If Germany is (really) tired of being the largest contributor to the EU then ...

If Germany (*) is (really) tired of being the largest contributor to the EU budget etc (some refer to Germany as "paymaster" (yikes, very PC, not)), then it should press hard ASAP for EU political union, which of course will include a federal US type income tax.

Then member states would not be contributing to the EU federal budget, but the taxes paid by the high income earning - high wealth persons/households around the Eurozone/Europlus/EU as well as the high profit making companies around the Eurozone/Europlus/EU. Collected by an IRS-type federal tax authority.

Will come back to this issue in more detail in future post(s).


(*) The same applies to other "aid" tired members of the EU "North", see the interview of the European Economic & Monetary Affairs Commissioner Olli Rehn 'There Is a Certain Aid Fatigue in Northern Europe' in Spiegel Online International, today (05/30/2011).

(What about a certain exhaustion of the firms, especially exporters and tourism, of the PIIGS and other Eurozone members, due to the long periods of uber hard Euro (vis-a-vis the USD as well as the currencies of Denmark, Sweden and all other non-Eurozone EU members as well of course China et al) since 2002?)

EU Dynamics: 19.5 years after (the mistake in) Maastricht!

It was roughly 19.5 years ago when the leaders of the then EC12 met at an Intergovermental Conference (aka IGC) to agree on a new EU Treaty, the Treaty of Maastricht (signed in early 1992).

It was then that the Economic & Monetary Union project was decided and the relevant Treaty articles drawn. It was there and then that "The Mistake" occurred:

A currency union was decided without the foundation of a political union. The leaders of the 12 reshuffled the 3 ECs into one and called it European Union but without the essence, ie the political union (united Polity) the name implies.

Some 40 years after the defeat of the European Defense Community in a French General Assembly vote and the later (alternative) creation of the EEC and the Euratom, European leadership still lacked the will to announce the end goal of the European project: Political Union.

The effort to bring, European countries closer politically via the EEC ie via trade/biz/economics (the common and then (1993-....) single market) was successful, but it seems, at least now, that it had then, in 1991, reached its limits, as a method.

Instead of establishing a Economic & Monetary Union (EMU, the Economic was later kinda forgotten) as a way of preparing the way for Political Union later (how much later one can ask, 19.5 years later), Political Union (with or without EMU) should have been established.

Why?

Because maybe there is a reason why the intellectual works of Ancient Athenians and other Ancient Greeks, that shaped much of Western civilisation, were mainly philosophical and political. I am not aware of any economic or financial theories made in Ancient Greece. That is because politics (in the positive sense of the term) and Democracy, despite what many (including GW Bush,, but that is another story) thought, come before, way before, economics and "Agorocracy".

That "Mistake", made at the Maastricht IGC, seems to have come (back?) to haunt the EU (which has grown from 12 to 27) like a bad dream (a nightmare, called "ephialtes" in Ancient & Modern Greek)

For many decades, the Asian Mercantile Startegy (by Japan, then the Tigers, then China) and the US Dollar Reserve Currency Strategy (by the US) have dominated the "game" (see Gordon T. Long's excellent analysis here). EUrope self-confined itself to an "observer status" it seems, and now to a role not very different than that of Ifigenie (or is that part reserved for one of its members?).

Finance is "all Greek" to many people around the world who have been watching, listening to and reading the current affairs global reality show of the last few years, originally Crisis: NY. then the spin-off series (2009-...) Crisis: Euroland .

Unlike Bill Clinton's, this epoch calls for "It's the Polity, stupid". Better late than never, the EU needs its one (federal) Polity foundation. For the common currency and the rest of the policies to be based on. The walls that will save Europe are not literal (ie ones that keep immigrants out) but as in the case of Salamis, a metaphor, and in this case Political: Political Unity. That (political unity) which if the Ancient Greek city-states had established between them, the History of the last 2500 years would have been quite different.

Can the EU Europeans (named after a daughter of Zeus, Europe), especially those of the Eurozone or the Europlus, absorbed by their national affairs and "interests", afford to say that the above is "all Greek" to them?

If they do say so, then they better start learning Chinese, the future official language of a dysfunctional Europe.

The battle between Global Fin-Agorocracy and European Democracy is being fought at New Thermopylae. Beware of any modern Ephialtes, btw.

Re a UN seat for the EU

Should the EU get a UN seat, in general and in its Security Council?
Well by analogy to syllogisms in my recent post: What are France, the UK, Germany and Italy doing in the G8?, and since the USA has 1 seat not 50+1 in the UN, the EU27 should have only 1 seat not 27+1, in the UN Plenary and its Security Council!

The idea of the EU (and its High Rep) using ad-hoc the UK's or France's seat in the Security Council is cause for making the EU and its members a laughing stock! The EU and its 27 members should be represented by a single seat as pointed above.

The same applies, IMO, in the case of the WTO. The current situation in the G8, the WTO and other international bodies is, to say the least. absurd and this is one area that the BRICs should be making waves about, not whether a EUropean becomes again the head of the IMF. Maybe it is the proper type of trade-off.

And what makes common sense!

"Did you hear the News? Another Day, Another Night, Another Crisis"

The EEC was never (mainly) about economics

The debates, discussions, analyses, even headlines on EU affairs in recent years seem to hav lost sight of the fact that the EEC, although titled "European Economic Community" was not set up in the mid-late 50s for primarily economic reasons!

Following the narrow defeat (264-319) in the 1954 French National Assembly of the proposal for a European Defense Community, the deliberations which were under way for a European Political Community were also scrapped. Instead, the EEC and the Eurupean Atomic Energy Community were created, while the European Carbon and Steel Community had already been estabished in 1951.

As an alternative to formation of the EDC and the EPC, the EEC as well as the other 2 communities had as their main foundation political and security matters.

First was to avoid another war in Europe, world or European. France and Germany, plus the Benelux 3 and Italy were the fonding members. The common market was seen as a more gradual means of bring the countries of Europe together and that had and has a concrete political foundation. A common market was the means but not the end. The end was, by design, a gradual evolution towards the initial goals of European Political and Defense Union.

Many of the 21 other countries that joined the EEC (or EU after the Maastricht Treaty) did so, overtly or implictly, for secueity purposes.

Eg Greece joined in 1981 and was eager to also join the Euro for primarily security purposes (known by everyone, no need to mention re which other country), the same reasons that have made it overspend in defense (eg No 1 in the EU and No. 22 in the world in pe capita defense spending in 2006, source: CIA World Factbook).

I could mention the specific scurity concerns of other memebers that drove them to the EEC or the EU but it is always a touchy subject. So touchy that most like to pretend that a common market or customs union was the objective behind the vast undertaking that started in the 1950s.

Which brings us to 2011 and the Euro crisis. Which of course is not due to the deficits and debt of an economy that is less than 2.64% of the Eurozone's GDP and its debt is 4% of the total Eurozone debt! If a "structure" or "system" (forgive my lingo, due to the decision science part of my educational background) can be de-stabilised by such a factor, then of course there is something wrong with the system.

