Monday, May 7, 2012

Searching for the centre

Both Britain and Greece (as well as other countries, including the US) urgently need a genuine centrist political party that can address the policy challenges of the era without ideological sclerosis, using right of centre and left of centre and other policy tools to solve real problems of real people, in the real economy, the real society, in an ever complicated EU and world (WTO, UN, etc).

Can the LibDems be that centrist party in Britain?  They can, but they are not and do they want to?

Saturday, May 5, 2012

Europe Day 2012: May 6 instead of May 9?

Europe (EU) Day is on May 9 every year. But this year it seems that Europe (EU) day is May 6:


Because of the elections in France, Greece as well as Schleswig-Holstein; all there crucial not only for a national point of view but an EU (and Euroland) POV as well.

And if one takes account of the UK local elections, including London, of May 3, and other events of the week (see my European Calendar) then one could argue that this week Monday April 30th to May 6 is "Europe Week 2012".

PS. Of course, like other days, such a Valentine's Day, one could argue that in essence days like Europe (EU) Day are or they should be every day of the year!

PS2. Add to them the local elections in some 900 towns in Italy on Sunday and Monday.

NPEurotelex, May 5: Where is Greg House?

UK: Tories 28% down in councillors but LibDems down 44% to the levels of 30 years back! * Should Clegg follow in Westerwelle's footsteps? * Did Boris win or did Ken lose London? * Chelsea or Liverpool? * Tomorrow, Sunday, the focus moves eastwards, to France, Greece and Serbia * Und  Schleswig-Holstein * Merkonti or Merkemont? * Japan nuclear free! From 30% nuclear before last year's quake to 0% today * Competitiveness: Which of the different narratives are you buying into? #EU #Eurozone * Does the Euroland economy need someone with Gregory House's diagnostics skills, instead of dogmas? #Merkonti #Merkozy * Funny how some ppl try to decode mgs in voting results. Or in markets moves!

Have you read yesterday's NPEurotelex?

Friday, May 4, 2012

NPEurotelex, May 4: Rain and Pain. Gain?

The austerity of growth, the growth of austerity! * Now many are pro growth but which kind of growth? * The pain in Spain stays always in the ... * Argentina, now Bolivia, .... * On English soil or English grass? * April services down in France, Italy, Spain. But at least one PMI did rise (German Services PMI for April vs March, source: Markit) * The winner in the UK local elections is Labour with 12.5% (Tories 10%, Did not Vote 68%) * Localism, Nationalism, Regionalism (eg EU) or Globalism? * Was low turnout in UK local elections yesterday a sign against Localism? * Treating people the way you want to be treated assumes everyone wants to be treated your way! (phlilosopical) * It's one thing for a country of 15 or 150 million to "convert" to Capitalism, but when one of 1.3 billion does, see world in last 10 yrs (since it joined the WTO)!* Bayrou will vote for Hollande but the gap seems closing, albeit probably too late, but it's closing!

Thursday, May 3, 2012

NPEurotelex, May 3: Barcelonaaaa!!!

PMIs are down all over the place (today: USA) * Mayor of London or NYC? * Europe is learning German and the world Chinese? * ECB rate stable at 1%, still above the BOE and Fed ones * Barcelonaaaa!!!!! *  ECOFIN failed to reach an agreement on toughen bank capital rules, British resistance. Next meeting  and May 15 * The Web's dying (see Forbes)? * Mermont?  * "It's complicated" (UK voting systems) * What do France, Serbia and Greece have in common?

Wednesday, May 2, 2012

NPEurotelex, May 2: Up and Down in Euroland

Is German unemployment up or down? Pick one, depending on your European narrative! * Eurp PMI down, Euro unemployment up * Does Germany need the other Euro partners to export to? * Is Mario Angie's new Euro partner? * MPs elect new President of Hungary today * ECOFIN day today *  7 pts between Francois and Nicolas * Marine voted blank * CRAs upgrade Greece * What happened to the EU2020 Strategy for growth? * Troubles with Euro 2012 (the football one) * In need of euro-vision * Eurovision Song Contest is coming * Spanish economy exporting more outside the EU but did not avoid return to recession * What was the Euro created for? * Which country has the 5th largest population in the Euroland? * Remember the WTO? May 1-2:, General Council, Geneva * Which German state has elections on May 6? * How many European countries (3).

Tuesday, May 1, 2012

A look into some elements of Eurozone systemics

The Eurozone 17 member states have a combined population of 331 million, that is about 66% (two thirds) of the EU27 501 million.

