For global and EU systemics to work they need more than trade flows. Or less

Here are some systemics and dynamics thoughts (written and tweeted Nov 24, 2012):

What libertarians seem to forget imo is that any group of more than 1 person constitutes a "society" or polis etc. Laws are part of explicit and informal "social contract" between members of a society/group/polis (politics comes from polis). The economy is also a dimension of a social contract when families stopped self producing everything and started trading w/ each other. Intra-polis trade between families created need for prices (even in barter trade) and thus money. But in basic intra-polis/village trade no one was really left "jobless", was mostly specialization benefits.

I am sure economic theories/models (be they of 5000 BCE or 2012 CE) worked much better in 5000 BCE! In a way, extra-polis trade (see eg explorers to "new worlds") disrupted the social/econ contracts/balances of de facto closed societies. Not to mention that lack of competition rules probably had created warlords and other oligarchs inside closed systems/cities/villages.

Why do I say probably? Cos I was not there to see for myself, at 5000 or something BCE. Were you?

Opening up and allowing trade between families in a polis came as part of social and legal contracts/laws/balance. But but inter-polis (ie inter-national) trade/exchanges were not coupled by common laws and a social/econ contract! Were they? No WTO etc.

That is still in 2012 the underpinning element of trade and other inter-state exchanges of all kinds: They fall outside national scopes. Of course so many are in favor of free trade without unification, it sort of allows them to have the cake and eat it too!! Think about it!

Trade between entities not bound together the way a country is bound together is sort of having a cake and eating it too! Sort of "dumping".

That is also part why most economic models/theories have failed. They deal in principle and de facto with closed systems. Look at GATT and the WTO: It regulates basically trade but fails to deal with many other dimensions thus systemically unbalanced. What I am saying is that trade, investment, migration and other flows need to happen within a "system". Is such system compatible with any sub-global/earth sovereignties? In other words is even trade compatible with national sovereignty since separate social contracts?

Can comparative advantage really exist in a league (competition) between 200+ national economies where there is no actual "league"? Does this mean that the world needs to become a federal political entity for "fair" trade to exist? Is it otherwise an "animal farm"? Can national social contracts exist at the same time as free trade exists? Much like libertarians who want to exploit imo the benefits of a society (econ is a social activity) w/o the "costs" of a society ... Or look at how some in the UK want to free-ride Europe and the world w/o any associated social contracts or rules! Pick and choose only!

Thus no wonder that many of the arguments used against the EU are actually prompting localism/separatism in many EU member states!To use absiloute logic, either sovereign states need to become like eg Cuba or North Korea or join together in a federal entity!!

But in any case, imo trade was, back when it started in human history, the first opener for more open systems. But that was thousands of years ago. Not in 2012! The systemics to work need more than trade flows. Or less.

The idea that one can be a sovereign state (city, national, etc) and still engage even in trade with others is imo challenged in this era!  It worked in 1200 BCE or 1400 CE or even 1949 (GATT era) etc but not in the systemics and dynamics of 2000s!

Thus it should come as no real surprise that European and US and world systemics and dynamics are out of control in the 2000s and 2012 and that globalization, regionalization (EU, UNASUR, ASEAN), nationalization (UK), localisation/separatist dynamics do co-exist in 2012!  Because systemically speaking the system is out of whack! Freedom of trade and investment cannot work systemically for long w/o full system integration.


Note: Available for research and analysis for think tanks, NGOs, civil society orgs, firms, policy makers, media, academia anywhere in world.

Those who live by exports ....

Funny how heavily export dependent economies, emerging (China et al) and mature (eg GER) are being hit by the recession in their export markets

Debunks the myth of export exceptionalism. And points out the value of consumption rich economies (USA and many in the Eurozone).

In other words, where are the US, Spain, Greece, France, UK, Italy consumers when you need them, Germany, China et al? Austerised.

Let's face it, it's the US and many Eurozone consumers that make/made the world economy/trade go round!

The key to a well working capitalism

The key to a well working capitalism lies in the balanced mobility of financial vs human capital.

Since in the last few decades at world (GATT then TO) and regional (EEC/EU, Mercosur/UNASUR,  NAFTA, etc) freedom/mobility of not only capital but goods as well has increased strongly, while legal ("economic") migration has actually decreased, no wonder for Capitalism's imbalance and thus crisis.

What some people don't seem to get re the hard Euro

In the years of the hard Euro, ie when the Euro was (until relatively recently) quite high compared to the USD, the Yuan and other currencies of major trade partners (and tourist origins eg USA),  that  suffocated much of EZ business because it not only had a hard time exporting to non-Euro markets but also faced (when eg Euro was 1.4 or 1.5 USD) more fierce competition inside the Eurozone and even their own "national" markets.

So while interest rates for Eurozome member states were lower than past thus allowing them to borrow more (via sovereign bonds) than the pre-Euro years, they were still high enough (in order to stick to the 2% inflation target of the then ECB directorate) compared to US, UK and other central bank interest rates, for the Euro to be expensive Euro vis-a-vis USA, China, etc.

