A number of EU member states can form a political union between them (outside the EU Treaty) and continue to be members of the EU but as a single member state!!
So if let's say all 17 Eurozone members merged into one (federal country) then this new country, let's call it "Federal Republic of Europe" (FRE) could be a member of the EU instead of the 17, in other words an EU with 11 (10+1) member states.
Of course this new "country", FRE, would have its own publlc servants and its own institutions which would probably be staffed by former members of the former national administrations.
If indeed this country consisted of all members of the Eurozone, then that would go a long way towards solving the Euro crisis. It would have a Prime Minister elected in the same or similar way the German PM is, have a federal tax system and a federal "IRS" to administer it, maybe its own army, and of course FRE-wide laws. Its own bonds, etc.
Now, if this new country did not match the current Eurozone in membership, that would not help solve the Euro crisis, ie the Euro would not gain a country, but it would still go a long way towards the destination of European integration. Over the years and decades more European counties, EU members or not, would merge into this FRE country.
That would not be good new for the EU per se, but the EU (much like the EEC) is but a vehicle for European integration. What matters is European integration not the EU per se.
This FRE solution could work irrespective of the future of the Euro, even providing alternative impetus in Euro's worst case scenario (the FRE would not necessarily have a single currency at least at first).
There are other solutions too of course.
Tuesday, September 27, 2011
Friday, September 23, 2011
The recipe for growth and jobs
If politicians, governments and policy makers want growth and jobs then they must reduce the quantity and improve the quality of legislation, new and existing; so simple and yet so hard to do.
Governing Dynamics: Competition or Cooperation?
Events of the day IMO show that:
a) Countries and their governments have to decide whether the global economy is a competition or a cooperative "game".
b) Markets need to learn to "chillax"
a) Countries and their governments have to decide whether the global economy is a competition or a cooperative "game".
b) Markets need to learn to "chillax"
Thursday, September 22, 2011
Even a free trade area does not allow "polyamory" in trade, does it?
The other day I was having a discussion on current affairs and dynamics in Europe and the world with an economist friend. Mind you, yours truly is not an economist but an MBA with 2 more degrees (a BS and an MS in decision sciences).
During the discussion the topic of "customs unions" and "free trade areas" came up. My friend gave me a POV that has proved valuable food for thought: He argued that a customs union between let's say countries A, B and C, implies a clear intent by these three countries to trade primarily between them as opposed to a global scope in trade.
If that is true of a customs union (which is what the UK claims it joined in the 1973 EEC), a "common market" as my 50s plus barber in Brussels called the EEC back in 1992, then that is even more true of a "Single Market" (launched on 1/1/1993).
What does all this mean?
That members of the current EU, the Eurozone, even those who claim they openly want a "free trade area" Europe (UK Tories etc), have to de juris accept that all these are not compatible with a multi-lateral global free trade system (WTO, ex-GATT), that members of non only the EU but also EFTA, ASEAN, Mercosur and the emerging UNASUR must have, explicitly or at least implicitly, the will and view of trading mostly (to say the least) with their partners!
And what is more, if they do not, then they should not be a member of any such entity and rely exclusively on the WTO membership.
Thus:
a) If the UK does not want to export and import mostly within the EU27 Single Market, then it has no place in the EU
b) If Germany sees China and Russia as its key trade partners from now on, then it too has no place in the EU or its Eurozone.
and so on!
Thus, if my economist friend is right, membership in the EU or even as its old EEC or "common market" form presupposes a commitment to trade with mostly the other members (at the expense of global (WTO etc) trade).
Consider that!
During the discussion the topic of "customs unions" and "free trade areas" came up. My friend gave me a POV that has proved valuable food for thought: He argued that a customs union between let's say countries A, B and C, implies a clear intent by these three countries to trade primarily between them as opposed to a global scope in trade.
If that is true of a customs union (which is what the UK claims it joined in the 1973 EEC), a "common market" as my 50s plus barber in Brussels called the EEC back in 1992, then that is even more true of a "Single Market" (launched on 1/1/1993).
What does all this mean?
That members of the current EU, the Eurozone, even those who claim they openly want a "free trade area" Europe (UK Tories etc), have to de juris accept that all these are not compatible with a multi-lateral global free trade system (WTO, ex-GATT), that members of non only the EU but also EFTA, ASEAN, Mercosur and the emerging UNASUR must have, explicitly or at least implicitly, the will and view of trading mostly (to say the least) with their partners!
And what is more, if they do not, then they should not be a member of any such entity and rely exclusively on the WTO membership.
Thus:
a) If the UK does not want to export and import mostly within the EU27 Single Market, then it has no place in the EU
b) If Germany sees China and Russia as its key trade partners from now on, then it too has no place in the EU or its Eurozone.
and so on!
Thus, if my economist friend is right, membership in the EU or even as its old EEC or "common market" form presupposes a commitment to trade with mostly the other members (at the expense of global (WTO etc) trade).
Consider that!
Monday, September 19, 2011
In view of the election results in Berlin ....
In view of the results in the state (land) election in Berlin, please read below an excerpt from my post of June 7, 2010 (15+ months ago): Various Thoughts on EU, US and other affairs, June 1-5
.. I re-iterate my view that it would be in Germany's national interest & the EU's for Mrs Merkel to re-do the grand coalition with SPD (2005-09) ...
Friday, September 16, 2011
Straight out of the Middle Ages?
The budget crises in Europe and the US pose the question: What are the priority responsibiities of a State? On that , my view can be found in my August 14 post "EU & USA: The right policies can come from the center".
What I find astounding is that some European and American politicians' views (re the EU, Euro, the EU budget, non solirity to uninsured people, divorcing Alzheimer's patients) are as if they just stepped out of a time machine straight out of the Middle Ages.