What is fundamentally wrong/faulty with the Eurozone system?

The main fault, which actually is for many, the elephant in the room, ie the one they choose to ignore or push under the carpet, is that the single currency was created, based on the Maastricht EU Treaty (1991/1992) without the foundation of a single polity, ie without the prior or concurrent establishment of poitical union, the actual European goal since the early 50s! Talk about denial!

Had the leaders who gathered for the Intergovernmental Conference (IGC) in Maastrict in December 1991 the collective guts to decide on a political union instead of merging the 3 communities into an EU with 3 pilars, etc, and a common currency, and merely renaming the thing "Union", then the singe currency would have been built on solid ground.

They did not. Not too late though, not yet!

Read also my post: The EU's No. 1 problem is .....

What are France, the UK, Germany and Italy doing in the G8?

This is one of the follow up posts to yesterday's post Key factors of "strength" in "post Doha" (and post WTO?) world systemics and on the occasion of the G8 meeting in Deauville (France), today and tomorrow.

The G8 started as G6 in the 1970s with France, Germany, Italy, Japan, the UK and the United States ie 4 large and "rich" (GDPwise) European countries members of the then EEC plus USA and Japan (also large and rich, see yesterday's post). Canada was invited later, and later Russia.
The EU is an extra, "associate" type of, participant.

My observations and points:

1) With G20 now in existence, what is G8 for?

2) Since the EEC is EU (since the 1990s) what is the point/sense of having France, Germany, Italy and the UK?

3) Considering Canada's population size compared to the other 7, why is it there (plus China and Brazil are in 2010 GDP terms richer than Canada)

4) Why is China (No. 1 in population and No. 2 in GDP) not there?

5) India is marginally less rich than Canada and Russia (1.4 vs 1.6 and 1.6 trillion USD 2010 see yesterday's article).

Hence, and depending of the weigt attached to GDP and population, the G8 should be:

either

A) G4: EU, USA, China and Japan

or

B) G7: EU, USA, China, Japan, India, Russia; plus Brazil (or the UNASUR).

The current G8 seems so 20th century and so globally irrelevant to 2011!

And in any case, EU members states have no place there, the EU does.

See also: Key factors of "strength" in "post Doha" (and post WTO?) world systemics

Key factors of "strength" in "post Doha" (and post WTO?) world systemics

The combination of population size & GDP (not per capita) are key factors of "strength" in "post Doha" world systemics.

What do I mean?

1) The WTO and its 180 some members have failed to reach an agreement on the "Doha Round" for almost 10 years now. While that does not mean that the existing WTO rules are not in force and that they provide for some kind of multilateral "free-ish" trade (ie with many fewer quotas & tariffs than when the GATT started post WWII), it does call into question the whole WTO/multilateral system.

2) After all, in the last few years, because of the failure of WTO to reach agreement in Cancun & Hong Kong, many bilateral and "group" (usually regional) trade agreements have sprung up as a hedging mechanism. Eg in South America, UNASUR has been gaining ground. Brazil, India & South Africa signed an agreement a few years ago. Many ASEAN members have signed an agreement with China. The TransPacific Partnership is evolving. Africa was developing its own union (although it is nor clear how events in North Africa in recent months will affect it).

3) The US and the EU have signed many on the bilateral ones (although the US had trouble signing anything trade related while the House was in Democrats' hands).

4) The G7 then G8 has now been sort of taken over by a G20.

With multilateral "globalisation" in shaky grounds, a system of sub-global entities have been evolving.

In my systemics and dynamics based POV, the following new "geography" is evolving, in terms of its major participants:

EU, USA, China, India, Brazil or UNASUR, Japan, Russia, ASEAN

Some see the BRICs (Brazil, Russia, India, China) as a group. But IMO they do maintain their own POVs.

On the other hand, countries like the UK (a member of the EU, at least for now), seems to favour a more "free agent" approach compared to the other EU members (especially with Cameron as PM).

With NAFTA not much of a success, where does that leave Canada & Mexico?
Canada is a traditional member of the G8 and now of the G20, but with some 30 milion population, where does a country like Canada fit in the new global geography?

But let's go back to my theory that a combination of population size & GDP (not per capita) are key factors of "strength" in "post Doha" world systemics and have a look at the top rankings in terms of these two parameters:

A) Population (out of 6.9 billion total)
Note: Only 11 countries have population of over 100 million

China 1.34
India 1.21
USA 0.31
Indonesia 0.24
Brazil 0.19
Pakistan 0.17
Nigeria 0.16
Bangladesh 0.15
Russia 0.14
Japan 0.13
Mexico 0.11

Note: No EU member country has population over 100 million.
3 of the 11 are in the Americas (2 of which from North America and NAFTA)
6 of the 11 are in Asia (7 if one counts Russia)
1 of 11 in Africa

The EU, with 0.5 ranks 3rd, after China & India and well above the US. Even the Eurozone, at 0.33 has a larger population than the US!


B) GDP nominal (in trillion USD) 2010 estimates (Source: CIA, World Factbook)

World 62.2
1 United States 14.6
2 China 5.7
3 Japan 5.4
4 Germany 3.3
5 France 2.6
6 UK 2.3
7 Italy 2.0
8 Brazil 2.0
9 Canada 1.6
10 Russia 1.5
11 India 1.4
12 Spain 1.4
13 Australia 1.2
14 Mexico 1.0

If one does not count individual EU members (in this case the 5 richest ( and largest in population) but only the EU as a whole, then the geography becomes:
(World 62.2)

1 European Union 15.9
2 United States 14.6
3 China 5.7
4 Japan 5.4
5 Brazil 2.0
6 Canada 1.6
7 Russia 1.5
8 India 1.4
9 Australia 1.2
10 Mexico 1.0

Population and GDP are 2 key parameters but of course other parameters play a role. Eg export (trade balance or current accounts power).

Notes:

1) Canada (1.6 trillion USD) has GDP power but (in spite its size in surface), its population size is a key handicap in being considered, on its own, a major participant in the post Doha geography. Mexico (1.0 trillion USD) and 0.11 billion inhabitants, is a candidate, albeit marginal, for the "premier league". It is thus ufortunate that NAFTA is not working that well and the potential for a North American Union (the equivalent of the EU for NAFTA) is bleak. But the US may soon find that its population may put it at No. 4 in the world, behind China, India and the EU and its GDP at No. 2 but it its way behind in the population parameter and that a USA+Canada+Mexico entity would have 0.45 bilion inhabitants and put its 1.3 trillion USD above the EU in GDP at No. 1.

2) In effect the EU, China, India and the US are the "big teams" in the above premier league that is based mostly on GDP and population.

3) The above analysis shows why a real European Union (ie united politically and with a real internal market) is an urgent need.