So while the budgets of Euro member states benefited from cheaper money, and maybe companies too, the price competitiveness of many Eurozone businesses (including tourist ones) took a severe, IMO, beating.

Kiss intra-EU trade goodbye?

There are so many scenarios floating around re the future of the Eurozone and the EU.

One thought of mine:

If the EU does indeed dis-integrate, then exporter economies, members of the EU (eg Germany and the Netherlands) can most probably kiss intra-European trade goodbye!

Yes, they can still rely on WTO based trade for intra-European trade! Right. See what is happening with the pro-free trade G20!  Pro free trade rhetoric, protectionist measures and barriers.

Want EU and Eurozone growth? Then ...

Markit data for Germany, France and Italy for April shiowed in all 4 surveyed post lower sales, with record decline in France. UK is recession again, based on GDP on Q4 of 2011 and Q1 of 2012. The situation in Greece, Spain, Portugal is also well known.

And while there seems to be a a shift in the dynamics of austerity (see my April 19 post), in my opinion, what the EU and the Eurozone need, for growth, is a neither Merkelian austerity nor good old Keynesian spending, but a combination of:

a) Curbing of over-legislation at national and EU levels (polynomia) and the resulting red tape that suffocates EU and Eurozone firms, especially the SMEs (exception from curbs: some sectors including the Financial one which actually needs heavier EU legislation-regulation even w/o G20 agreement)
That does not cost a lot of money, but requires lots of work.

b) Raising the trade walls of the EU by art at least a few meters. No need to go chasing growth via exports to the other 4 continents (especially given the narrow scope of WTO rules) when the EU has 500,000,000 at home and the Eurozone 330,000,000 (more than the USA). Abandon the WTO in favour of bilateral agreements with China, ASEAN, USA, Brazil or Mercosur, India, etc (agreements that include not only trade and other econ but econ immigration as well, etc)

c) Revamping of the Fiscal Coimpact, removing fixed and sclerotic targets and increase the co-operation of EU and EZ economic policies w/o transfer of sovereignty. Based on targets that are realistic given the global and European conditions.

d) Spending for growth, but wisely and within reason, probably less than you would be required without (a) and (b).
.
Part of my above post I also posted as commentary to the 27 April 2012 "Plan B for the Eurozone – it's not what you might hope for" article in The Deep End of Conservative Home. 

On enterprise and legal certainty in the 2012 world

"Argentina's "unilateral and arbitrary" decision amounts to an attack on the exercise of the free enterprise and the principle of legal certainty" says a resolution adopted by The European Parliament on Friday.

The EP also says that the European Commission should use all appropriate dispute settlement tools available at the WTO and G20 to respond to Argentina's "unilateral and arbitrary" decision to expropriate the YPF energy company.

Whereas I am not taking sides because I am not aware of the full details of the specific issue that involve a private company (and a formerly private one), here are my POLICY related comments.

1) Does Cristina Elisabet Fernández de Kirchner's (Argentina's President) concept of national sovereignty vs David Cameron's one. Compare and contrast.

2) Not sure WTO rules cover such issues (as well as many other global economic ones). Is the EU asking the WTO to become an agency of global economic "governance" (compare and contrast issue with the issue of "economic governance in the Eurozone). What can G20 do or can do withiu its present and appropriate role? This case is maybe one more reason in favour  what I have been arguing re EU and US exit from the WTO and reliance on bilateral full topic agreements (covering trade, investment, economics, immigration, etc) between eg the EU and Argentina or EU and Mercosur or UNASUR.

3) Re the EP's claim that "Argentina's "unilateral and arbitrary" decision amounts to an attack on the exercise of the free enterprise and the principle of legal certainty. Are there not many many other factor that "attack" free enterprise and especially legal certainty inside the EU and the Eurozone? Such are polynomia (over-legislation) and red tape? Eg the absence of EU direct tax competency and laws?

4) I have commented before that the G20 membership is high on anti-protectionist rhetoric and low on reality,  with many and significant hidden protectionist practices and barriers to trade.

Thus, no matter who is "right" in this case, this case serves as yet another food for thought stimulus for the policy issues I raised above.

PS. I have argued that given the global dynamics it is maybe time for the EU to raise its walls (economic fortress), rely on bilateral agreements, not WTO (see China effect) and develop a common and humanist immigration policy for economic immigrants (after all, the EU27 population is ageing and needs external population boost, for reason including the viability of its Social Model). Bilateral economic agreements are a good place to include bilateral economic immigration agreements.

Wave goodbye to the Western Way of Life? But which Western way of Life?

The initial impetus for this analysis was today's (Friday) release of the US Department of Labor's data for March re employment (see a press report by BBC News) as well as a phrase from a statement by the US Secretary of Labor Hilda L. Solis on March employment numbers: " we need to invest in community colleges and job training programs that prepare our workers for 21st century jobs".