Real human values are not abandoned in difficult times: That is Europe's real deficit and real crisis! Will it default on them (values)? Is Europe going to throw its Social Model (eg UK's NHS) into the Kaiada river (see Ancient Sparta) instead of exporting it to the rest of humanity?
Is Europe returning to its Medieval (brutal etc) past? Or will be surprise us and lead humanity into a new Renaissance
What I find astounding is that some European and American politicians' views (re the EU, Euro, the EU budget, non solirity to uninsured people, divorcing Alzheimer's patients) are as if they just stepped out of a time machine straight out of the Middle Ages.
Real human values are not abandoned in difficult times: That is Europe's real deficit and real crisis! Will it default on them (values)? Is Europe going to throw its Social Model (eg UK's NHS) into the Kaiada river (see Ancient Sparta) instead of exporting it to the rest of humanity?
Is Europe returning to its Medieval (brutal etc) past? Or will be surprise us and lead humanity into a new Renaissance
Outside the box: To each his own?
Thinkin outside the box:
Should governments. states & public sector in general only be allowed to borrow from other such entities, ie not from the financial markets?
Should governments. states & public sector in general only be allowed to borrow from other such entities, ie not from the financial markets?
On Wisdom, Markets, Philosopher-Kings and Philosopher-PMs
Time to pause and realise what has been going on in Europe, USA & the world!
Ponder on this: Sure there are socio-econ-policy-political problems in Europe & the world but it's the role of the financial markets to propose/force solutions?
I may or may not believe there is wisdom in the markets but I certainly don't believe in the wisdom of the financial markets!
We do not need philosopher-kings of Markets, we need philosopher-PMs of democratic States!
Ponder on this: Sure there are socio-econ-policy-political problems in Europe & the world but it's the role of the financial markets to propose/force solutions?
I may or may not believe there is wisdom in the markets but I certainly don't believe in the wisdom of the financial markets!
We do not need philosopher-kings of Markets, we need philosopher-PMs of democratic States!
Euro or the Social Model?
Is the goal of all this jazz
a) to break up the Euro or
b) to dismantle and priivatise the European Social Model?
Seems both.
a) to break up the Euro or
b) to dismantle and priivatise the European Social Model?
Seems both.
I ..... therefore I am?
I think therefore I am?
I feel therefore I am?
Both?
Nowadays there are many out there who are trying to manipulate either our feelings or out thoughts or both. We need the tool to protect our thoughts and feelings from their "games".
I feel therefore I am?
Both?
Nowadays there are many out there who are trying to manipulate either our feelings or out thoughts or both. We need the tool to protect our thoughts and feelings from their "games".
Tuesday, September 13, 2011
Can a conservative Europe be a united one?
With so much "noise" in current affairs these days it pays to read yesterday's news (for distance and thus better POV)
I was reading the New York Times article "German Leader Faces Key Choices on Rescuing Euro" of September 12 and it got me thinking: Can an SPD-Greens government make a difference in moving forward?
Of course one can now, in retro, say (as I have argued in tweets and posts in recent months) that a continuation of the 2005-09 Grand German coalition (CDU/CSU-SPD) in 2009-2013 would have avoided many of the mistakes of the CDU/CSU-FDP one. That the coalition with FDP has proved disastrous Germany and Europe. The populist mud slinging toxic propaganda against Greece and the rest of the South has helped no one.
Thus begging the question: Can a united Europe be a conservative one, or rather, can a conservative Europe be a united one (in the sense of a real "European Union" not the current wishy-washy institutional monstrosity)?
Or maybe an EPP/PES "grand coalition" national governments in all/most member states is the solution.
Alas not a liberal one in the ELDR sense because some of its members have in effect neo-liberal or even conservative (politically and philosophically) views (eg FDP, VVD) while some have liberal democrat (ie centrist) ones eg D66.
Bottom line: It seems that a united Europe presupposes a progressive majority ie a mix of mostly PES (social democratic) with the truly liberal democratic/centrist/moderate part of ELDR & some progressive EPP elements.
Sunday, September 11, 2011
Marketing analysis: npthinking stats
1) npthinking tweets
Based on data about @npthinking compiled from http://www.twocation.com
On 16/8, with 1069 followers vs 2/9 with 1213 followers vs 11/9 with 1248 followers
12 countries had market shares higher than 1% on 16/8. 14 on 11/9.
USA
2) npthinking blog:
Last 30 days
Of total pageviews:
USA 33.8%
France 4.2%
UK 3.9$
Germany 2.8%
Russia 2.8%
Greece 2.7%
Canada 1.6%
Israel 1.6%
Belgium 1.5%
Finland 0.95%
9 countries over 1%.
Top post of the month 4.1% of total pageviews
Based on data about @npthinking compiled from http://www.twocation.com
On 16/8, with 1069 followers vs 2/9 with 1213 followers vs 11/9 with 1248 followers
12 countries had market shares higher than 1% on 16/8. 14 on 11/9.