Walls (bis)

Those of us (especially in Europe and the US) who were protesting apartheid in the mid 1980s and celebrated the fall of the Berlin Wall in the late 80s, how do we feel about the attitude towards immigrants, by many politicians and a vocal part of the public opinion, in the world today?

It does seem that the humanist gains of the 80s are being stepped on nowadays.

Sad, sad times for humanity.

Eurozone & global systemics: Lessons from Greece's case

The following are excerpts from my 2 sets of comments/replies made to the blog post titled "Which straitjacket and life jacket for Eurozone Greece?" of May 21st in the Grahnlaw blog of my esteemed fellow EU tweeter & blogger Ralf Grahn.


I. Excerpt of my Comments to the original post in Grahnlaw:

2)Which brings me to my main point, from a Eurozone, EU and global analysis perspective:

Greece's case (*) is a very valuable lesson regarding the shortcomings and downright faults of the dominant dogmae in Finance, Economics, Policy, etc especially of the so called "West". And a rare opportunity to overhaul these dogmae in favour of ones that are closer to reality and human needs.

I could elaborate further here, but it could evolve into a proper book.

Let me mention 1 or 2 examples:

Reliance on stats: It has become an obsession in a world/universe which by its very nature is unpredictable and uncertain. Our "Western" craving for stats, technical analysis, and certainties in general has been leading Europe and North America down a dangerous path. Greece's case is a wake up call. But not many seem to have grasped that, at least yet.

Another example: Some seem to treat countries or economies as football teams or pions in a "fantasy Euro or global economic league" not only using parameters that are by their very nature at best incomplete but also faulty in philosophy. This has, inter alia, an effect on not focusing on the real economy but an economic/financial "video game" that has little to do with reality, ie what is experienced daily by real people and real companies, esp. SMEs, in Greece, Eurozone, EU, USA, the OECD etc.

Free market capitalism is failing and is highly unpopular even in the US and UK (see relevant BBC World surveys) because it is based on the faulty Economic, Financial, Policy and other dogmae I referred to above.

...

(*) All one has to do is spend even 1 hour facing the Acropolis in order to appreciate how the West's thinking in Economics, Finance, Policy, etc has swayed away from its roots into uncharted waters.


II. Excerpts from my reply to Ralf Grahn's comments on my comments to the original post in Grahnlaw:


... as an EU/European/global affairs analyst, it is not my job to analyse Greece per se. My job is to look at EU and Eurozone systemics thus my tweets and blog posts have not focused on Greece's or Portugal's or Ire;and's policy faults but rather the systemic faults at EZ & EU level, eg the effects of the uber hard Euro on most Eurozone products and services, be they Greek or even German!

What I stated in my initial comments is that "Greece's case is a very valuable lesson regarding the shortcomings and downright faults of the dominant dogmae in Finance, Economics, Policy, etc especially of the so called "West".". Elements of Greece's case are to be found IMO in the other PIIGS as well, as well as most other Eurozone & EU members. But they are compounded in Greece's case, thus being more evident. That is not a defense of Greece but rather severe criticism, from my EU/Eurozone/systemics POV re the dominant Economic, Financial and Policy dogmae in the "West". Greece's problems are merely the most severe ones. And my concern is that the EU, Eurozone and global lessons are not missed.

.......

.... It seems that the world nowadays is full of experts on what Greece should do. Thus I opt to focus on what, systemically, the Eurozone should do. 1) Adopt a more "moderate Euro" policy 2) consider the exit WTO option 3) move immediately to a political union. (1) and (3) are IMO absolute "musts".

Greece's debt is merely 4% of all Eurozone debt. Unless it learns the lessons from Greece, the EU or EZ or Europlus may "save" the Greek economy but lose the "European" one. I would think the objective should include both. But so far it seems that the lessons from Greece's problems have not be learned by the other 16. The recent report by DW "Red lights aflame as European students opt for sex work" for example shows how fragile are the systemics at the core of the core of the Eurozone, ie in Berlin!

Thus high time to rethink the Economic, Financial, Policy dogmae that the EU (and the US, ie the West) has been operating on, IMHO as an EU and global policy analyst!

The cheap, hard or smart way to EUrope?

In view of Angela Merkel's recent comments re South Europe, some thoughts:

Work cheap, work hard or work smart? Which is Europe's key competitiveness problem (other than the uber hard Euro)?

There are many biases (incl philosophical) in the way dominant Economic dogma defines hard work - productivity. The Merkel comments also show IMO how unaware she is about the work smart (vs work til you drop) model her neighbours the Scandics take pride in!

That anti-inflation obsession: from Bundesbank to the ECB and now to the IMF?

Would the appointment of a former Bundesbank governor at the head of the IMF "export" Bundesbank's anti-inflation "obsession" philosophy to the IMF too (after the ECB)?

For context, see my April 7, 2011 "Eurozone: That 2% obsession" post

Let us keep in mind that in effect the IMF lends money to economies in trouble but in return for those loans dictates the socio-economic policies of the recipient country. Thus the IMF is not a mere "fund" or even a mere "bank". In return for loans, it almost runs a country's economic governance (that is why DSK will be missed and why IMO Christine Lagarde, France's Minister of Finance and and ex-businessperson, is the best candidate for the job).

It is not a good time to export dogmatic Economic thinking to the IMF.

Eurozone: The elephant in the room

Did (post 2002) and can (today) anyone expect Greece, Ireland, Portugal, other Eurozone members, even NL & Germany to be/become competitive with such a "hard Euro" policy (eg even these days Euro > 1.4 USD)?

Democracy vs Financial Agorocracy and the value of understanding Finance!

Today I read an article which is probably the best analysis of EU, especially Eurozone systemics & dynamics I have read in years:

"Eurozone design and management failures", by Guillermo de la Dehesam chairman of the CEPR in Vox, May 18, 2011

It prompts me to ask the question: Is one to conclude that leaders and policy makers lack an understanding of Finance?

The thorough analysis - review of major EU/Eurozone decisions in recent times by Guillermo de la Dehesa makes one wonder to what extent European leaders (Merkel et al) and their policy advisers understand Finance! An alternative explanation could be that they have a primal fear or inability to communicate/explain to their electorates what needs to be done, hence do or not do what needed/needs to be done as, as the chairman of CEPR so eloquently explains in this article in the Vox.

So in the struggle for power over our lives and socio-economic and other systemics that has been on for some years now (see eg my vlog "Agorocracy and Democracy), who is going to provide the agents of Democracy with at least adequate understanding of the systemics and workings of global finance, in order for Finance to move/be regulated back to its original role (ie as a support to real economy instead of the real economy supporting finance and financial agorocracy vying for power over Democracy?

Finally, are the current systemics of the global financial markets understood even by most financiers? Have the financial markets become a runaway train?

Systemics: If finance is to remain global then polities ....

Assuming the validity of the theories about econ-financial contagion at continental and even global levels, if finance is to remain global, then polities must become continental (ie political union in the EU/Europe, South America (UNASUR), Asia (on top of existing efforts such as ASEAN), Africa (African Union), etc.