21st century jobs? Studies have showed that the biggest bulk of jobs creation in the US has been in low-skill - low pay jobs such as carer and related.

Plus the US medical sector (mostly private as opposed eg to Europe) has been a job creator even in the midst of the US economic crisis. Please note the continuing resistance by lobbies and others to Obamacare, even without the original public option.

Please also note my view that the No 1 target of the so called "Euro crisis" is not the Euro but the so called European Social Model which is inter alia based on public health insurance and healthcare services.

Take also 8 minutes to listen to my theory on the fundamental causes of the US subprime crisis.

You may also want to read my February 3 post "If GDP per capita in USA, EU, China, India was to converge then ..."

Ms Solis argued inter alia: "We've added nearly half a million manufacturing jobs since February 2010. This week, major U.S. carmakers announced that their U.S. sales rose last month to the highest level in at least four years.... the industry has seen a complete turnaround, adding more than 230,000 jobs since the summer of 2009".

Yet for decades now, manufacturing jobs have been moving East. before China entered the WTO on December 2001, Japan was the main target of complaints by US lawmakers. Since China, a 1.3 billion entity still in communist political mode but with a capitalist model of economy in operation in recent years, has entered the "WTO trade game", the impact on the US and the EU (especially the Eurozone with its inflation phobia that has led inevitably to a hard Euro in most of the 10 years since the intro of the Euro notes and coins on January 1, 2002) is even more remarkable!

Are environmental policies and tools, prompted by global warming, the "wooden walls" (see Ancient Greek history) that will save Western world manufacturing and related jobs?

How about the so called "Western Way of Life"? First of all, what is it? Is it the European Social Model (watch it being destroyed in Greece and other PIIGS as well as in the UK) or the US "success or bust" model (aka venturing without a safety net)?

So what if US unemployment remains above 8% (with more low skill - low pay jobs) and EU unemployment is soaring? As long as the financial - health insurance - healthcare sector is doing well in profits and in jobs ......

Note also the recent initiative of the 5 BRICS countries/economies to stand up to the current "world order". as well as India's refusal to allow its airlines to fall under the EU's  transport CO2 emissions trading scheme.

Plus, as long as listed companies are reaching financial results expected by analysts ..... Times are too financial and too jobless. Or is it because US and EU GDP per capita is starting to converge with China's via "free trade" etc? Growth without jobs (or with low pay jobs)? It's called productivity by some,isn't it? Look at what's happening with Greece's internal devaluation experiment!

And look at how the prices of things are rising in EU member Bulgaria as well as non-EU Albania (prices of food in Tirana are reported to be as high a in pre-crisis Athens) in spite of the fact that salaries in Bulgaria and in Albania have risen only a small fraction compared to the rise in the cost of living! Within the EU, people from the new member states have/are trying to partake in the western way of Life by moving. Romania's 2011 census reported a 12% drop in population compared to the previous one, leaving the country with just over 19 million inhabitants compared to 22 million only a few years ago. Trade or migration?

At the global scene, people are trying to partake in the Wsstern Way of Life either via economic migration (in spite of it being discouraged or outlawed by most destination countries) or via trade.

So as billions of people, in China, in India in other BRICS and other countries around the world (and in "New Europe") are making a rightful claim to the Western way of life, that way of life disappears. Means it was not viable to begin with, ie it was only meant to work for a % of the world, an elite?

In the "old days", eg in Ancient Sparta, the Spartans exploited an 8-fold population of the neighbouring Messinians as helots (slaves). To protect against their uprising, they (the Spartans) became soldiers for life and their state a military one. Compare that to the Athenians. But the Athenians' wall, built by Themistocles, the same Athenian who masterminded the win in the battle of Salamis, turned against them during the siege by the Spartans during the Peloponnesian War when an outbreak of the plague (be it Typhoid Fever or other, see About.com) killed 33% of the population, including Pericles.

The world as we know it via History, be it Rome, Middle ages Europe, etc, Charles Dickens' England, etc was mostly a world were elites enjoyed things the masses could not (that 99%).

It can be argue that the industrial revolution and the ensuing mass production techniques provided for a certain way of life for a much wider % than just the elites. To get a rough idea: One can calculate the 99% based on the whole world for this period, ie the Western world as the area of the planet where the elites lived (the 1%, 1% of 7 billion is 70 million, the combined population of the US, Canada and the EU is around 800 million, thus the world's 1% elite is 9% of USA+Canada+EU! Rough calculations, but indicative of the West - rest of the world divide.

In any case. it was in the early 1990s in Brussels that one day my secretary noted that she was seeing beggars in the streets and that was a new thing, in her eyes. I replied that people in need were always present, but in distant parts of the world. Now the "segregation" was diminishing. It seems to me, 20 years later, that I was right. More and more rich people are not in the "West" and more and more poor people are in the "West" compared to the industrial age. A new phase has been on, for some time now.

