European myths and real fears: Time to face the truth

Applying logic consistently can lead to some very hardcore argumentation in European Affairs. Especially when coupled with humanism.

Here we go (based on thoughts originally posted via my Twitter account, today):

Xenophobia and "paymasterism" are evidence of insecurity due to policy failures by mostly national policy-makers.

E.g. Angela Merkel and Co. blamed Greeks and other South Europeans to cover up for her own policy failures in 2005-2012. Except for very recently.

Plus,  the EU has always been used by national politicians as a scapegoat for their failures but not their successes.

So who should be in more fear of losing their jobs and who should lose them? People or policy makers. Desperate policy makers produce even more desperate policies. Not to mention desperate (for ratings hence ad revenue) media.

So, for voters, focusing at national and local level is in a way a natural reaction, whereas the wise reaction is to focus at Euro, EU level and beyond.

Instead of helping the man/woman in streets feel a tad of stability via their policies, policy makers have been doing the opposite.

Note also that 2 months of somewhat positive propaganda by Merkel and friends re Greece seems (see polls in Germany) to have managed to partly counter 2+ years of negative propaganda. Is that scary or good? Or both?

That is the real state of the EU in 2012. It is time we start discussing those things, not only the agenda the mainstream traditional media and social media set.

Example:

People in NW and North Europe are panicking and blaming foreigners because, imho, they know their national exceptionalisms are a hot air result of propaganda - narratives. They are in real fear. Because they feel/know that their economies are way more un-competitive and cruel than anyone would admit. They are scared of losing their accumulated privileges and fear more than South Europeans, because they know their societies are more cruel than in South Europe.

Yes what I am proposing, after roaming around the UK, Belgium and the Netherlands (NL) in the past 5 weeks and lots of talking with people from all walks of life, observing systemics and dynamics and lots of thinking, is that the real reason Dutch, Finns, Germans, Belgians, Brits are reacting the way they are is: they are scared. Even more scared than South Europeans.

Take a good look for example at the "streets" of any UK, NL or Belgian city. People are "bowling alone" (much more than Greeks or Spaniard are "bowling alone") and they know it.

That is I propose the main way to interpret eg the local results in Antwerp.

So whereas Greece, Spain, Portugal, Italy need real policies badly, the NL, Belgium, the UK, Germany, Finland need real policies even more badly. And more humanism (and that is a matter/task for society and thought/opinion leaders, not policy makers per se).

On the other hand, imo what Greeks and Spaniards should really worry about is not labour market reforms but of having lost part of their traditional humanism. Because once that is lost, no laws or rules can after all restore that. And liberalism needs humanism in order to work. Every system does, but liberalism (in the European not US sense of the term) does even more (that is of course why Romney and Ryan should not win the elections in the US, the country where the term "bowling alone" was invented).

The Greek and Spanish labour markets are already a "Kaiadas" (see Ancient Sparta) even without labour market reforms, so what worse can reforms do than admit that reality?

Plus Greeks, Spaniards, Portuguese, Italians should look at their national and local "champions" and elites and ask them: What have you done for me lately? In a way they are. In a way.

Being pro-EU doesn't mean being pro European Commission, pro EU Council, etc. It means being pro the common interests of 500,000,000. Because in the world systemics and dynamics of the epoch, mainly at continental and world level can effective solutions be formulated and implemented. But with a systems analysis approach that looks at the forest and at the trees at the same time. These are indeed testing times for policy makers.

The European media and social media should not focus on the symptoms (they do make for good copy, true) but at the diseases. I know it's hard.

Even more analysis on this complex topic and implications for policy makers, the civil society and economic operators at EU, Euro, national and local levels, is available upon request.

More on separatist dynamics in Europe - a case inside Barcelona!

To some extent it's natural that paymasters at national (eg Flanders in Belgium) and local (eg Sarrià, part of Barcelona) level are sort of echoing the EU/Euro rationales of GER, NL and FIN. The EU's and Eurozone's bailouts' "paymasters" have opened Pandora's Box!

Example: Read from 20minutos.es the news story  'Sarrià is not Barcelona': la misiva de vecinos del barrio rico de la Ciudad Condal.  By analogy, in this case, Barcelona is rhe EU/Eurozone and Sarrià, part of Barcelona, is     Germany or maybe NL or Finland!

This post is a follow-up to my post Is more Europe the answer to separatist dynamics in Flanders, Catalonia, Scotland?

More analysis of this topic is available to clients and close friends.

On the Dutch elections result

I don't consider the NL election results of September 12 a victory for "Europe". No outcome in these elections would, alas, have been imo a victory for Europe.

Good houskeeping, the European social democratic way

Good "housekeeping" in the EU member states is always a must but Sarkozy, the current Dutch government, Merkel and others must be sacked for obsessing about it!

For setting targets that are too unrealistic, in terms of the actual numbers as well as the whole philosophy of setting strict targets and obsessing about reaching them. That is also a problem with inflation (the 2% "magic" target), even the targets of the Europe 2020 "growth Strategy". Economics, including fiscal and budgetary ones, are not like Physics or Chemistry, they are part of social sciences and as such they must be treated with a grain of salt. People are not robots, neither are their economic, social, political and policy  actions.

Some politicians are willing to bend to the demands of financial markets.