USA
16/8: 29.50% x 1069 = 315
Belgium
Sweden
Italy
2/9: 34.90% x 1213 = 423 +118
11/9: 34% x 1248 = 424
11/9: 34% x 1248 = 424
UK
14.20% x 1069 = 152
12.90% x 1213 = 156 +4
13.30 x 1248 = 166
Greece
12.30% x 1069 = 131
13.10 x 1213 = 159 +28
14.10 x 1248 = 176
Belgium
11.00 x 1069 = 118
7.10 x 1213 = 86 = -32
6.10% x 1248 = 76
6.10% x 1248 = 76
Ireland
4.00 x 1069 = 42.8
2.90% x 1213 = 35
2.90 x 1248 = 36
2.90 x 1248 = 36
Spain
3.20%
2.90% x 1213 = 35
3.40 x 1248 = 42
Canada
3.20
4.20% 1213 = 51
4.00 x 1248 = 50
4.00 x 1248 = 50
NL
2.10
1.30% x 1213 = 16
1.30 x 1248 = 16
1.30 x 1248 = 16
France
2.10
1% x 1213 = 12
1.10 x 1248 = 14
1.10 x 1248 = 14
Australia
1.90
2.40% x 1213 = 29
2.40 x 1248 = 30
2.40 x 1248 = 30
Portugal
1.60
1.30% x 1213 = 16
1.60 x 1248 =
1.60 x 1248 =
Germany
1.30
1.80% x 1213 = 22
2.10 x 1248 = 26
Sweden
2/9 1% z 1213 = 12
11/9: 1.10 x 1248 = 14
11/9: 1.10 x 1248 = 14
Italy
2/9: 1.10 x 1248 = 14
Mexico
0.50
0.80% x 1213 = 10
0.50 x 1248 = 6
Regional:
Norway 0.30% x 1248 = 4
Denmark 0.50 x 1248 = 6
Finland 0.30 x 1248 = 4
Sweden 1.10 x 1248 = 14
Total 28
Estonia 0.30 x 1248 = 4
Latvia 0
Lithuania 0
Total > 4
Hungary 0.30% > 4
Czech R. 0
Slovakia 0
Austria 0.30% x 1248 = 4
Switzerland 0.50% x 1248 = 6
Slovenia 0
Total > 14
Croatia 0 (I know of at least 1 though)
Bulgaria 0 (I know of at least 1 though)
Romania 0
Cyprus 0.30 > 4
Malta 0
BRICs
Brazil 0.80% x 1248 = 10
Russia 0.30 x 1248 = 4
China 4
India 6
Total >
Ukraine
Lux 0
EU analysis:
Greece 14.10 x 1248 = 176
Belgium 6.10% x 1248 = 76
Ireland 2.90 x 1248 = 36
Spain 3.40 x 1248 = 42
NL 1.30 x 1248 = 16
France 1.10 x 1248 = 14
Portugal 1.60 x 1248 = 20
Germany 2.10 x 1248 = 26
Italy 1.10 x 1248 = 14
Finland 0.30 x 1248 = 4
Estonia 0.30 x 1248 = 4
Cyprus 0.30 > 4
Malta 0
Austria 0.30% x 1248 = 4
Slovenia 0
Lux 0
Slovakia 0
>>>> Total Eurozone: 436 (35% of total number of followers)
UK 13.30 x 1248 = 166
Denmark 0.50 x 1248 = 6
Sweden 1.10 x 1248 = 14
Latvia 0
Poland 0 (altho I know at least 1)
Lithuania 0
Hungary 0.30% > 4
Czech R. 0
Bulgaria 0 (I know of at least 1 though)
Total non-EZ: 192
Total EU
436 + 192 = 628 (50% of 11/9 total)
2) npthinking blog:
Last 30 days
Of total pageviews:
USA 33.8%
France 4.2%
UK 3.9$
Germany 2.8%
Russia 2.8%
Greece 2.7%
Canada 1.6%
Israel 1.6%
Belgium 1.5%
Finland 0.95%
9 countries over 1%.
Top post of the month 4.1% of total pageviews
Saturday, September 10, 2011
Does Europe have the wisdom? Apparently not! Others can rejoice!
Europe is way too old not to have the wisdom needed for federal union.
In his Conscience of a Liberal column at the New York Times today: "Starkness Falls", Paul Krugman, professor at Princeton and former professor at my alma mater (MIT - note: Krugman also has a PhD from MIT, yours truly an SB), paints the most clear picture of the EU and the Eurozone I have read or heard in all the 00000s of pages written on the Euro crisis and related issues in recent months.
Read it here
Two short yet key excerpts:
1) "... the message that there will be no such lender of last resort, that there isn’t enough political cohesion in the eurozone to stand behind countries under market attack"
2) "You little know, my friends, with how little wisdom the world is governed"
(2) Can be dedicated to the leaders of the EU, the EZ & its members (27 and 17 respectively).
Maybe we Europeans do not deserve a united Europe because we lack the collective wisdom and solidarity as well as sense of community.
When in the near future Europe has become irrelevant in the world, historians will focus on this period to tell and explain why.
The price of (1) is and will be paid by all Europeans, to varying extents and degrees.
All members are at fault in varying degrees and ways.
a) The UK, France and Germany (and maybe Italy and Spain) are guilty of using the EEC/EU for grandstanding. One can only be reminded of the UK-France, France-Germany, Germany-UK Summits. Plus the 12/10/2010 "US Diplomats in the EU: Manipulating the Political Dwarves of Europe" report in Spiegel International is telling of this. So is the fact that they have kept their individual membership "cards" at all international organisations, including the UN Security Council, the G7/8, etc!
b) the other member states, are guilty of not calling out the big 3 on their behaviour and of not uniting to demand a real community and eventually union.
What the markets have done (since the CDSs invented in the last 90s came into play as major tools) is expose the nakedness of the European project due to lack of real community.
The EU and EZ have proved to be a group of scorpions and frogs (see the relevant fable) in this crisis.
SO with 3-5 members grandstanding & the rest lacking a sense of true community, the EU & EZ have come to this. China, US, Russia et al including of course the "Markets" can rejoice. Although they will too feel the effects. But a potential major node in world affairs is imploding. And Europe will continue to be a loose group (a un-organised "park") of quaint "villages" for tourists to visit. And for the world's true major powers to play games on, economic and other.
Europe has not managed to use its history to wise up. Including 2 wars that became world ones in the 20th century and hundreds in its history. Maybe a real community spirit was too much to expect from a group that includes so many former Imperial or colonial powers. Too many to mention out of the 27.