But does one more poor person in the West make for one less poor person in eg Asia, via trade? Not necessarily, because that value foregone by an average Belgian may not be pricked up by an average Chinaman but by a Western company producing in China (some 50% of China's exports are still not made by Chinese firms in China but by "Western" companies).

Yet, instead of the West's states and welfare systems helping Americans and Europeans adjust to the earthshaking relocation of value (not people) from the West to other parts of the planet, a Euro crisis is used as an excuse for cutting down that European Social Model and passing many fillet parts of it to the private sector. Instead of America getting a public option, Europe is losing its own "public option". That was the main game changer of the last 2-3 years.

No wonder many Europeans, especially, and for now, South European ones, are experiencing a sense of vertigo. The economic poles are shifting. It is 2012.

Food for thought:

a) Can capitalism work to make everyone better off (ie with a minimum number of "losers")?
b) Is modern finance as we are experiencing it in recent years a core element of capitalism?
c) Is China capitalist, communist or both?
d) Is the real "problem" economic immigration or trade?
e) Can "Devaluation" take place successfully in the West to allow for the growth of the rest of the world? By "devaluation" I mean a wider equivalent of the "Greek experiment", ie a reduction in wages that is met by a reduction in the cost of living as well. In Greece. it does not seem to be working. Wages are falling but the prices of most goods and services is not.  Take another example. London real estate prices. Can the London economy sustain them? What will happen after mid-August?

In recent years I have talked to many persons who experienced the Soviet Union and the Iron Curtain first hand not only as children but as adults as well (eg until the age of 25 or 30+). Almost all miss the certainty that existed regarding the basics: a job, basic food on the table, a roof over their heads, access to free healthcare.

I will wrap up this post with a piece from Gary Hart's speech at the MIT auditorium in 1984 (I was there): The enemy in South America is not communism, it's poverty.

Draw your 2012 analogies!

Which does more damage to the EU economy and jobs? a) immigration or b) imports?

Here are some thought on recent events:

1) The EU can open up export markets using its 500 million market as leverage via bilateral deals not WTO. WTO is fail (see eg Doha Round).

2) David Ricardo's theories don't apply 200 yrs later. Trade has to be balanced, reciprocated in a way. Not the case eg with Germany that wants the cake and eat it too (see its views on Barroso proposals on reciprocity in world trade).
After China joined WTO, US and EU kissed manufacturing goodbye. Plus there is only a limited world market for German quality products, not much room for more players or capacity.

3) So, which does more damage to the EU economy and jobs? a) immigration or b) imports? IMO, (b)

4) Wage cost is antique economics (IMF, etc). Modern biz competes on quality and/or branding not price. Which Eurozone, EU or third country's wages do Greek or Spanish wages have to match for eg Greece and Spain to achieve competitiveness in IMF/Troika's logic?

5) Germany, USA and China have been partying in the EU market while many of the EU members are "starving". Time to raise trade walls and lower immigration walls.

The EU aviation CO2 charge: Prompting the evolution of bilateral trade & economic agreements?

On Friday, the BBC reported that "the EU has directed Indian carriers to submit the emissions details of their aircraft by 31 March. But Mr Singh told parliament that "no Indian carrier is submitting them in view of the position of the government"".

I have been arguing for years now that bilateralism in not only trade but all 4 "freedoms" (capital, goods, services and labour) may be an option given the systemics and dynamics in the world, which include:

1) The failure of the Doha WTO talks which has been leading many countries or regional blocs towards bilateral agreements which cover not only trade but other economic areas as well.

2) The willingness to bring immigration inside the WTO agenda and bilateral agreements (India comes to mind)

3) The pressures placed on the US and EU markets (especially the Euro zone of the EU) due to China's WTO membership.

The Indian government has pointed out that there is no international agreement on charges of aviation CO2 emissions. Time for bileteral deals on all matters trade, economic and beyond to lick in?

Food for thought!

Got 500,000,000! Use it!

The EU is the 3rd largest entity in population, after China (1,300,000) and India (1,200,000). USA is a distant 4rh, at 310,000,000. Brazil, another one of the so called BRICs, is 5th with 192,000.000 and Russia 8th with 143,000,000. Among other fast developing ones, all members of the WTO, are Japan 148,000,000, South Africa with 51,000,000 and South Korea with 49,000,000.

In terms of GDP, the EU ranks slightly higher than the US, at No1, with 16 trillion USD, USA 14.5 trillion. China is distant third with 5.8 trillion and Japan 4th with 5.4 trillion.

What do these above numbers mean?

That in spite of all its problems, eg the Euro crisis, the fact that Germans tend to save than consume, compared eg with the Americans, its expensive currency that is shared by 17 of its 27 members (330,000,000 population, in the Eurozone), the EU is the wrrld's most lucrative market, for the world!