Even if finance was to become sub-global, ie continental, then polities should have the same (continental) scope.

Hence: Global finance & world trade need continental if not global polities. The G20, the WTO, the UN, etc cannot or have not shown that they can satisfy the need for political balance to eco/fin dimensions.

For EUrope, that means absolute need for (real) political union and no more myths re national sovereignty in these globalised conditions/systemics. Sovereignty can only be achieved at (near) global/planetary or at least continental level.

The sooner political and opinion & thought leaders in Europe and around the world admit that, the sooner the imbalances that affect the lives of people everyday around the world will be addressed.

EUrope is supposed to be ahead of this wave. But in recent years, it has flirted with populist rhetoric and short termism in national political visions.

Time of EUropean political and opinion leaders to speak out! Some are!

Some have started to do so.

Eg. Michel Barnier (Berlin, May 9)

Another voice, yesterday, 13 May, in an interview with EurActiv, of Josep Borrell:

"EU leaders played poker with euro and lost, says Borrell"

A truly must read interview, kudos to Mr. Borrell and EurActiv!

One brief excerpt (merely one of the key statements made by Mr. Borrell):

"Borrell is clear: EU leaders have blatantly failed to make the case for a stronger Europe & continue to cultivate the myths of independence"

My comments:

I have written many tweets and posts (eg "The EU's No. 1 problem is ..", "Time to talk about the sovereignty of Europe from China, USA, Russia, et al", "Some thoughts re Independence and Sovereigny in 2010+ (on the occasion of July 4)", "More thoughts on "national sovereignty"", there are a total of 18 posts in this blog with the keyword "sovereignty") with a similar tone and emphasis. But I am merely a policy analyst. Political and opinion "leaders" must do the speaking out, all over EUrope and beyond.

Sovereignty and independence - near self-reliance in energy, investment, staple foods and other basic elements that define sovereignty and independence in 2011 terms, given the systemics and dynamics of our era, can only be achieved at continent level in Europe.

Eurozone systemics: At the core of the problem

Food for thought:

Can anyone deny the effects of the expensive Euro periods since 2002 on the economies, firms/companies, exports, tourism, hence competitiveness and budgets (tax revenues) of many Eurozone members (PIIGS included)?

Even these days, when the Euro is worth 1.4+ USD!

Plus consider:

1) The Euro was not decided (1991 Maastricht Treaty) with
a) China's WTO membership and Yuan policy in mind (yet intro of Euro coins & motes happened almost concurrently with China WTO entry)
b) The evolution of GATT to WTO (which took place in 1994)

One other way to maje systemics & dynamics in the Eurozone more balanced is EU exit from the WTO (the EU has many bilateral trade agreements in place to partly/selectively take the place of WTO membership).

Of course the best way for Eurozone (& EU) systemics and dynamics to find an equilibrium is EU or Eurozone or Europlus political union, as long as it is announced soon and convincingly!

The times call for public policies, but what kind of public policies?

Public policy is like products (eg medicine etc): they need to be tested (eg for side-effects or bugs) b4 they are released.

And the cumulative effect of policies (laws, regs, etc) on economy, society, firms, people needs be to evaluated.

The times call for high quality policies including a thorough re-evaluation of existing policies (laws, regs, etc).

EU Systemics: A political union of the Scandic+Baltic countries or Benelux and other scenarios

1) According to the Eurostat publication Economic Statistics (Jan. 19, 2011), p. 32 of the document:

5 of the 27 EU member states (which also happen to be the 5 largest in terms of population ie Germany, UK, France, Italy and Spain) account for 71.7% of the 2009 EU GDP!

12 members account each between less than 5% and more than 1% of the EU 2009 GDP, for a combined 25.4%.

10 members each account for less than 1% of the EU 2009 GDP, for a combined 2.7%.

The last group includes some very small countries with pretty high GDP per capita such a Luxembourg and Cuprus.

2) The population of the 27 also varies considerably, as I showed in a recent post. 4 members have each more than 60 million inhabitants while 8 have each less than 5 million (3 of which less than 1 million). 9 have between 11 and 5 million inhabitants.

3) How do the above wide distributions of population and wealth (although GDP is not the most precise surrogate for wealth) affect the balance (or rather the lack of balance) in the EU (and the Eurozone)?

What can be done to make the EU and the Eurozone, as "systems", more stable?

a) Political Union. As I have proposed in many posts and tweets (see eg this recent post), IMO political union will help create better foundations for both the EU and the single currency, including better foiundations for the single market (because IMO a single market unlike a so called "free trade area" or the WTO "free trade" system, needs inter alia single/uniform laws and not only in the trade related field).

But what, other than political union (US or German style) of all or most of the EU members, improve the balance?

b) Would for example political unions of groups of the existing members help create a system with more balance,better systemics & thus dynamics?

In recent posts I did the exercise of taking a basic look at 2 such political unions, one between the so called "PIIGS" (Portugal, Ireland, Italy, Greece & Spain) and one between Greece, Portugal and Ireland.

Similar exercises could be done for:

1) Denmark, Sweden, Finland, Estonia, Lithuania and Latvia. Only 2 of the 6, Finland and Estonia, are members of the Eurozone. All of them, along with the UK, participated some weeks ago in a conference that proposed ways of growth for the EU, based on what was argued a common mentality of these countries/economies (eg pro trade, pro "free market", etc).

Also, the "Nordic model" was presented/"marketed" in this year's Davos WEF as a success model to be studied and maybe copied or adapted by other countries/economies!

So is there a foundation for a political union among these 6 countries or some of them? Feel free to send me comments to this blog post or to my @nppolicyanalyst Twitter account.

2) BENELUX was around even before the EEC (The 3 ECs were founded by the 3 BENELUX countries plus Germany, France & Italy after all). Could it evolve into a political union between those 3 countries of an approx. total of 26 million inhabitants? Maybe a topic for a future post. But again, feel free to send comments to this post or via Twitter.

3) Bulgaria and Romania could form a political union of approx. 30 million inhabitants, ie a bit less than the population of Poland.

4) The Czech Rep, Hungary, Slovakia, Austria and Slovenia could form a political union. Again, topic for another post/exercise on paper.

What would such sub-EU level political unions do, systemically speaking? They could provide a transitional phase towards an eventual political union of the whole EU (probably without the UK?). Plus they would reduce the number of members from 27 (which maybe is too large for the EU's dynamics?) to a number between

a) 9 members ie: Germany, France, UK, Poland, GIIPS (plus Malta & Cyprus?), "Benelux", Bulgaria+Romania, Scandic+Baltic, "Central"

and

b) 11 members ie: Germany, France, UK, Italy, Spain, Poland, GIPMC, Benelux, Bulgaria+Romania, Scandic+Baltic, Central.

That would mean 11 Commissioners instead of 27+ (think of future members), 11 Ministers in the Council of the EU instead of 27+, 11 heads of state/gov in the European Council.