Germany plus France account for  82+65 = 147 of the 331 million, ie 44.4% of the seats in a theoretical (does not exist, yet?) Eurozone parliament. If there was an upper house, they would only have 4 of 34 "senators" (if the US Senate system was used) or bit more than 2/17 if a "Bundensrat" system was used (3-5 votes per member, depending on population size).

If one adds Spain + Italy (population 60+46 = 106 million) then one realises that 4 of the 17 Euro members account for 253 of the 331 million in population, 76.4%! So 3 out of 4 Eurozone inhabitants live in just 4 of its 17 members.

By comparison, in the EU27, the 6 largest members (Germany, France, UK, Italy, Spain and Poland) account for 253+47+38 = 338 of the 501 or 67.5% of the total EU population (roughly two out of 3).

So the population weight of the 2 and the 4 largest members in the Eurozone is quite high. 44.4% and 76.4% respectively.

Of the other 13 members, only 5, NL (16.6), Greece (11.3), Belgium (10.9), Portugal (10.6) and Austria (8.4) have between 8 and 16.6 million in population, 57.8 million in total of the 331 million (17.5%).

So 9 larger of the 17 members have a combined population of 93.9%!
The rest are:
Slovakia  5.4
Finland 5.3
Ireland 4.5
Slovenia 2.0
Estonia 1.3
Cyprus 0.8
Luxembourg 0.5
Malta 0.4

There are many ways to look at the systemic and composite picture of the Eurozone (and the EU of course):

a) GDP
b) GDP per capita
c) Population
d) Inter-governmental

We looked at (c). Many look at (a) and (b). One problem of (a) and (b) is that it treats richer countries and citizens of richer countries (GDP per capita) as more important than the rest. That would not be OK in a political union where each citizen/vote should count the same (but not the case in the US with their electoiral college system and the winner takes all electors system most US states use in the Presidential election).

A mix of (c) and (d) would be the case in a US of Euro or Federal Republic of Euro scenario.
At the current stage, many think the IG (d) way is the way to decide things in the Eurozone. Yet many complain that Germany and France try, under Merkozy together, to run things in the Eurozone.

Well. they do have 44.4% of the people and a large part of the Euro17 total GDP.

Other members, such as the Netherlands and Finland, want more say than 1/17 or their populatoon share, because not only of their GDP per capita but also of their CRA ratings (when in crisis and bailout times).

In finance, things get more complicated. The complex nature of the financial systemics and the resulting contagion risks show that when systemics are more integrated towards a real system (and whether one likes it or not,  finance brings the Euro17 "closer" together than politics or economics or trade or even  football, do) show that in a real union (financial, fiscal, economic, political etc) the interconnections are such that one cannot look at each member separately.


Now, politically, and in view of the May 6 Prez election in France, one notes that only Slovakia, Slovenia, Cyprus and Austria have a left of center government (in Austria actually it's an PES-EPP coalition but the PES member is the one with more seats and with the PM), things in Italy and Greece can be described (if one borrows the Facebook or dating sites' lingo) as "it's complicated".

So most of the Eurozone governments are conservative (EPP member is the sole part in government or the majority partner is a coalition). Eg the Ireland, with the reverse of the Austrian grand coalition, an EPP+PES one, but with the EPP member (Fine Gael the one with the majority and its leader Enda Kenny as PM) . In the NL, the coalition that just fell (elections September 12) was led by an EPP mmeber with an ELDR/ALDE member as minority and the support of PVV.

That is partly why a win by Francois Hollande and thus the Socialist Party will be crucial in changing the Eurozone (as well as EU) dynamics. It will mean that 65 million of 331 in the Euro17 will have a left of center political leadership. That is also 65 of 253 in the EZ big 4 and 65 of 147 in the German-French "relationship" (meta-Merkozy).

1) Left of center governed Euro17 members:
Belgium 10.9
Austria 8.4
Slovakia 5.4 (as of March 2012)
Slovenia 2.0
Cyprus 0.8
Total (May 1) >> 27.5 million (8.3% of 331)

With France 65
Total (May 7) 92.5 million (28%)

2) It's complicated:
Italy 46
Greece 11.3 (and will probably remain complicated after May 6 election, because eg New Democracy is EPP member but its views on austerity etc are not typical EPP).
Total: 57.3 million (17.3%)

3) Right of Center
Germany and 8 other members with 331 - 93.5 - 57.3 =  180.2 million of 331 (54.4%)

Thus if Hollande wins, the right-of-center bloc in the Euro17 will decline from 245( (74%) to 180 million (54%) and the left of center will climb from a measly 8.3% to 28%! Plus acquire an impetus, which may also activate the German social democrats (polling at 24%, while the Greens 12%, CDU/CSU 36%, and Pirates 13%).