The EU is the largest export market for the world's No1 exporter, China, in value, larger even than the US now! The world's number 2 exporter, Germany, exported 41% of its exports (in value) to the rest of the Eurozone in 2011 and 60% in the EU! Only 40% outside the EU!

What do the above mean?

That the EU could take better care of its Internal (aka Single) Market for the benefit not only of its consumers and China, US, South Korean, Canadian, Indian, Brazilian, South African et al exports which are imported in the EU!

The PIIGS, the French, the Brtish, the Austrians, the Dutch, the Belgians, all 27 EU and 17 Eurozone contribute to making the EU market so important for the US, Chinese, German, Dutch, and other exporters.

What do they get in return? By allowing more or less every economy in the world to export to the EU more or less everything, the EU has undermined its own Internal-Single market, in return for some exports to these countries but at the cost of its less competitive, for various reasons, parts.

Should the EU raise its trade barriers a bit or the Eurozone lower the Euro some so as to give products and services from its less competitive regions a better chance inside the EU market?

Maybe. But at least, it should acknowledge the cost the EU's and Eurozone's less competitive regions pay as a result of the EU's near open door policy to the world's products and services!

A free trade area is not the same thing as a Single Market, so ...

A free trade area is not the same thing as a Single (or Internal) Market. Thus those who cannot understand or do not wish to understand the difference should have remained in the EFTA or the rely only on the WTO (or the Commonwealth).

Free what? The myth of (WTO) "free trade"

WTO trade is free-er world trade compare to some decades ago. Not free. Tariffs are allowed especially by developing countries and the BRICs plus most countries of the WTO have hidden/tricky barriers to trade (imports). Especially the pro free trade rhetoric G20!

Which is the biggest market for Chinese goods (and services)? USA or EU?

I was watching a US TV anchor claim that the US is the No 1 market for Chinese products (as part of an argumentation he was making that "China needs the US", he even went on to suggest that it is the US that is doing China a favor by allowing it to "park" 1.2 trillion of its 3.2 trillion Foreign currency reserves in US T-bills!!!)

Is it, I wondered!

According to the European Commission's Trade pages, EU goods imports from China 2010: €281.9 billion (+31% on 2009). Add to that: EU services imports from China 2009: €13 billion.

According to the US Census Bureau, US good imports from China in 2010 were: USD 364.944 billion. As per imports of Services, according to the Office of the US Trade Representative U.S. imports of private commercial services* (i.e., excluding military and government) were $8.2 billion in 2009 (latest data available).


So 294.9 (EU) vs 373.1 (US)! The guy was right.

But wait! The EU imports are denominated in Euros. The US in USD!

Let's see what happens when we apply different USD/Euro rates to these 2 numbers:

1 Euro = 1.2 USD > The EU imports rise to 353.9 USD (20 billion less than the US ones)
1 Euro = 1.3 USD > The EU imports rise to 383.4 USD (8 billion less than the US ones)
1 Euro = 1.4 USD > The EU imports rise to 412.9 USD (30 billion more than the US ones)

The parity rate (at which the US and EU imports from China are of the same value, in 2010), 1.2652 USD per Euro!

Should we not make those calculations based on Yuan? Well, it depends. Among other things, on what happens to the revenue from exports. Does it get converted to Yuan and used in the Chinese economy or is it kept in the currency the contract was made and invested? Plus, are contracts for Chinese exports to the EU, are they usually made in Euros or in USD? In Yuan? Doubt it!

So is there an answer? Is the US or the EU the biggest market for China's exports?

Let's find a stat for the average USD/Euro rate for 2010:

According to the US IRS, it was 0.755 Euros per USD ie 1/0.755 USD per Euro = 1.3245!

Using that rate then: EU imports from China were 294.9 billion Euros times 1.3245 = 390.60 USD which is 17 billion more than the US imports from China., USD 373.1 billion (2010 stats, 2009 for US Services imports).

Thus the EU is a bigger market (2010) for China's exports (goods and services) than the US. And of course the biggest in the world.

But then again, the EU is not a country or a single economy (at least not yet). So, I now have an EU headache.

PS. So, EU, make up your mind. Are you a free trade area or a country?

To be continued (maybe; but surely at your local market)

PS2. Of course, only EU imports to the Eurozone were directly, at best in Euros. For the 10 other non-Eurozone members, they were probably denominated (the contracts thus the payments to China) in Pounds, Swedish Kronas, etc. But the European Commission lists them all in Euros. Thankfully, imagine if I had to convert 10 import data into Euros!)

Which interests will prevail in EU trade policy?

A key strategic question is whether Germany still relies on Euro & EU markets for its exports or can rely on China et al.


Different exporters in Germany and the rest of the Eurozone17 have different geo-strategic trade interests: Some prefer the Eurozone, some the opportunities in China et al, etc!


For a large % of Eurozone export & other firms, a EU exit from the WTO would be a blessing (inter alia, it would curb Chinese exports to the EU and its Eurozone that compete with many made in Eurozone products) . For many, a curse. 