In other words, remember the group dynamics in the EEC/EU decision making when it only had 9, as in 1973-1981, 10 (1981-1985) or 12 (1986-1994) members? That is what these mini or regional political unions within the EU would achieve. In theory at least.

The grouping in this food for thought exercise was based mainly on a geographical parameter. Among its problems is that some groups (Scandic+Baltic and Central) contain both Eurozone and non-Eurozone (or non-Europlus) members. Does geographical proximity provide the most potent "glue" for political union of countries?

If we look at people rather than countries, we notice that while neighbours or tenants of the same building may get along with one another, one's best friends usually are not his/her neighbours.

Eg would Ireland be more "comfortable" in a political union with the UK or with Portugal and Greece?

Would eg Greece be more "comfortable" in a political union with a) Italy or b) Bulgaria & Romania or c) Portugal and Spain or d) Portugal & Ireland?

While I think these exercises are interesting or intellectually stimulating, IMO the best option for political union is not for mini or regional one but for a full one (with of the 27 or a few less, eg 26 or 23). Because after all, I propose, it is easier for 27 families to co-habitate in one building than 2 or 6! Living in a small village or town can be somewhat suffocating compared to living in a city.

This concludes. for now, this intellectual - food for thought exercise on paper.

My point remains that political union is crucial and urgent (and un-avoidable) in the EU. especially when one considers the global systemics and dynamics of the era (this is the topic of a different post).

The EU needs a single polity and a single army and a single (federal) tax system, as well as sufficient "EU sovereignty" or independence or sufficiency in energy, staple foods, certain other basic goods the procurement of which cannot otherwise be guaranteed in the systemics and dynamics of the era (see eg the 2008 and 2011 world prices crises in oil and some staple foods).

PS. The above considerations do not necessarily reflect an "economic fortress EUrope" scenario (although IMO that is a scenario that is more probable or has more merit today than eg 1990 (consider eg the failure of the WTO Doha round)) but an ever uncertain world, further complicated by the whims of speculators in shares & bonds, commodities, etc.

In other words, from the city states of Ancient Greece (that never united unless to fight off invaders or by Alexander the Great but in the process of globalisating the then "known" world (look up "Hellenistic Times" or my 2008 post "Globalisation, today and in 300 BC")) to the utopia of a world government (with a world parliament etc, not a G20 type), IMO, the optimal systemics in the world (Earth) today are a key factor for a politically united EUrope.

Consider this: Had the city-states of Ancient Greece united into a United States or Fed Rep opf Germany type of union before or after the Peloponnesian War (instead of partial alliances such as the Athens Delian League and the Sparta led Peloponnesian League), then the history of the world 450 BC to 2011 would have been quite different.

Systemics: If Greece, Portugal and Ireland formed a political union

Food for thought:

If Greece, Portugal and Ireland formed a Political Union, the resulting polity would have a combined population (1/1/2009 Eurostat data) of

26.4 million

making it the 7th largest member of the EU (see here)

the 5th in the Eurozone and the 6th in the Europlus.

Its nominal GDP (2009 World Bank data) would be 784,884 million USD ie 6.3% of Eurozone nominal GDP (2009).

Hence:

5) Spain 45.8

6) Poland 38.1

7) Romania 21.5

8) Netherlands 16.5

Would become:

5) Spain 45.8

6) Poland 38.1

7) Greece + Portugal + Ireland 26.4

8) Romania 21.5

9) Netherlands 16.5

Here is a rough comparison with the NL:

Netherlands

Pop (2009) 16.5 million

GDP (2009) 792,128 million USD

GDP per capita 48007

Greece+Portugal+Ireland

Pop (2009) 26.4 million

GDP (2009) 784,884 million USD

GDP per capita (USD, 2009) 29730

Based on the 2009 World Bank nominal GDP data the G+P+I would have the 6th highest GDP (size of economy) in the Eurozone (after Germany, France, Italy, Spain and the Netherlands).

Onviously, a theoretically "exercise", but IMO "systemically" insightful.

Systemics: If the PIIGS formed a political union it would be No 1 EU & Eurozone member

Food for thought:

If the PIIGS formed a political union it would b biggest member of Eurozone (& the EU):

In the Eurozone it would be the biggest (No1) member in population 40% and in GDP (35% in 2009).

For more raw data on it

Reminder: Germany has roughly 25% of #Eurozone population & 25+% of nominal #GDP (2009).

The pop culture that unites Europe!

Is there a pop culture that unites Europe?

Of course there is: US pop culture (movies, TV series, music, etc)!

That's the europainful truth (with some notable exceptions of course)

German exports record high in March vs Euro/USD rate

Today it has been announced that the March 2011 German exports were Euros 98.3bn!

That means
1) +16% from March 2010
2) that is the highest monthly total since 1950 when record keeping began

But what was Euro/USD in March compared eg to last week (the week before "the weekend"?
See a chart eg here and draw your own conclusions!

The EU's No. 1 problem is .....

On this Europe (or EU (or EUrope, I prefer "EUrope" actually)) day, May 9, 2011, I am re-iterating what I have for years considered as the EU's No. 1 problem. Here is my syllogism:

The European Communities/Union have for some 54 years now been an on-going building project. Like a road that is being continuously upgraded.

The problem with such a road is that there is always construction going on and that disrupts traffic and confuses (and irritates) the drivers.

Well, by analogy, that is the reason why the ECs/EU have never been a very popular "project".

Does that mean that the ECs/EU should have abandoned their target of ever closer Union? Should they have remained a mere "customs union" or "common market" (not even a "single" one)? Or stopped after 1.1.1993 (the start of the Single Market)? Or after 1.1.2002 (the intro of the Euro notes and coins)?

No! On the contrary!

In spite of what some think (and even more claim) the ECs were from the date of their conception a "project" that aimed at political union, "a sort of United States of Europe" (as a well known British political figure is supposed to have said (after WWII) that Europe needed).

Thus, the problem with the EU is that this "end" (goal) has been too slow in being reached. And the on-going (but painfully slow) upgrading of the ECs/EU, day in day out, has been a disruptive element in the lives of the ECs/EU's firms (especially the SMEs and micros) and citizens.

At the end of the day, we (EUropeans) all know (both those who we like it and those who do not) that the ultimate goal is a United States or Federal Republic of Europe (ie something like the USA or the FR of Germany). But most national level politicians, for reasons that are more or less known, have and been still are afraid to announce officially to their citizens/voters/populous what they/we already all know.

A USE/FRE government with a PM, a cabinet, based on the seats of political parties in the USE/FRE Federal Parliament, with an FRE Upper House or USE Senate that consists of the elected PMs of the member states (German model) or 2 reps per member state (elected), the Euro, a USE/FRE army, a USE/FRE IRS (tax authorities), federal minimum wage (USA has one too), federal police and of course federal laws. Plus a federal budget financed not by X or Y "rich" state but the rich and high income earners from all over the USE/FRE! A USE/FRE that is a major "player" in global affairs of all kinds. With a foreign Minister (Secretary of State) who has as many powers as Hilary Clinton does in the (first) Obama administration! Maybe even a USE/FRE President, probably with a mostly decorative/ambassador role (ie not US or French style, sorry Arnold)!

