The EU will not be a democracy until ..

The EU (or Eurozone or Europlus) will not be a democracy until there is a federal income tax (US style).

Until then the richest people (via their national governments - "paymasters") demand a bigger or almost total say in EU affairs. That would not fly in a real "European Union". It does not fly at national level of course (although some try it at that level too).

The potential for an alternative to the Merkozy way (Part 2: Competitiveness)

This is a follow up to my post "The potential for an alternative to the Merkozy way (Part1)" of March 10, 2012.

The so called "Fiscal Pact" or "Fiscal Compact", that Merkozy conceived and 25 of 27 states signed in early March is too rigid in scope, in philosophy and in targets to be of benefit to the participating states (we shall see how many will actually get the OK from their national parliaments or their citizens, eg Ireland).

It introduces fiscal only interventions to the sovereignty of the members that not only justify a national referendum in Ireland but a 2/3 majority in the two houses of the German parliament (the Bundestag and the Bundesrat) too, etc.

Theoretically, the Europe 2020 strategy that was decided in 2010. But that IMO is not nearly enough.

According to the Europe 2020 webpages of the European Commission, "the 5 targets for the EU in 2020 are:
1. Employment
75% of the 20-64 year-olds to be employed
2. R&D/ innovation
3% of the EU's GDP (public and private combined) to be invested in R&D/innovation
3. Climate change / energy
greenhouse gas emissions 20% (or even 30%, if the conditions are right) lower than 1990
20% of energy from renewables
20% increase in energy efficiency
4. Education
Reducing school drop-out rates below 10%
at least 40% of 30-34–year-olds completing third level education
5. Poverty / social exclusion
at least 20 million fewer people in or at risk of poverty and social exclusion"

It seems to me that this "strategy" is more of a plan that a strategy. Plus IMO it relies too much on R&D as a source of EU competitiveness. Plus it does not allow for specialised strategies and competitiveness models for each state or regions thereof.


What is needed is the establishment of a Competitiveness Agency for the Europlus ie the participating members.

This agency must be the sum of 25 think tanks of the member states and daily monitor and analyse the competitiveness strategy of each member states and regions within the states and seek to coordinate those into an overall "conglomerate" strategy.  It should operate mainly in an inter-governmental way but with cooperation and support from the Services of the European Commission, committees of the European Parliament and councils of the EU. With a very lean infrastructure and secretariat. Also consult with the national parliaments of the participating states.

It should include technocrats who will be personal appointees of the member governments as well as the key national social partners.

The Competitiveness Agency should have the right to express opinions on any action or policy of EU institutions and bodies that affect the competitiveness of not only the Europlus as a whole but the EU and most importantly the participating states!

Eg it should be able to criticise the ECB if its interest rates lead to Euro exchange rates that hurt the competitiveness of the Eurozone/Europlus or some of its members or regions!

Issue opinions on the impact on the competitiveness of eg Greece or Portugal from TENs, evaluate the so called structural funds with respect to their impact on the competitiveness of the recipient economies or regions, even have the right to suggest EU policy vis-a-vis its WTO membership, FTAs, or even argue for EU  exit from the WTO if that is seen as the only way of improving the competitiveness of enough members of the Eurozone/Europlus! Propose EU laws the removal of which would improve competitiveness!

A Eurozone/Europlus "MITI" (as in Japan)? Not quite, simply a body that cares for the competitiveness of the Eurozone/Europlus AND its constituent member states and regions thereof.

The key concept is that the competitiveness of the Eurozone/Europlus is not a one-fits-all policy, but a spectrum of policies that as a whole have to accommodate the competitiveness needs of each state and even region.

To be continued.

What is behind the Hollywood sign and the Merkozy plan?

20 months ago Angela Merkel visited Hollywood and the area behind the famous Hollywood sign.

Read the reportage by Der Spiegel (in English, 15/4/10), especially the exchange between her and Simon Baker, the Aussie star of the US TV series The Mentalist,  and also consider the Merkozy plan 20 months later.

Do you see any correlation, positive or negative correlation, between what Merkel realised behind the Hollywoos sign that day and the Merkozy plan?

The right places for uniformity and diversity: The EU case

For a system like eg the EU to function it needs uniform laws, diversity in rules, uniform language, pluralism in ideas. Not the reverse!

For now, the EU27 has non-uniformity in laws, uniformity in rules (eg Merkozy), linguistic Babel and non-pluralism in ideas! How can it function as a system?

Can Europlus become Germany times 5 in the global economic arena?

On the post Dec 8 Europlius:

1) A much more spendthrift Europlus would mean less consumer spending too, ie a much stronger exports orientation for the Europlus

2) In other words, turning the Europlus into a lean and mean global exports "machine".

3) That could mean a much more aggressive trade policy for the Europlus with its trade partners (USA China, other BRICs etc).

4) Including less tolerance for hidden and other protectionist barriers by others esp in the G20.

5) So the US admin which already "accuses" Germany of exporting too much & consuming (& thus importing) too little, is probably having a fit!

Emerging EUropean dynamics

After last Thursday's European Council meeting, I have been asked by friends on Twitter and in real life, what my views or conclusions are. My reply is that I am waiting for the dust to settle first, before I draw any conclusions.

But in any case, I am brushing up my French and planning to study more German. Propose the same. These two languages emerge as lingua francas in Eurozone & probably political union.

Now what I can see, in general, is (these are my points in a discussion with a fellow tweeter):

Plus I can see continental European cities, especially central EUropean ones emerging as clusters replacing may of the clusters currently based in London. Over time of course.

The UK and London have been self-marginalising for decades now, esp after 2008 and 2010. And with Labour now trying to make up its mind whther it is pro or anti-immigration, the situation is getting bleaker. Which is a great pity for any original Anglophile and Philo-European. Alas, UK is starting to remind of UK in "Children of Men" film. I can see a "fortress UK" emerging.

These are not predictions, only dynamics that I see.

I also see potentially a new role for NL (The Netherlands)( provided that it shakes off the xenophobic dynamics of recent years. Was a very open and melting pot country until early 00s and can become again. Could evolve into (almost) an English speaking country – hub in continental Europe. With great strategic benefits.

Also see opportunities for Austria, Hungary & Czech R. if they accept EU-melting pot clusters role. Until they do, they are missing good opportunities.

One should see the Eurozone or the Europlus as a corporate conglomerate and devise a competitiveness strategy for each member but also as a whole. It is possible to devise such a comprehensive strategy that is not one size fits all. Corporate conglomerates do.

Will also be interesting to see more French & German multinationals evolving into Euro-multinationals.

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 & 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"?