Of course, in that scenario, EU trade would be conducted on the basis of existing or new bilateral agreements of the EU with countries (China, USA, India) or groups (eg Mercosur, ASEAN etc)


Which interests will prevail in EU trade as well as other policies (eg the implicit exchange rate policy of the Euro)?

An alter way of making PIIGS & others more competitive

Want to reduce the prices of PIIGS and other economies exports & tourism to make them more competitive?

Why not help them avoid the cut of the middlemen in the European and world markets?

Is it a plane, a UFO or the EU (finally) moving forward?

Is it a plane? Is it a UFO? Is it a mirage? No, it is the EU (finally) moving forward, albeit in a clumsy (and confusing) fashion!

In effect, part of what is happening at the moment in the EU is a move to break away from the UK's "union-blocking"! In the midst of quite complicated systemics and dynamics that do contribute to the difficulty and confusion, but also make ever closer ie deeper union in Europe even more of a must.

More specifically, as I tweeted last Friday, there is an urgent need for a sovereign EU in:

a) energy

b) defense

c) economics (internal market)

d) foods, especially staple ones

etc

yet open to the world (eg with a more "open" policy re immigration, be it of asylum seekers or the so called "economic immigrants")

Part of the world systemics and dynamics are:

1) In recent years the US has left a gap that can best be filled by the EU rather than China, provided the EU evolves into a US of E or a Fed Rep of Europe.

Eg the US was a beacon and a magnet for all people who were suffocating in their natives parts of the planet and who wanted to strive for a better future in an environment where it mattered more where you wanted to go and become and less your background or class or birth rights. IMO after the closing of Ellis Island, that US started to wane. And has become immigrant hostile in recent years. Many more examples of the gap, but not to be discussed in this analysis.

So, a fully united, independent and sovereign EU would be a positive factor in world affairs instead of the current situation (see rise of xenophobia, nationalism, grand standing by France, Germany or the UK, a stance that the American diplomat whose cable was leaked eloquently described (referring to the UK, France and Germany) as Europe's dwarves (see "Manipulating the Political Dwarves of Europe" by Gregor Peter Schmitz in Spiegel International 12/10/2010)

etc)

2) China's 2001 WTO entry and its policies have caused major systemic quakes in US & EU, as I tweeted on Saturday.

They have even been a factor in the Euro's probs, IMO.

2 of the interesting articles/analysis that have appeared in recent days are:

"Nine EU countries set out post-crisis growth plan" reported on Friday, March 18, Andrew Rettman in the EUOberver.

"Prepare for a Euro Zone Divided in Two" is the title of an interesting opinion article by Irwin Stelzer, director of economic policy studies at the Hudson Institute in Washington, in the WSJ (March 21).

They both merit reading as valuable food for thought.

Regarding the topic in Irwin Stelzer's analysis, IMO of the 10 non-Eurozone EU members, 3 of the old EU15, the UK. Denmark and Sweden have willingly chosen to be marginalised by staying out of the Euro. The other 7 are still relatively new EU members (5 since 2004 and 2 since 2007) thus have more "excuses" for not having joined the Euro yet (of course at least 1, the Czech Rep., especially under its current President, seems unlikely to want to join, for ideological (libertarian?) reasons).

But the rapid EU enlargement from 15 to 25 then 27 was not meant to be at the expense of deepening, although it did, but the delay has been long enough that a dynamic even somewhat "clumsy" move forward, had become overdue. Not that the delay was a fault of the new members that after all were "owed" EU membership for the suffering they endured by communism (and for what happened back in Yalta and Potsdam). It gave others the excuse to slow the EU's deepening down. But no more, especially after Cameron's UK Sovereignty Bill. As the governor of the Bank of England reportedly told the Americans (according to the famous leaks), the Euro crisis was bound to accelerate the move towards federal Europe. After all, IMO as well as others', the current Euro crisis is caused by the fact that Monetary Union was not preceded or at least accompanied by not only Economic but Political (federal) union as well (as I said, causality in our times is very complex and not open to simple analyses, so bear with me)

So if Sweden and Denmark find themselves left out of key meetings of EU interest as The Economist notes, according to Irwin Stelzer (in effect the Eurogroup meetings that take place 1 day before each ECOFIN Council of Ministers of Finance and the recent first ever Eurozone Summit), they should recall that the Euro was not decided in 1991/92 (Maastricht) as an optional (buffet) feature of the EU, but as the vehicle for a) making the EU common then single market (by 1/1/1993) more effective and b) moving the EU forward!

And I agree with the view expressed by many that non-Euro membership of an EU country/economy, gives that economy an unfair trade advantage inside the Single Market of the EU. Of course, with life on Earth systemics nowadays being complex and in any case not uni-variable, the insistence of Eurozone monetary policy to focus on inflation only (with the dogmatic 2% target) that has led to many periods of expensive Euro vis-a-vis not only the Yuan and the USD but also the Pound etc, has also contributed to the current Euro crisis (and other factors as well).