Come on, that is more of less, what we (500 million EUropeans, at present) know that the final state of the ECs/EU is going to be! Some want that, some do not. Maybe that is a matter for an EU-wide referendum to decide.

But what almost no EU citizen likes/wants, I argue, is the perpetual upgrading of the entity, like a road, that makes our lives difficult with all those work signs, bulldozers, workmen, etc!

Enough is enough though!

Get on with it. Finish this European Integration "project", finally!

Get it done.

Stop the lame concerns re political costs and announce what we anyway know that the end result is going to be: United States or Federal Republic of Europe. Give us all the details of the final "product" and set a precise and fixed deadline to get there, ASAP. Give us a chance to say Yes or No and when we probably say Yes, even by 51-49 margin. do it, just do it. So that we can experience that final product. Live, work, venture, employ, plan, dream, career, export, etc in it!

Just do it! Until you do, that's the main problem of the EU, the Euro, all things EUropean!

It this a Catch 22? Nope.

A Gordian Knot? Neither!

No need for the determination of an Alexander the Great to do it. Merely a matter of enough political and other leaders (eg opinion leaders) having the guts to announce to us what we all more or less know is coming but do not know when (while we suffer the daily upgrades).

I personally think that until January 2013 at the latest you will make the announcement.

PS. Does that mean no more new members? IMO no, the possibility to expand the project geographically with new members is not the real problem. The wider vs deeper dilemma, discussed before the 2004 enlargement, is a pseudo one, although some (eg the UK government) did manage to materialise part of that pseudo dilemma into reality! But that's another post.

US - China talks: Who holds the chips?

Top US and Chinese officials will be meeting for two days in Washington (9-10 May, see BBC News report).

Among other issues, the WSJ reports that the U.S. will press China to hasten yuan's rise.

The grip that China has on the US, eg via its holdings on US Treasury bonds via its sovereign wealth fund is well known.

So what bargaining chips does the US have to pressure China on anything?

In the meantime, Forbes reports that "China Imposes Price Controls, Informally"

Europe or EU Day?

May 9 is Europe Day. But in effect it is EU Day.

Which brings me to the wider issue of Europe vs EU which is somewhat analogous to America vs United States of America (USA).

The "Dream" may be called American but the institutions of the USA are called:

US Supreme Court http://www.supremecourt.gov/

US Senate http://www.senate.gov/

US House of Representatives http://www.house.gov/

US Presidency http://www.whitehouse.gov/

Yet the Official name of the country/polity is United States of America.

But my point is that the US Senate is not called American Senate or the House of Rep., American House of Reps (or American Parliament). Unofficially of course, the US President or Pres of the US of America can be referred to as American President (see eg the film An American President with Michael Douglas (and the "famous" speech)).

Thus IMO the European Parliament should be called EU Parliament (or Parliament of the EU) and the European Commission EU Commission or Commission of the EU. The Council of the EU already exists but that was probably in order to distinguish it from the European Council (it's maybe time for the European Council to seek a new name that includes the EU and not the council, unless maybe EU Supreme Council (!??)).

Of course the US citizens are still referred to as Americans (which in theory describes the citizens of all countries in the Americas (North, Central and South)). I propose the term EUropeans, for lack of any better alternative that comes to mind.

What's in a name? Sometimes a lot. And since the EU does not plan to include all countries that are located in the continent called Europe (and that is another matter of debate), all EU entities should be referred as EU (eg EU Commission) as the least show of courtesy to the non-EU members, countries and Europeans.

May 8, 2011

A EUropean

Why have the dotcom & then subprime bubbles occurred in recent years?

Why have the dotcom & then subprime bubbles occurred in recent years?

IMO because "people" over-invested their expectations in them away from the real economy because the real economy had been and still is suffering partly from bad economic policy making in the US, Europe, the world, but mainly due to over-regulation and red tape stifling the real economy/business mainly in US, Europe.

So while the financial system needed more regulation (and did get some, but IMO needs more, maybe a major overhaul of the system), the real economy and its firms (especially SMEs and micros) are still suffering from over-regulation, red tape and bad policies.

Listen to my theory (as a policy analyst, I am a decision scientist and MBA, I am not an economist or financial analyst) re the causes of the global economic crisis (audio, 8', recorded back on Oct. 23, 2008)

Bank of England keeps its rate at 0.5%. Lessons for the ECB?.

Yesterday (Thursday) the Bank of England decided to keep its interest rate at 0.5% inspite a March 4% annualised inflation rate and a whopping +10.7%. in March 2011 compared with March 2010 in the UK industrial producer prices gained (see Eurostat stats)

But it should be noted that 4% March inflation according to Eurostat stats (released back in April 15 annualised, ie March 2011 compared with March 2010), was down from 4.4% in February, (it was 4% back in J.anuary too).

According to economists, Producer Prices are an indication as to what inflation will be a few months later. Thus the 10.8% IPPI figure for March seems cause for concern.

Taking into consideration that in March 2011 compared with March 2010, industrial producer prices gained 6.7% in the Eurozone and 7.4% in the EU27 and in February 2011 vs February 2010 the corresponding numbers were 6.6% and 7.1%, that causes concerns re the systemics related to the UK industry.

Yet the Bank of England decided to keep interest rates that a) aid growth b) keep the Pound at reasonable exchange rate (impact on exports and incoming tourism).

Food for thought: Compare and contrast BoE and ECB policy/decisions/philosophy.

EU vs Eurozone vs Europlus population systemics

The EU population is about half a billion people, ie 1 out of 14 people on Earth is EUropean.

The EU has 66% higher population than the USA.

The population of the Eurozone (330 million) is 60.6% of the EU total

Note that:

1) Germany has 16.4% of the EU population

2) Roughly 1 in 2 of EUropeans, 53.6% ie 268 of the 500 million live in the 4 largest member states, Germany, France, UK & Italy. An average of 67 million per state.

3) 4 member states range between 45 and 16 million., Spain, Poland, Romania and the Netherlands.

4) 6 member states have population between 11.2 and 9.2 million, a sum of 62 (12.4%) of the 500 total.

5) 5 member states have population of less than 9 but more than 5 million, for a sum of approx 32 million (6.4%) of the 500.

6) 8 member states have population under 5 million, for a total of approx. 15 million (3% of the 500 of the EU total).

7) With a population of 500 million in 27 member states, the average population size is 18.5 million. The median is 9,256,350 (Sweden).