So, the reality is that Europe does not have what it takes to become an A-List entity in the world. But the world .(Earth) turns and will continue to. With or without "Europe".
Brave old Europe.
Better start learning Chinese.
In his Conscience of a Liberal column at the New York Times today: "Starkness Falls", Paul Krugman, professor at Princeton and former professor at my alma mater (MIT - note: Krugman also has a PhD from MIT, yours truly an SB), paints the most clear picture of the EU and the Eurozone I have read or heard in all the 00000s of pages written on the Euro crisis and related issues in recent months.
Read it here
Two short yet key excerpts:
1) "... the message that there will be no such lender of last resort, that there isn’t enough political cohesion in the eurozone to stand behind countries under market attack"
2) "You little know, my friends, with how little wisdom the world is governed"
(2) Can be dedicated to the leaders of the EU, the EZ & its members (27 and 17 respectively).
Maybe we Europeans do not deserve a united Europe because we lack the collective wisdom and solidarity as well as sense of community.
When in the near future Europe has become irrelevant in the world, historians will focus on this period to tell and explain why.
The price of (1) is and will be paid by all Europeans, to varying extents and degrees.
All members are at fault in varying degrees and ways.
a) The UK, France and Germany (and maybe Italy and Spain) are guilty of using the EEC/EU for grandstanding. One can only be reminded of the UK-France, France-Germany, Germany-UK Summits. Plus the 12/10/2010 "US Diplomats in the EU: Manipulating the Political Dwarves of Europe" report in Spiegel International is telling of this. So is the fact that they have kept their individual membership "cards" at all international organisations, including the UN Security Council, the G7/8, etc!
b) the other member states, are guilty of not calling out the big 3 on their behaviour and of not uniting to demand a real community and eventually union.
What the markets have done (since the CDSs invented in the last 90s came into play as major tools) is expose the nakedness of the European project due to lack of real community.
The EU and EZ have proved to be a group of scorpions and frogs (see the relevant fable) in this crisis.
SO with 3-5 members grandstanding & the rest lacking a sense of true community, the EU & EZ have come to this. China, US, Russia et al including of course the "Markets" can rejoice. Although they will too feel the effects. But a potential major node in world affairs is imploding. And Europe will continue to be a loose group (a un-organised "park") of quaint "villages" for tourists to visit. And for the world's true major powers to play games on, economic and other.
Europe has not managed to use its history to wise up. Including 2 wars that became world ones in the 20th century and hundreds in its history. Maybe a real community spirit was too much to expect from a group that includes so many former Imperial or colonial powers. Too many to mention out of the 27.
So, the reality is that Europe does not have what it takes to become an A-List entity in the world. But the world .(Earth) turns and will continue to. With or without "Europe".
Brave old Europe.
Better start learning Chinese.
Sur-le-terrain of the European reality show
In the meantime, sur-le-terrain of Europe, SMEs need uniform European laws in order to have a REAL single market not this Single European Act Babel of 1992.
To work for independents, micros and SMEs the EU SIngle Market needs uniform/single laws, a single tax system, ie full political union.
It's a disgrace 4 the European "union" tht double tax avoidance inside the EU is based on bilateral agreements of the 27! EU federal tax is needed now.
An EU-wide "NHS" would have the economies of scale to survive the hawks attacks on the European Social Model.
An EU-wide income tax system would make intra-EU, intra-Single Market relocation, mobility etc more practical for the average person & firm
EU-wide operators of landline & mobile telephony wld make for a better functioning single market. Same for energy, water & other utllities. And of course banks with offices all over the EU27 territory are needed for a real single market.
To work for independents, micros and SMEs the EU SIngle Market needs uniform/single laws, a single tax system, ie full political union.
It's a disgrace 4 the European "union" tht double tax avoidance inside the EU is based on bilateral agreements of the 27! EU federal tax is needed now.
An EU-wide "NHS" would have the economies of scale to survive the hawks attacks on the European Social Model.
An EU-wide income tax system would make intra-EU, intra-Single Market relocation, mobility etc more practical for the average person & firm
EU-wide operators of landline & mobile telephony wld make for a better functioning single market. Same for energy, water & other utllities. And of course banks with offices all over the EU27 territory are needed for a real single market.
A one policy fits all need not be a straight-jacket
The Germans have a problem with the direction of ECB (see "Juergen Stark in surprise resignation from ECB" on bbcnews.com)? If so, then what should the PIIGS say re ECB's Bundesbankish inflation phobia?
Rigid, antiquated, dogmatic economic thinking is putting European integration in peril (along with populist politicking)
Has the ECB inflation policy 2002-present reflected an equilibrium of the needs of all parts of the Eurozone or just a few of its members?
More Operations Research techniques and POV have to be applied to policy making. Europe needs more decision scientists in policy making (has more than enough politics, economics and finance)
Use of multivariate and Regression analysis in policy making can help Europe avoid a new recession and adopt a uniform economic policy that is an equilibrium of the need of the parts of the whole. That is what happens at national levels already, not a rocket science!
Plus since policy is a bundle of measures, it can it calibrated so as to maximise the benefits for the parts of the whole as well as the whole.
That is why I say, bring in the decision scientists in the policy making "room".
Rigid, antiquated, dogmatic economic thinking is putting European integration in peril (along with populist politicking)
Has the ECB inflation policy 2002-present reflected an equilibrium of the needs of all parts of the Eurozone or just a few of its members?
More Operations Research techniques and POV have to be applied to policy making. Europe needs more decision scientists in policy making (has more than enough politics, economics and finance)
Use of multivariate and Regression analysis in policy making can help Europe avoid a new recession and adopt a uniform economic policy that is an equilibrium of the need of the parts of the whole. That is what happens at national levels already, not a rocket science!