But given the systemics and the dynamics not only inside the EU and the Eurozone, but the world (Earth) as a whole, what is happening now is probably the most feasible (but maybe not the best) way for Europe to move forward!

As for the 4 proposals of growth after the crisis put forward by 9 EU member states, allegedly with Cameron's leadership, they seem to make worthwhile reading.

They are the proposals of 9 governments of EU member states, not the 9 states. 3 are Eurozone members (NL, Finland, Estonia). The 9 are basically most of the members of the forum UK-Nordics-Baltics Cameron organised a few weeks ago plus the NL. I should also note that at Davos this year there was an attempt to present and market a Nordic Capitalism model as a model for others, in Europe and the world, to "follow"/copy/be inspired by.

So while the 4 points of the 9 sound in principle good, IMO the Tories must realise that

a) regulation driven burden to SMEs comes from national & local regulations too, not just EU ones! And one could argue that national and local ones are more of a burden than the EU ones (ie the regulations and the directives transposed into national laws).

b) that SMEs need EU-wide uniform regulations, rules, etc, which affects the Sovereignty Tories say that they care so much for!

c) Doha completion within 2011 IMO highly unlikely. Inter alia, Obama has no "fast track".

Now, some relatively harsh reminders for the mostly conservative or liberal governments of the other 8 that submitted the 4 points:

As I tweeted on Friday, the pro open-market govs of Denmark, Estonia, Latvia, Lithuania, Finland, Poland, the NL, Sweden (& the UK) must realise that "open market" means not only mobility of capital, goods - and services as they recommend (agreed) - but also workers/labor and humans in general. Because labor needs as much mobility as possible in order to "compete" in relative value to the other factor of production, Capital! Oh yes!

Those nations that wish to conserve their "national" (altho the UK is a mini-EU) "sovereignty" are to miss out on the benefits of EUropean sovereignty

Angela Merkel decided to abstain (along with Russia and China in the Security Council of the UN) from the UN vote on Libya. The issue is out of my areas of experience and activity so I will not comment. After all, from what I read the SPD and the Greens did not take a clear stand on the same matter either. The issue I feel competent (as an MBA and as a public policy analyst) to comment on is whether it is indeed electoral concerns in state (laender) elections (one more took place this weekend and 2 crucial ones next weekend) that affect to a large extent the German government's demands on the other 16 of the Euro (and especially the GIIPS (I refuse to use the PIIGS acronym)) in the "Competitiveness Pact". We know of the hardcore austerity hawkish POV of the FDP. But as far as I know, the SPD is not exactly austerity hawkish. So how would a less hawkish stance by Angela Merkel in the Pact cause her to lose votes to the SPD?

Ah, c'est l'Europe!

Single what? For whom?

1) Speaking today is Paris, the French EU Commissioner who is in charge of 2 key portfolios, Internal Market and Financial Services, M. Michel Barnier said inter alia that he does not want protectionism but economic realism.

EU economic realism should IMO mean a request and achievement of reciprocity in 4 freedoms by others in the world arena, from USA and China, to India, Russia and anyone who wants to have relations with the EU, economic or other.

Should the EU threaten to leave the WTO & rely on bilateral reciprocity? IMO, that is not an out of question scenario/option, in these zany times. systemics and dynamics.

Let me add that M. Barnier also said that the Americans are always surprised that the EU does not demand commercial reciprocity.

On the other hand , on the always hot issue of migrants and human rights, it is my opinion that migration should be free among WTO members! Future historians will refer to our era as "New Middle Ages", because most of the sum of policies in EU, US and world re asylum seekers & economic migrants constitute "apartheid"!

As per financial regulation and reform in the EU, M. Barnier said in his same speech that it is on a good path (une bonne voie)? I am curious whether the Commissioner has watched the "Inside Job" Oscar winner documentary of Fin/Wall St!

The size of the EU's population (500,000,000) and single market should indeed be exploited IMO:

a) For the EU to implement not simply reform but an overhaul based on a total rethink of the financial industry.

b) Promote free migration (in all directions) within the WTO membership.

(an interesting point made by M. Barnier: Monnet et Schuman ont eu une idée incroyable: cimenter l'envie d'être ensemble par l'intérêt d'être ensemble)

2) The EU 27 (& its single market) have 21+ languages. What is max no of languages a person can speak? What % access these can offer him/her to the "EU single market"?

How many English speaking jobs are available in EU minus UK & IRL?

How many French speak one outside FR, Wal, Lux? German?

Maybe being a EUropean is impossible after all, b/c no human can speak 21+ languages! Knowledge of other European languages (and which & how many) is the wider strategic EU question!

Examples:

Does speaking EN, FR & GER but not the national languages get an EUropean a job in 20.5 of the 27 EU member states?

Does speaking EN, FR, GER, SP & IT (5!) but not the national language(s) get an EUropean a job in 18.5 of the 27 EU member states?