Here is the ranking which I made using Eurostat data for 1.1.2009 (Eurostat Data in Focus, 31/2009, table 2, page 2)

1) Germany 82,050,000
2) France 64,351,000

3) United Kingdom 61,634,600

4) Italy 60,053,440

5) Spain 45,828,170

6) Poland 38,135,880

7) Romania 21,498,620

8) Netherlands 16,486,590

9) Greece 11,257,290

10) Belgium 10,754,530

11) Portugal 10,627,250

12) Czech Republic 10,467,540

13) Hungary 10,031,210

14) Sweden 9,256,350

15) Austria 8,355,260

16) Bulgaria 7,606.550

17) Denmark 5,511,450

18) Slovakia 5,412,250

19) Finland 5,326,310

20) Ireland 4,465,540

21) Lithuania 3,349,870

22) Latvia 2,261,290

23) Slovenia 2,032,36

24) Estonia 1,340,420
25) Cyprus 789,270
26) Luxembourg 493,500
27) Malta 413,630

Eurozone:

If we remove the 10 non-Eurozone member states from the above ranking, this is what we get (17 states):

1) Germany 82,050,000
2) France 64,351,000

4) Italy 60,053,440

5) Spain 45,828,170

8) Netherlands 16,486,590

9) Greece 11,257,290

10) Belgium 10,754,530

11) Portugal 10,627,250

15) Austria 8,355,260
18) Slovakia 5,412,250

19) Finland 5,326,310

20) Ireland 4,465,540

23) Slovenia 2,032,36

24) Estonia 1,340,420
25) Cyprus 789,270
26) Luxembourg 493,500
27) Malta 413,630

Notes:

1) The Eurozone is EU minus 170 million in population. At 330 million it is still bigger than the US population (300)!

2) The average population volume is 19.4 million, that is larger than the average for the EU (18..5 million).

3) The median is 8,355,260 (Austria), lower than the EU's median (9.2 (Sweden)).

4) Germany has 27.3% of the Eurozone population (16.4% of the EU)

5) Germany plus France plus Italy have roughly two thirds, 62.4% (206 of 330) of the Eurozone population. If one adds Spain, then the 4 biggest Eurozone members have 251 of the 330 million, ie 75% (3 out of 4)! That means that 4 of the 17 Eurozone members have 3/4 of its population!

Europlus:

I remove the UK, Hungary, the Czech Rep. and Sweden from the 27 to get the 23 Europlus (ie the Eurozone 17 plus 6):

1) Germany 82,050,000
2) France 64,351,000

4) Italy 60,053,440

5) Spain 45,828,170

6) Poland 38,135,880

7) Romania 21,498,620

8) Netherlands 16,486,590

9) Greece 11,257,290

10) Belgium 10,754,530

11) Portugal 10,627,250

15) Austria 8,355,260

16) Bulgaria 7,606.550

17) Denmark 5,511,450

18) Slovakia 5,412,250

19) Finland 5,326,310

20) Ireland 4,465,540

21) Lithuania 3,349,870

22) Latvia 2,261,290

23) Slovenia 2,032,36

24) Estonia 1,340,420
25) Cyprus 789,270
26) Luxembourg 493,500
27) Malta 413,630

That reduces the population size from 500 to 409 million (70 more than the Eurozone, 109 more than the US).

Notes:

1) Germany has one fifth (20%) of the Europlus population.

2) Germany plus France plus Italy have roughly half, 50.3% (206 of 409) of the Europlus population. If one adds Spain, then the 4 biggest Europlus members have 251 of the 406 million, ie 61.8% (3 out of 5)! That means that 4 of the 17 Europlus members have three fifths of its population!

3) The median size is 7.6 million (Bulgaria). The average size (409/23) 17.8 million which is lower than the EU and the Eurozone average.

To paraphrase Bill Clinton, "The (Eurozone) periphery stu...."

Today the ECB decided to keep the Eurozone rates at 1.25%, following the increase from 1% to 1.25% last month (see eg BBC's news report)

Thank god for Eurozone exports (to the rest of the Eurozone, the EU and world markets as well as their competitiveness vis-a-vis cheap third country imports) and tourism (Spanish, Italian, Greek, Portuguese, Irish, etc)!

I am beginning to think that ECB philosophy is either too German or not German enough (or both at the same time)! In any case, it is "off".

I felt that I am not alone in the Universe when I watched excerpts from N. Roubini's speech at the Estoril Conferences in Portugal yesterday: Inter alia, he did point that expensive Euro was a "nail in the coffin" of PIIGS economies! (and still is IMO). He opined (and I so agree) that with the Euro being worth 1.5 or even 1.4 Euros the PIIGS economies have a hard time being competitive vis-a-vis non Eurozone cheap products! And he did "accuse" German economic policy of not increasing its domestic demand to help the PIIGS' (intra-Eurozone) exports!

March 2011 annual retail volume decline larger in Eurozone than in EU

According to first estimate stats released today by Eurostat:

Retail trade volume in the EU (27) was down 1.0% in March 2011 compared with March 2010.

In the Eurozone, March 2011 compared with March 2010 by 1.7%, ie a larger decline than the EU one!

Updated! Industrial Producer prices hikes among Eurozone members: Cause for concerns

The update include some comparison of March 2011 compared with March 2010 IPPIs with March 2011 compared with March 2010 inflation numbers (as released by Eurostat back on April 15).

Eurostat published today (May 3, 2011) the stats re Industrial Producer Prices (Industrial PPI) for March 2011.

Along with the stats published re February 2011 vy Eurostat on April 2011 (a few days before the ECB rate hike from 1.00 to 1.25%), these stats, for the EU27, as well as the Eurozone and individual members should cause IMO much concern. I have partly already tweeted and blogged some of my concerns.

1) These include a concern of mine that these stats show low integration and lack of adequate competition at least with respect to industry in the EU and its Single Market and even more importantly, in the Eurozone and among its members. Because while the prices of industrial inputs are higher due to hikes in world prices of energy and some foods, the very high Industrial PPIs show that firms choose to pass on a very large part of those down the line, ie to the whole-sellers and these may eventually reach the consumer thus a major concern re CPI (ala inflation) which is already high in the Eurozone by ECB standards (ie 2% target).

What is also notable, and I have to trying to understand why, is that the IPPI for NL and Belgium, ie two economies with a strong industrial capacity and quite integrated, one would think, to their neighbour Germany, are exhibiting, compared with same month last year (February 2011 to February 2010 and now March 2011 to March 2010) very high numbers.]

Let's have a closer look, trying to think systemically:

In March 2011 compared with March 2010, industrial producer prices gained 6.7% in the Eurozone and 7.4% in the EU27. For February 2011 vs February 2010 the corresponding numbers were 6.6% and 7.1%. Note that the IPPI is higher for EU27 than the Eurozone16 and the increase compared to February in March is higher for the EU27!

Also note that (Eurostat, April 15) Eurozone annual inflation (provisional) was 2.7% in March 2011up from 2.4% in February and EU annual inflation (again provisional) was 3.1% in March 2011, up from 2.9% in February.

What will these high Industrial PPI numbers for the Eurozone and EU mean for inflation in a few months from now? And why are they so high?