Plus since policy is a bundle of measures, it can it calibrated so as to maximise the benefits for the parts of the whole as well as the whole.
That is why I say, bring in the decision scientists in the policy making "room".
Wednesday, September 7, 2011
EU: Who kicked the can down the road? (mach 2)
This is a follow up (part or is it mach 2) of my September 5 post:
EU: Who kicked the can down the road? Merkel and Sarkozy or their predecessors?
First of all, one clarification. According to an article (September 7) in emirates247.com "Battle under way for soul of 'United States of Europe" it is not that clear after all if the German Minister of can be counted among the fans of a United States of Europe. According to the last 3 paragraphs of the article, he wrote a column in the Financial Times, in which he "laid bare "my unease when some politicians and economists call on the eurozone to take a sudden leap into fiscal union and joint liability."" According to the same article "... and that the answer to the crisis, despite it being politically painful, is for states to live within their means.".
In the meantime, the Council for the Future of Europe of The Berggruen Institute issued (September 6) a Statement by the Council for the Future of Europe: EUROPE IS THE SOLUTION, NOT THE PROBLEM" (PDF) The conclusions include:
"Supporting European integration is not a matter of solidarity but of enlightened self-interest. It is time to address the big questions in order to preserve the unique European balance of individual freedoms, market economy and systems of social protection. For us, Europe is the only solution."
"Them" includes Tony Blair, Jacques Delors, Felipe González, Mario Monti, Gerhard Schröder,
Matti Vanhanen, Guy Verhofstadt, Nicolas Berggruen, Mohamed El Erian, Niall Ferguson, Anthony Giddens (father of the "Third Way"), Alain Minc, Robert Mundell, Nouriel Roubini and Joseph Stiglitz (Nobel in Economics).
Yet as emirate247.com reports, "former prime minister Matti Vanhanen broke from the group's agreed statement and admitted: "I'm not so fond of federalism as such.""
Here is my POV. What Europe, the EU, the EU Single Market ie not only the Euro need is a single political entity, in federal form (eg like the US of America or the Federal Republic of Germany). The fiscal vs transfer union is IMO a pseudo-dilemma because political union means the creation of a federal budget financed mostly by a federal income tax (US style) on persons and companies, administered by a federal (IRS like) authority.
As I have argued before, in tweets mostly, it is actually the cheapest solution out of the crisis, for the average German, Finn, Dutch etc taxpayer. in that via a federal tax by a federal "Euro IRS" the burden will not be falling on "paymaster" countries and their taxpayers anymore but n=on high income earning persons and companies inside the federal union irrespective of nationality or state of residence within the federal union!
IMO Eurobonds alone are not the solution. Or fiscal or transfer union. Only full union. Clear and straight, to be understood by the citizens, without any of the traditional EU or member states' fuzz! For more on this, see my May 9, 2011, post "The EU's No. 1 problem is .....".
Now, we come to maybe the most interesting bit:
While Cameron supports closer integration if the Eurozone becauses he thinks that the needed EU Treaty changes will give him a chance to negotiate in return for allowing the Eurozone to move ahead, repatriation of certain "competemces" back to the UK (from "Brussels"), it seems, according at least to my reading of the 09/05/2011 "Divide and Rescue: Berlin Lays Groundwork for a Two-Speed Europe" report in Spiegel Online International that the Treaty that will move the Eurozone towards political union (uniform labour laws, budgetary "unification" (to what extent we shall see), etc etc) will not be an EU one, but. like Schengen (when it was set up), "hors EU"! That means that the UK, unless it joins this 1st speed union (ultra highly unlikely), will not have a say in it or get to vote on it! Any referendums will be by the participating states! Bazinga?!
That also raises the issue of the role of the European Commission, the ECJ, the European Parliament, the Council of the EU, etc, as well as the European Council in the operation of the "EU Mach 2". It seems that the Eurogroup plus other, new, bodies, probably lean, will be set up to do the "job". The EU institutions will continue to operate the affairs of the EU27 but the "EU Mach 2" will have its own institutions. Can there be another way considering that:
a) Cameron wants to use an EU27 IGC to get his way, thus a change in the EU Treaties must be avoided by the rest.
b) Not all members of the EU27 will be participating in this "closer union"?
To be continued!
PS. That would also mean that the "hors EU" Treaty of the core union cannot change the EMU/Euro aspects of the EU Treaty, ie exit from the Eurozone/Euro will continue to be not an option. That IMO means that all 17 of the existing EZ members will participate in the core union, unless they figure out a way of having a Euro member not be part of the core union and still have the who thing work! Does not look likely!
PS2. Times are beyond interesting. But at least there is a reversal of direction, from backwards to forward. Unless of course Angela Merkel and/or the CDU change their minds, yet again!
EU: Who kicked the can down the road? Merkel and Sarkozy or their predecessors?
First of all, one clarification. According to an article (September 7) in emirates247.com "Battle under way for soul of 'United States of Europe" it is not that clear after all if the German Minister of can be counted among the fans of a United States of Europe. According to the last 3 paragraphs of the article, he wrote a column in the Financial Times, in which he "laid bare "my unease when some politicians and economists call on the eurozone to take a sudden leap into fiscal union and joint liability."" According to the same article "... and that the answer to the crisis, despite it being politically painful, is for states to live within their means.".
In the meantime, the Council for the Future of Europe of The Berggruen Institute issued (September 6) a Statement by the Council for the Future of Europe: EUROPE IS THE SOLUTION, NOT THE PROBLEM" (PDF) The conclusions include:
"Supporting European integration is not a matter of solidarity but of enlightened self-interest. It is time to address the big questions in order to preserve the unique European balance of individual freedoms, market economy and systems of social protection. For us, Europe is the only solution."