Since many years ago I have written about the demands placed on listed companies by the financial market. The pressure to meet specific targets on a quarterly basis. And the negative impact that this has on the medium term performance of the corporation.

In recent years, the same pressure is being put on countries, their economies.

Time for that to stop! That should be one of the philosophies of the social democrats in the EU27.

Of course states, as companies do, need to improve their accounting procedures, know what they are spending and why (the why part is management accounting as opposed to financial accounting). To keep their finances solid but without "human sacrifices" of the obsession austerity kind. The preservation of the European Social Model and the need for the recognition of the positive role economic immigrants can play in the funding of the social model of an ageing EU27 (instead of scapegoating them).

To make a humanist EU the beacon for others in the world, since the American beacon has been dying out in recent decades (see also the resistance to not only HillaryCare of the Bill Clinton 1st term but also of Obamacare, especially the public option).

In a secular Europe, economic religions such as growth via austerity, classic, neo ir ordo liberalism and of course neo-Marxism have no place! Policy must provide solutions for real problems of real people.

Liberal democracy in the UK and the Netherlands - LibDems and VDD - D66

In the Netherlands, the VVD part is a member of a very "conservative" government coalition between CDA-VVD with the support of the PVV. Some argue its the most conservative government in the Netherlands in 60 years.

The UK's Liberal Democrats are also in a coalition government in the UK (albeit without UKIP or BNP support).

In the Netherlands though there is another liberal democrat party, D66. Both VVD and D66 are members of ELDR and ALDE. So are the Liberal Democrats.


Which brings me to following thoughts:

The future of the UK's Liberal Democrats? The Dutch analogy-case.

There are 2 parties in the Netherlands that are members of the ELDR and ALDE: VVD and D66

The D66 (in its former name, Liberal Democratic Centre) spun off from the VVD, in 1962, formally in 1966 (hence the 66 in the D66).

The VVD was founded in 1948 and were joined by the Comité-Oud, a group of liberal members of the Labour Party (PvdA), led by Pieter Oud.

So the formation of the VVD resembles that of the UK Liberal Democrats by a merger of the Liberals and the SDP (which had spun off from Labour a few years earlier)!

In view of the cgov oalition of the LibDems with the Tories which was against what the grassroots of the partu wanted, maybe a split as in NL (in 1962/1966) is in the cards (of fate) for the LibDems too. Maybe. Maybe not. Only food for thought (call it an intellectual exercise if it makes you feel better about it).

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.

What are the high Industrial Producer Prices in April (EU, Eurozone) a sign of?

This is a follow up to my post of May 4: "Updated! Industrial Producer prices hikes among Eurozone members: Cause for concerns"

According to Eurostat (June 6)

April 2011 Industrial producer prices when compared with March 2011 are up by 0.9% in Eurozone and up by 1.0% in EU27.

But the worrying picture becomes more clear when one looks at the April 2011 figures compared with 1 year ago, ie April 2010:

In April 2011 compared with April 2010, industrial producer prices gained 6.7% in Eurozone and 7.8% in the EU!

Eurozone (April 2011 compared with April 2010):
Total industry excluding construction +6.7%
Total industry excluding construction and energy +4.4%
Intermediate goods +7.3%
Energy +13.3% (yes 13.3%!!!!)
Capital goods +1.3%
Durable consumer goods +2.0%
Non-durable consumer goods +3.4%


Industrial producer (or wholesale) prices are a sign of upcoming inflation (consume price index) trends (a few months later).

Let's look at the figures for some EU member states (April 2011 compared with April 2010):

No 1 (highest in the EU): UK +13.1% in April, vs +8.1% in December 2010 (compared with Dec 2009) and only +5.1% in November 2010 (compared with November 2009).

No 2 (and No 1 in the Eurozone): NL +11.7
No 3: Bulgaria +10.7%
No 4 (and No 2 in the Eurozone): Belgium +10.6%
No 5: Lithuania +10.5%
No 6: Denmark +9.9%
No 7: Poland and Latvia with 9.4%
No 9: Romania +8.8%
No 10 (and No 3 in the Eurozone): Finland +8.5%

Germany's and France's are both +6.4%! How about that!

See full Eurostat figures by country

Note that the Eurozone17 average in 110 basis points below the EU27 average!

Whereas international energy (oil) prices and the prices of some staple foods are said to be pushning industrial production costs up (and thus leading to higher wholesale prices) these high numbers seem to indicate that industries in the EU and the Eurozone seem to think that they can afford to pass these prices on down to the intermediaries and the final consumer (whether consumers (b2c) or other companies (b2b). Of course, some of the sales will be made inside the EU some outside.

But with the Euro being at a relatively high price vis-avis the USD, the Yuan etc, one wonders what makes those industries think they can afford not to absorb more of the extra costs of the ebergy and other inputs.

a) Are their products that unique, in the EU, EUrozone and global markets?
b) Is competition not working well in certain sectors and/or member states or the EU Single Market?
or
c) Are they merely desperate (cannot internalise more of the extra input costs, pass them on and prey)?

I have no clue as to whether it is one of the above or something else. But I am wondering.

But I cannot help wonder, more generally, whether the way to best curb inflation in the Eurozone that the ECB is gung-ho for (2% target) is via "tightening" (ie raising interest rates) or by removing barriers to more competition intra-EZ or intra-EU or both! Any views?

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.