class bodybuilder, then actor, then businessman then politician, as the governor of one of the world's biggest economies (California) would be a shame to waste.

It was also clear , not only in 2009 but also back in 2004, that it would be very difficult to find a European of pan-European popular appeal in case the EU Presidency became the subject of a vote by the EU citizens.

Hence the appeal, even far fetched (?) of an Arnold Schwarzenegger candidacy for an upgraded EU Presidency post. Too political sci-fi? Well, IMO only time will tell! Remember this post.

Up to 21 months left for the move to political union in Europe

Do you worry about the developments in Finland asked me today a fellow tweeter.

My reply was:

No, I think that such developments are actually creating the conditions for a move to political union soon (IMO within 21 months)!

I am not into the "business" of predictions or "forecasts". But it was in January 2011 that I made one, based on the systemics and dynamics in EUrope and the world. That within 2 years, ie 21 from now (April) the leaders of the EU member states (or at least some of them) will announce a move to political union.

The events from January until today, including the so called Europlus pact, have not caused me to change my prediction.

IMO the "worse" and more "difficult" things get in the EU, the Eurozone, even Schengen (see problems between Italy and France re Tunisian economic migrants), and in spite of the rise of right wing political parties in votes in many EU member states, it is (actually) because of all these problems that IMO the leaders will soon decide that the only solution is a bold (yet IMO much delayed) move forward to political union (including economic, fiscal even military one).

Why such "faith"? Because the way I see things, from a systemics and dynamics POV in EUrope and the world, the creation of a single "country" (in the form of a US of Europe or Federal Republic of Europe) is inevitable.

Of course, politicians have not psychologically prepared their citizens for such a move, on the contrary, the "anti EUers" seem to have won many battles recently.

In spite of that, or maybe because of all that, the "Eurofuzz" will have to end sometime and the move to political union decided, by 27, or 26 or even fewer members of the EU or Eurozone or Eurozone Plus!

The key ideological divide in the EU27 these days is ....

IMO these days in Europe, the key (but not of course the only) ideological divide is not "right vs left", but "pro vs anti European Union".

But it seems that the pessimist sections of the pro EU population in the EU is more detrimental to the EU and to the cause of deeper (political etc) union than the anti-EUers! It is high time for the pro-EU and federalism EUropeans to speak up!

The road to full union is not via auto-pilot!

Following the elections in Finland: Crucial times & role for the EU and for the EPP!

This is one of my first comments after the results of the national elections in Finland:

With the EPP in dominant position at national (16 of 27) & EU level (Commission, EP, Council), at this crucial phase in European & world dynamics, it has key historical role to lead the EU citizens to either real union or devolution of the EU.

Hope it plays key role for the former.

Thus EPP and its national member parties have to be very careful who they ally in government with!

Crucial times for the EPP!

The tricky path to a real EU Single Market, especially for Services

The Single Market Act was re-launched on April 13 via the presentation of the Commission Communication (COM(2011) 206/4) "Single Market Act: Twelve levers to boost growth and strengthen confidence "Working together to create new growth"" {SEC(2011) 467}

The 12 "levels" are:

1. Access to finance for SMEs
2. Mobility for citizens
3. Intellectual property rights
4. Consumer empowerment
5. Services
6. Networks
7. The digital single market
8. Social entrepreneurship
9. Taxation
10. Social cohesion

11. Business environment
12. Public procurement

Ralf Grahn, (@ralfgrahn) in his excellent Grahnlaw blog provides today a thorough overview of the subject.

Services:

For my part, for now, I will focus on the Services "level" where I have some key concerns partly because of the potential for protectionism (prompted by the so-called "Polish Plumber" issue) but also because this effort should not lead to more red tape or regs for more service related activities and professions (eg the idea of "professional ID cards" has been discussed)!

In Services, the "Key action" proposed by the European Commission is:

"Revision of the legislation on the European standardisation system, to extend it to services and make standardisation procedures more effective, efficient and inclusive"

So extension of the European stnadardisationn system to Services? This by itself raises some red flags for potential protectionism and unnecessary red tape!