But what do the IPPI numbers show re the EU single market for industrial goods, especially at the Eurozone's core (Germany, NL, Belgium, etc)? Note that whereas Germany's IPPI was Feb2Feb 6.3% and March2March 6.1% (ie without any effect by ECB rate hike later, in April), the NL's IPPI was respectively 10.3% and 10.8%! For Belgium, another close neighbour to Germany, only the Feb2Feb stat is available for now: 10.2%!

At the same time February annual inflation in Germany had registered at 2.2% and 2.3% in March (Eurostat, April 15). Thus head to head annual Industrial PPI for March stood about 380 basis points above annual March inflation in Germany (down from 410 bp in February).

In NL, annual inflation stood at 2% in February and again a privisional 2% in March. Ie 830 and 880 basis points when compared to the NL annual Industrial PPI for February and March!

Thus the NL spread is about double the Germany one! Why?

In Belgium, inflation was 3.5% both in February and March, ie 670 bps (not IPPI available yet for March in Belgium)! Again, why such large NL and Belgian spreads compared to Germany?

Now add Denmark, another close neighbour yet not fellow Eurozone member, the IPPI jumped from 5.8% Feb2Feb to 9.3% March2March!

What could be driving these large hikes and the wider differences even between neighbouring economies except, I assume, inadequate Single Market integration and inadequate competition? If you have a different explanation, feel free to add it via the comments or a tweet @nppolicyanalyst!

2) Most hikes are largest in the EU27 than in the Eurozone

Industrial producer prices on the domestic market, % change compared with March of 2010

Eurozone (vs EU27)

Total industry excluding construction 6.7% (in the Eurozone) vs 7.3% in EU27
Total industry excluding construction and energy 4.5% vs 4.6% in EU27
Intermediate goods 7.9% same as in EU27
Energy 13.0% (in the Eurozone) vs 14.1% in EU27
Capital goods 1.2% vs 1.3% in EU27
Durable consumer goods 1.8% vs 1.9% in EU27
Non-durable consumer goods (in the Eurozone) 2.9% vs 3.4% in EU27

Note the 3 areas of major differences between the Eurozone and EU27:
1) Total industry excluding construction 6.7% (in the Eurozone) vs 7.3% in EU27

2) Energy 13.0% (in the Eurozone) vs 14.1% in EU27
3) Non-durable consumer goods (in the Eurozone) 2.9% vs 3.4% in EU27

Can you offer an explanation why?

March 2011 UK Industrial Producer Prices up 10.8% compared with March 2010!

According to Eurostat stats released yesterday, in March 2011 compared with March 2010, UK industrial producer prices gained a whopping 10.7%.

That is the 3rd largest hike among the EU27 for which data are available (NL's was 10.8% whereas Bulgaria's 12.1%) and 2nd among the non-Eurozone EU member economies! The February 2011 compared with February 2010 number had been lower but still quite high, 9.8%!

According to Eurostat stats (released back in April 15) re inflation in March 2011, UK's was 4.0% (annualised, ie March 2011 compared with March 2010), down from 4.4% in February, but same as in J.anuary

According to economists, Producer Prices are an indication as to what inflation will be a few months later. Thus the 10.8% IPPI figure for March seems cause for concern.

Taking into consideration that in March 2011 compared with March 2010, industrial producer prices gained 6.7% in the Eurozone and 7.4% in the EU27 and in February 2011 vs February 2010 the corresponding numbers were 6.6% and 7.1%, that causes concerns re the systemics related to the UK industry.

EU & Eurozone "naked" against global winds (or whims)?

While xenophobia tries to scapegoat immigrants:

Are the EU and its Eurozone defenceless vis-a-vis the global financials winds (or whims)?

Are they also defenceless vis-a-vis the global hikes in the prices of energy and staple foods?

Can the EU do something about them? Does it have the will to (via real union)?

Time we start talking of EU or Eurozone or EUroplus "sovereignty"?

Beyond greedy Finance and dogmatic Economics

1st of May: International Workers Day

Time to liberate people from the chains of greedy Finance and dogmatic Economics!

In other words:

a) to put finance again where it belongs, ie not at the center of the economy, but in an assisting role (where it once was, a service to the real economy)

b) for Economics to move past theories that have acquired dogmatic status and remake Economics a useful but less deterministic tools in understanding the economic behaviour of people and organisations.

Capital vs Humans, the EPP, PES, ELDR way?

According to the Guardian today, "EU executive considers reimposing border controls" (please read the article then my comments).

Is it a coincidence that all 3 key players in this, ie Sarkozy, Berlusconi & Barroso are all from the EPP European political party? The party that takes public pride in having 15 or 16 of the 27 heads of state/government as its members?

That via its majority in the European Council and the European Parliament has EPP members in all 3 top EU positions, at present, ie:

1) Presidency of the European Commission (where a majority of the Commissioners were proposed by EPP member parties/leaders in government)?

2) Presidency of the European Council (where again it has a majority, ie among the heads of state/government of the 27)

3) Presidency of the European Parliament (where its national members hold a total of 265 seats out of 736, the biggest and thus most influential group in the EP, eg as a result the EP's current President is from the EPP ).

I) Is the change considered by the Commission's President to Schengen in line with "EPP values"? In line with European values?

II) What is the real value or use of the European political parties and political groups thereof in the EU policy making? In European integration?

IMO, the EPP has to prove its EU "values" in the Schengen issue since the parties involved, ie Sarkozy, Berlusconi and Barroso are EPP.

But that "burden" is not only for the EPP.

IMO, the EPP, the ELDR and the PES have to adopt clear positions on issues such as Schengen, Immigration, etc, that both reflect & bind all their member national parties and leaders. Otherwise, what is their real use when compared eg with more generic (and less binding) international groupings such as the Socialist International etc?

In other words, when the going gets tough, the tough get going, thus the EPP and other key EUropean political parties have to show their mettle in these hard and crucial times.

Capital vs Humans, the EU way?

According to the Guardian today, "EU executive considers reimposing border controls" (please read the article then my comments).

This prompts me to think:

Capital vs Humans (1): Why does EU have a common trade policy (ie for foreign capital, goods, services etc) but not common #immigration policy (ie for labour and humans in general)?

Does the EU (and its 27 members, more importantly) put capital & goods above labour/humans?

Capital vs Humans (2): If members can temporarily suspend Schengen, then why not also temporarily suspend the EU Single Market for goods, especially when they are foreign made?

Sad days for "EUropean values", IMO.

There are also important consequences for the EU's political parties (eg EPP, PES, ELDR) but I address those in a separate post.

Une fois, une seule fois (poem)

Une fois, une seule fois

A kiss so wet
A dry adieu
Today in love
Tomorrow goodbye

Next summer
Next year
Next century
Next life

Once, only once,
and then the rain
on our windows
This is the Winter of our Summertime memories


July 2005.


Here is the relevant song I made (April 2011):