"Them" includes Tony Blair, Jacques Delors, Felipe González, Mario Monti, Gerhard Schröder,
Matti Vanhanen, Guy Verhofstadt, Nicolas Berggruen, Mohamed El Erian, Niall Ferguson, Anthony Giddens (father of the "Third Way"), Alain Minc, Robert Mundell, Nouriel Roubini and Joseph Stiglitz (Nobel in Economics).
Yet as emirate247.com reports, "former prime minister Matti Vanhanen broke from the group's agreed statement and admitted: "I'm not so fond of federalism as such.""
Here is my POV. What Europe, the EU, the EU Single Market ie not only the Euro need is a single political entity, in federal form (eg like the US of America or the Federal Republic of Germany). The fiscal vs transfer union is IMO a pseudo-dilemma because political union means the creation of a federal budget financed mostly by a federal income tax (US style) on persons and companies, administered by a federal (IRS like) authority.
As I have argued before, in tweets mostly, it is actually the cheapest solution out of the crisis, for the average German, Finn, Dutch etc taxpayer. in that via a federal tax by a federal "Euro IRS" the burden will not be falling on "paymaster" countries and their taxpayers anymore but n=on high income earning persons and companies inside the federal union irrespective of nationality or state of residence within the federal union!
IMO Eurobonds alone are not the solution. Or fiscal or transfer union. Only full union. Clear and straight, to be understood by the citizens, without any of the traditional EU or member states' fuzz! For more on this, see my May 9, 2011, post "The EU's No. 1 problem is .....".
Now, we come to maybe the most interesting bit:
While Cameron supports closer integration if the Eurozone becauses he thinks that the needed EU Treaty changes will give him a chance to negotiate in return for allowing the Eurozone to move ahead, repatriation of certain "competemces" back to the UK (from "Brussels"), it seems, according at least to my reading of the 09/05/2011 "Divide and Rescue: Berlin Lays Groundwork for a Two-Speed Europe" report in Spiegel Online International that the Treaty that will move the Eurozone towards political union (uniform labour laws, budgetary "unification" (to what extent we shall see), etc etc) will not be an EU one, but. like Schengen (when it was set up), "hors EU"! That means that the UK, unless it joins this 1st speed union (ultra highly unlikely), will not have a say in it or get to vote on it! Any referendums will be by the participating states! Bazinga?!
That also raises the issue of the role of the European Commission, the ECJ, the European Parliament, the Council of the EU, etc, as well as the European Council in the operation of the "EU Mach 2". It seems that the Eurogroup plus other, new, bodies, probably lean, will be set up to do the "job". The EU institutions will continue to operate the affairs of the EU27 but the "EU Mach 2" will have its own institutions. Can there be another way considering that:
a) Cameron wants to use an EU27 IGC to get his way, thus a change in the EU Treaties must be avoided by the rest.
b) Not all members of the EU27 will be participating in this "closer union"?
To be continued!
PS. That would also mean that the "hors EU" Treaty of the core union cannot change the EMU/Euro aspects of the EU Treaty, ie exit from the Eurozone/Euro will continue to be not an option. That IMO means that all 17 of the existing EZ members will participate in the core union, unless they figure out a way of having a Euro member not be part of the core union and still have the who thing work! Does not look likely!
PS2. Times are beyond interesting. But at least there is a reversal of direction, from backwards to forward. Unless of course Angela Merkel and/or the CDU change their minds, yet again!
Monday, September 5, 2011
EU: Who kicked the can down the road? Merkel and Sarkozy or their predecessors?
That is a favourite expression of some commentators re the stance of EUropean policy makers in the Euro crisis.
According to the Irish Times (September 3, 2011), Wolfgang Schäuble "reportedly told a parliamentary party meeting of the ruling Christian Democrats (CDU) that solving the euro zone crisis was not possible without a successor to the Lisbon Treaty, “even though we know how difficult a treaty change will be”".
It is envisaged that a new European treaty who have to handle far-reaching finance and fiscal powers to Brussels institutions.
Only a few days earlier, Helmut Kohl had this time publicly criticised his former right-hand-person and current German PM, Angela Merkel for her policies re Europe. So had Helmut Schmidt, Kohl social democrat predecessor in the Chancellory of Germany (ie former prime minister). Especiallu about a Germany others could not "depend on"!
In the Irish Times article mentioned above it is also reported that a new poll showed on September 2 that almost two-thirds of Germans say they want more common decision-making in Europe. 53% reject a “United States of Europe”. "Richard Hilmer of the Infratest/dimap polling agency said the results showed a clear aversion to looming euro zone rescue and reform measures. ...“But Germans remain at heart positively disposed to Europe and have nothing against further integration”"
A few hours ago (September 3), Gerhard Schröder, the social democrat German Chancellor (Prime Minister) from 1997 to 2005 (who succeeded Kohl), in an interview with Der Spiegel was kinder to Angela Merkel and spoke in favour of a United States of Europe.
What does this all mean?
In my opinion, it means that we are slowly picking up pace in reversing the current malaise in Europe and in taking the only road that is available, the road to political union in Europe. A US of Europe (or federal republic) that will stand tall next to China, the US, etc. (read Schröder's interview, in German).
Now, as I have written before (and tweeted many time more) the Maatricht European Summit (now European Council) which met in the form of an Inter-Governmental Conference to amend the EEC Treaty in Maastricht in December 1991 made a crucial error by deciding Economic and Monetary Union (the latter meant the Euro creation, the former is yet to materialise) without the foundation of a political union. In other words it decided to create a new currency but one without a country. I have also argued that political union and the single federal laws it comes with, see eg Fed Republic of Germany, a federal head of government (Germany) or state (USA), a federak income tax administered by a federal authority (in the US: the famous IRS), is a necessary foundation not only for a single currency but a single market as well (see the incomplete state of the EU Single Market 19 years after its launch on 1/1/1993).