The Commission claims that "Standardisation is a primary tool for the free movement of goods whilst ensuring product interoperability, safety and quality. It is also increasingly used in the services sector, although mainly at national level. This can hinder the integration of the single market for services."

Indeed, but many pitfalls exist that can make the situation worse!

The Commission points out that "In order to avoid the emergence of new barriers and to facilitate the cross-border provision of services, particularly business-to-business services, such as logistics or facility management services, services standardisation should be developed at European level, taking full account of market needs."

If that means that EU level standardisation will be put in place instead of national ones, where these exist, that sounds good. But what if an activity is standardised in eg 10 states and not stardardised in 17? Should there be EU standardisation or should those 10 MS be asked toi remove those standards unless they prove their reason for existing to the rest 17? It can get messy!

The Commission adds that "This will be a major objective of the review of the European standardisation system" and that "Another major objective will be to establish a more effective, efficient and inclusive system. It should be possible for the standardisation system to enable standards to be adopted rapidly and to be adapted to new technologies (not least in the area of information and communication technologies), to enable SMEs and other interested parties to become more extensively involved and to ensure that standards remain accessible to all interested users."

I reserve comment on the above.

The Commission also stresses that: "To create a Single Market in services, the immediate priority is the full and complete implementation of the Services Directive in all Member States, including the establishment of Points of Single Contact."

I think that MS were supposed to transpose the directive already.

Note the following:

"Beyond the implementation of the Directive, and in accordance with the European Council Conclusions of 24/25 March 2011, the Commission – together with the Member States – will carry out "performance checks" aimed at closer scrutiny of the practical functioning of the EU regulatory framework applicable to certain growth sectors such as business services, construction and tourism."

Business services? I wonder why? We shall see!

The Commission adds that it will "carry out further assessments on reserved activities, requirements as regards capital ownership and legal form, and insurance obligations, all of which are persistent obstacles to better integration of the markets in services."

Insurance obligations? I wonder which types of services the Commission has in mind!

It also adds: "On the basis of .the outcome of these various initiatives, the Commission will decide in 2012 on the subsequent steps."

More:

The Commission also says that "particular attention should also be devoted to the retail and wholesalesectors on account of their important contribution to growth and job creation. An initiative will be launched to combat unfair business-to-business commercial practices, in order to identify the nature and scale of the problems associated with unfair commercial practices between professional operators throughout the supply chain, list current regulations within the Member States, to assess their implementation and, finally, identify the various possible options."

I reserve comment, for now, on the above as well!

The European Commission argues that "the goal will be to put an end to unfair practices which jeopardise the viability of businesses and stimulate the competitiveness of the various operators in the supply chains in the context of a fairer and more effective single market in the retail and wholesale sectors, while at the same time meeting consumers' and producers' expectations with regard to competitive prices. Given the importance of business services, the Commission will set up a High-Level Group to study the shortcomings of this particular market."

Qualifications:

The Commission also notes that "without prejudice to the recognition of qualifications, the question of how to safeguard the quality of education provided in the context of the freedom to provide services, given the increasing use of franchising in education, will need to be examined"

Certainly the issue of recognition of qualifications is important by the very nature of certain activities, eg doctors, nurses, engineers, but it is important that this creation of a single market for services and professions that provide "services" does not provide regulations and red tape for other professions than those required at national levels, assuming of course that the list of professions that require a "permit" is the same in all 27! Which is probably not the case! Thus attention vis-a-vis protectionist efforts is warranted!

My final point (for now): All this may/is fine, but IMO at the end of the day the best (and cheapest?) way to get a real EU single market is via EU political union.

On the EU Single Market, on the occasion of the relaunch of the SMA on April 13

Some 3 weeks after the Europlus Pact agreed at the March 25 European Council and less than a week after the raise of the Euro interest rate from 1.0% to 1.25%, comes the Relaunch of the Single Market Act on April 13.

Some thoughts:

1) Does anyone look at the EU as a single yet complex "system"/space and wonder how this system can work better for people & firms, all parts (regions) of the system?

‎2a) How low do POR, IRL, ESP, GR, ITA etc salaries have to go to be competitive with eg Chinese ones when a) Euro is high b) China is in WTO (ie no tariffs and quotas allowed for the EU)?