Those public comments by no less than three (!) former heads of German government, two of which, Schmidt and Kohl, along with Mitterand, Giscard d'Estaing and others, are considered political giants of recent European history have come at a time when it is popular to accuse the current political leaders such as Merkel, Sarkozy, et al as lacking in leadership.
And, indeed, I must admit, reading the comments of Kohl reminded me of an era, not so long ago where one felt that political leaders were leaders and did not govern by looking at the opinion polls all the time or phobic of political cost.
Then I realised that it is some of those giants of European politics that did not manage to decide political union in 1991, when the EEC (then EC/EU) had only 12 members (thus in theory decision making was easier than then with 15, then 25 and now with 27). Who are the 12 heads or state or government that met in Maastricht in December 1991?
They were:
For The Netherlands: Prime-Minister, Mr. Rudolphus Lubbers.
For Belgium: Prime-Minister, Mr. Wilfried Martens.
For Danmark: Prime-Minister, Mr. Poul Schlueter.
For Germany: Chancellor, Mr. Helmut Kohl
For Greece: Prime-Minister, Mr. Constantin Mitsotakis
For Spain: President of the Council of Ministers, Mr. Felipe González
For France: President, Mr. François Mitterrand
For Ireland: Taoiseach, Mr. Charles Haughey
For Italy: President of the Council of Ministers, Mr. Giulio Andreotti.
For Luxembourg: Prime-Minister Jacques Santer.
For Portugal: Prime-Minister AnÃbal Cavaco Silva.
For the United Kingdom: Prime-Minister John Major.
(source: General Secretariat of the Council of the European Union)
Chapter 8 of europedia.moussis.eu that contains an online version of Nicholas Moussis' well known book: Access to European Union law, economics, policies, shows that (IMO monstrosity) was devised at Maatricht as a compromise. Moussis explains: "... The compromise solution that was found there and then was the partition of European integration into two Treaties (one on the European Union and one on the European Community) and into three construction pillars: the European Community - the first and main pillar; common foreign and security policy (CFSP); and justice and home affairs (JHA)...". Oh my. A legal/institutional monstrosity, something which was/is alas not a new thing for the EEC/EC/EU in the effort to reach compromises, ie in "kicking the can down the road". Read more of Nicholas Moussis' analysis of how this mess of tied up via the next 3 EU Treaties!
So, who is kicking/kicked the can down the road? Merkel, Sarkozy et al or their predecessors?
The least those who are still able to, can do, is speak up now, explain to the public opinion, and thus help their successors lead Europe where it is destined to go.
According to the Irish Times (September 3, 2011), Wolfgang Schäuble "reportedly told a parliamentary party meeting of the ruling Christian Democrats (CDU) that solving the euro zone crisis was not possible without a successor to the Lisbon Treaty, “even though we know how difficult a treaty change will be”".
It is envisaged that a new European treaty who have to handle far-reaching finance and fiscal powers to Brussels institutions.
Only a few days earlier, Helmut Kohl had this time publicly criticised his former right-hand-person and current German PM, Angela Merkel for her policies re Europe. So had Helmut Schmidt, Kohl social democrat predecessor in the Chancellory of Germany (ie former prime minister). Especiallu about a Germany others could not "depend on"!
In the Irish Times article mentioned above it is also reported that a new poll showed on September 2 that almost two-thirds of Germans say they want more common decision-making in Europe. 53% reject a “United States of Europe”. "Richard Hilmer of the Infratest/dimap polling agency said the results showed a clear aversion to looming euro zone rescue and reform measures. ...“But Germans remain at heart positively disposed to Europe and have nothing against further integration”"
A few hours ago (September 3), Gerhard Schröder, the social democrat German Chancellor (Prime Minister) from 1997 to 2005 (who succeeded Kohl), in an interview with Der Spiegel was kinder to Angela Merkel and spoke in favour of a United States of Europe.
What does this all mean?
In my opinion, it means that we are slowly picking up pace in reversing the current malaise in Europe and in taking the only road that is available, the road to political union in Europe. A US of Europe (or federal republic) that will stand tall next to China, the US, etc. (read Schröder's interview, in German).
Now, as I have written before (and tweeted many time more) the Maatricht European Summit (now European Council) which met in the form of an Inter-Governmental Conference to amend the EEC Treaty in Maastricht in December 1991 made a crucial error by deciding Economic and Monetary Union (the latter meant the Euro creation, the former is yet to materialise) without the foundation of a political union. In other words it decided to create a new currency but one without a country. I have also argued that political union and the single federal laws it comes with, see eg Fed Republic of Germany, a federal head of government (Germany) or state (USA), a federak income tax administered by a federal authority (in the US: the famous IRS), is a necessary foundation not only for a single currency but a single market as well (see the incomplete state of the EU Single Market 19 years after its launch on 1/1/1993).
Those public comments by no less than three (!) former heads of German government, two of which, Schmidt and Kohl, along with Mitterand, Giscard d'Estaing and others, are considered political giants of recent European history have come at a time when it is popular to accuse the current political leaders such as Merkel, Sarkozy, et al as lacking in leadership.
And, indeed, I must admit, reading the comments of Kohl reminded me of an era, not so long ago where one felt that political leaders were leaders and did not govern by looking at the opinion polls all the time or phobic of political cost.
Then I realised that it is some of those giants of European politics that did not manage to decide political union in 1991, when the EEC (then EC/EU) had only 12 members (thus in theory decision making was easier than then with 15, then 25 and now with 27). Who are the 12 heads or state or government that met in Maastricht in December 1991?