2b) And how can one expect POR, IRL, ESP, GR, ITA et al workers to be as productive as eg GER, NL ones, when working in POR, IRL, etc?

3) Another example: EU Single Market: What strategic planning at EU level was done eg to address Irish exports' access needs (and costs) to the rest of the EU? Portuguese? Greek? Finn? Lithuanian?

4a) These are the types of inter-policy strategic issues someone in the EU should be looking at before one claims that the EU's or Eurozone's periphery is uncompetitive!

4b) "PIIGS" being "weakest link" is a myth. In EU & Eurozone systemics, the grandstanding by GER, FRA, UK is the "weakest link.

"
Plus:

5) EU Single Market Act relaunch: This is one area where the typically British (anti-red tape) approach is needed (as opposed to FR dirigism(e))

6) EU Single Market cannot depend eg on bilateral (OECD based) double taxation avoidance agreements between member states!

7) EU Single Market Relaunch: Professional ID cards? Is this another red tape joke?

Real:

8) In short we need an EU that is, acts and feels like a real Union, for the people & firms that are in it. Such a real Union with common regulations/laws doesn't mean that all regions are copycats, eg Catalonia can still produce different products/services than Attica or Brabant or Baden-Württemberg etc!

9) Except for some "complex" manufactured products, how can Eurozone manufactured goods compete with utra cheap Chinese & mid price US ones?

10) In spite of EU2020, Europlus Pact etc, the EU & the Euro+6 lack a real strategy for competitiveness, growth & employment/ For example how can the Eurozone tourism industry compete in the EU, Europe & the world with an expensive Euro?

Thus:

11) Bottom Line: IMO a real single market and a real single currency need real political union (a single "state").

12) Food for thought: Is it time for plan B: The "economic Fortress EU" option?

Eurozone: That 2% obsession

Update: Also today, the Bank of England has kept its interest rate at 0.5% in spite of 4.4% inflation. The conclusions are yours!

Is the Eurozone a victim of dogmatic economics?

Today the ECB has raised its rate from 1% to 1.25%. This may be marginally good in preserving the purchasing power of Eurozone citizen/consumer but what does it do to his/her chances of finding a job or keeping his/her job in a Eurozone company that is trying to sell products or services (eg tourism) against the expensive Euro?

Is the fixation/obsession with a 2% inflation target one of the main reasons of the problems of the Eurozone? IMO, yes. It did lead to interest rates and thus very expensive Euro for much of the 2002-2009 and still does. Even in the last 2 years, the Euro interest rate at 1% was higher than the UK's (0.5%) and of course the Fed's (0-0.25%)! Even before the increase today, the Euro has been higher than 1.40 USD/Euro.

Dear Mr. Trichet, what is so wrong re eg a 3% inflation target as opposed to the 2% one?

See some economic theory re the 2% inflation target in a recent post of mine: "Why a 2% inflation target for the Eurozone and other myths & realities!" (March 5, 2011)

I strongly recommend reading "Rethinking Macroeconomic Policy", by Olivier Blanchard, Giovanni Dell’Ariccia, and Paolo Mauro, Feb. 12., 2010.

So with the Euro interest rate is up 25 basis points, the US, China, non-Eurozone EU, etc exporters must be having a party to celebrate! How many Eurozone companies can compete in their own markets against US, Chinese, and even non-Eurozone EU economies (UK, Denmark, Sweden, etc) with a 1.3, 1.4, 1.5 USD/Euro rate. If the Yuan is too low for the USD, how much lower it is for a Euro that is 1.3, 1.4, 1.5 USD?

Why, why, why an interest rate increase now in the Euro, when the Fed shows no signs of moving and the inflation is driven by energy and food costs, ie these could prove temporary ones (remember the 2008 world prices crisis in staple foods and oil?)? Marketwatch.com had a very good report, IMO: "Europe leads U.S. in rate cycle — perhaps to cliff"

IMO a Treaty change is needed to make the ECB more like the Fed, ie force it to consider other factors than inflation in its rate decisions.