They were:
For The Netherlands: Prime-Minister, Mr. Rudolphus Lubbers.
For Belgium: Prime-Minister, Mr. Wilfried Martens.
For Danmark: Prime-Minister, Mr. Poul Schlueter.
For Germany: Chancellor, Mr. Helmut Kohl
For Greece: Prime-Minister, Mr. Constantin Mitsotakis
For Spain: President of the Council of Ministers, Mr. Felipe González
For France: President, Mr. François Mitterrand
For Ireland: Taoiseach, Mr. Charles Haughey
For Italy: President of the Council of Ministers, Mr. Giulio Andreotti.
For Luxembourg: Prime-Minister Jacques Santer.
For Portugal: Prime-Minister AnÃbal Cavaco Silva.
For the United Kingdom: Prime-Minister John Major.
(source: General Secretariat of the Council of the European Union)
Chapter 8 of europedia.moussis.eu that contains an online version of Nicholas Moussis' well known book: Access to European Union law, economics, policies, shows that (IMO monstrosity) was devised at Maatricht as a compromise. Moussis explains: "... The compromise solution that was found there and then was the partition of European integration into two Treaties (one on the European Union and one on the European Community) and into three construction pillars: the European Community - the first and main pillar; common foreign and security policy (CFSP); and justice and home affairs (JHA)...". Oh my. A legal/institutional monstrosity, something which was/is alas not a new thing for the EEC/EC/EU in the effort to reach compromises, ie in "kicking the can down the road". Read more of Nicholas Moussis' analysis of how this mess of tied up via the next 3 EU Treaties!
So, who is kicking/kicked the can down the road? Merkel, Sarkozy et al or their predecessors?
The least those who are still able to, can do, is speak up now, explain to the public opinion, and thus help their successors lead Europe where it is destined to go.
Thursday, September 1, 2011
Speculators, liquidity, rainy days, capitalism, Marx, Rand, mobility
66% of 2011 gone. 8 months flooded with hyped up doom and gloom
Is there an economic system that is immune to barbarism?
Many years ago, my now late mother went to a stockbroker to sell my stocks (I think it was banks'). She indicated a range of prices she would be OK with, around the current price, and had to wait for days until a buyer was found. Speculators. We were told that they provide liquidity so that the rest of us can find a buyer or seller at any time, not have to wait for days like my mother did. Well, if that is indeed the contribution of speculators to the functioning of the financial markets (or even the real estate and other ones) then obviously what we have seen in recent years is a "runaway train". Not worth the benefit of liquidity my mother could not benefit from.
Now, on a related topic. People do need a way of storing value in days of :"sunshine" for "rainy days". Are the ones available nowadays via the current "version" of "Capitalism", suitable for that job?
How much of the funds speculated around the world every day are actually savings not entrusted to managers for greed, but for maintaining "nest eggs" for "rainy days"? In that sense is the European Social Model capitalism's biggest enemy? One that must be destroyed so that people will have to depend on that markets for "safekeeping" (!) their "savings" for "rainy days"? Oh my!
Thus:
Key question: Do speculators speculate with their own money or using the money of people & orgs who have no idea what their money is used for?
Now, moving on:
Beyond Marxicm, Randism etc:
How much does 2011 capitalism have in common with 1850 capitalism? 1910? 1950? Even 1980? Please address the problems of 2011 capitalism!Using 2011 tools not 1850 or 1950 tools or even worse, antiquated economic & ideological dogmas!
Too financial times:
Do you realise how many people are sick and tired of financial and economic issues being at the forefront of current affairs? Many more than those who are sick and tired of party political news!
Politicians should stop offering voters simplistic models re what is happening & why! If they themselves don't know, should ask people who do.
Finally, ponder on this:
Bureaucracy does not like mobility (of people, workers, companies). Yet mobility, more of it, can help solve many public policy problems.
Is there an economic system that is immune to barbarism?
Many years ago, my now late mother went to a stockbroker to sell my stocks (I think it was banks'). She indicated a range of prices she would be OK with, around the current price, and had to wait for days until a buyer was found. Speculators. We were told that they provide liquidity so that the rest of us can find a buyer or seller at any time, not have to wait for days like my mother did. Well, if that is indeed the contribution of speculators to the functioning of the financial markets (or even the real estate and other ones) then obviously what we have seen in recent years is a "runaway train". Not worth the benefit of liquidity my mother could not benefit from.
Now, on a related topic. People do need a way of storing value in days of :"sunshine" for "rainy days". Are the ones available nowadays via the current "version" of "Capitalism", suitable for that job?
How much of the funds speculated around the world every day are actually savings not entrusted to managers for greed, but for maintaining "nest eggs" for "rainy days"? In that sense is the European Social Model capitalism's biggest enemy? One that must be destroyed so that people will have to depend on that markets for "safekeeping" (!) their "savings" for "rainy days"? Oh my!
Thus:
Key question: Do speculators speculate with their own money or using the money of people & orgs who have no idea what their money is used for?
Now, moving on:
Beyond Marxicm, Randism etc:
How much does 2011 capitalism have in common with 1850 capitalism? 1910? 1950? Even 1980? Please address the problems of 2011 capitalism!Using 2011 tools not 1850 or 1950 tools or even worse, antiquated economic & ideological dogmas!
Too financial times:
Do you realise how many people are sick and tired of financial and economic issues being at the forefront of current affairs? Many more than those who are sick and tired of party political news!
Politicians should stop offering voters simplistic models re what is happening & why! If they themselves don't know, should ask people who do.
Finally, ponder on this:
Bureaucracy does not like mobility (of people, workers, companies). Yet mobility, more of it, can help solve many public policy problems.
Subscribe to:
Posts (Atom)