Thus can the EU ever achieve a Single Market as far as jobs are concerned? Due to many reasons, with 21+ languages being No1, by far!

3) IMO the problems in IRL & GRE are partly evidence of the failure of an alleged #EU single market, for many reasons & factors


4) By awarding an Oscar to the documentary Inside Job re Wall St. the members of the Academy IMO made a clear statement!

Various Thoughts on EU, US and other affairs, June 1-5

Various Thoughts on EU, US and other affairs, June 1-5 (based on my tweets, (@npthinking):

Eurostat: 1st estimates for Q1 2010 GDP: Eurozone and EU +0.2% from Q4 2009, +0.6% and +0.5% respectively from Q1 2009.

2010: A year for rethinking the economic, policy, social, business, financial and other systemics of the world people live, work & do business in

In these ultra volatile times, chaotic regulations and laws make people's lives and the work of SMEs even more difficult and unstable.

In these ultra volatile times, policy makers in the EU, USA, etc must formulate policies and laws that provide more stability to people and SMEs

Euro at a 4 yr low against USD on Friday June 4 = good for Eurozone exports & tourism and less competition inside Eurozone from US, China etc. Most Euro crisis talk ignores the elephant in the room, ie the Eurozone "party" Chinese, US & other products had thanks to the expensive Euro! DM to Euro conversion rate was too high and forced GER to adjust internally but "overshot" and caused imbalances inside the Eurozone. The idea that the Euro could (or should) be as "strong" as the DM was unrealistic, unless the Euro only included Germany & "satellites". If indeed (as some argue) the Euro was established to "keep" GER in the EU, then that was a major strategic mistake. Euro/USD rates above 1.2 (1.3, 1.4) should have been averted by the ECB. They caused major competitiveness problems for Eurozone companies & sectors.

Did anyone alert Greek, Italian, Spanish, Portuguese, Irish, French even Belgian, Lux, Fin & Austrian firms they would have to go "German" to survive in uberhard Euro

How many other Euro members except NL are as infatuated with inflation and uber hardness of currency as Germany? The mere fact that 1 & 2 Euro were issued in coins rather than banknotes shows how needs of many members were not taken into account.

The German approach to monetary & inflation policy & single currency isn't the solution to the Euro's problems, au contraire it's the cause. Cheaper Euro is a blessing for all Eurozone firms with price elastic products and/or services; now more competitive both in Eurozone & world. For many years ECB opted for Euro pride (expensive Euro) and uber low inflation rather than competitiveness. Now Euro is priced for exports! Some seem to forget that the huge number of Eurozone firms that export mainly within the zone now have less competition from outside. They also assume that competitiveness must be based on a large corporations economic model; not so! And all those economies (USA, China, UK, etc) that were having a ball selling to the Eurozone are now sweating! How the world turns!


US & EU may not be Venezuela as some argue, but on the other hand, who would have thought in eg 2007 that many of their interventions in 2008-present would be so "socialist"?

"May you live in interesting times" was an Ancient curse (Chinese). Living in 2010 "fascinating times" is then a nightmare for many humans?

Who is afraid of (and/or despises) the European Social Models? There is a major difference between a) fine-tuning and b) de-composing the welfare systems in Europe (UK, Greece, Spain, etc)

If a member of the EU truly wants to participate in only a free trade system & nothing more then WTO rather than EU membership is the way!

One could argue that the stance of the US, UK, Germany & others re Turkey in the last decades was a significant factor in Greece's problems & 2009 crisis. Notably, Greece's main reasons for joining the EEC in 1981 & the EU's inner core (EMU) in 2001 were not economic but national security related. How many of the 27 members of the EU (ex-EEC) joined mainly for national security rather than economic reasons? Quite a few actually! In effect the 1957 establishment of the EEC (6 members) served firstly a security rather than economic goal, b/c of fail to launch the European Defense Community and the European Political Community. In other words, due to French assembly veto of the EDC, the EEC was in effect a political & defense community masked as as economic one!!


A key problem in the EU is that it relies on GER-FRA for most new ideas & initiatives. The mid & small size states must start leading more. The 27 must start working more as a team in the Council and European Council and that means more new ideas from small and mid size states. Read somewhere that Europe has too many countries for its size. Hm! Yet EU of 500 millions has 27 states whereas USA of 300 millions has 50 states


On Friday, the new Hungarian government vowed to avert Greece-Like Crisis. But the situation in Hungary and its causes crash the North/Central vs Mediterranean EU stereotypes!

Life's tough for incumbents in the US midterm elections in 2010!

Consider this: Is, after all, inward migration of human capital more useful to a country than inward foreign investment (direct and other). Globalisation was not meant 2 be best suited 4 the very rich & the very poor, effectively leaving the middle classes out of it. Yet it has. The global systemics and dynamics of this period are, sadly, both inhumane and irrational - philosophy. Globalisation can be made viable only via immigration freedom of the same level as free trade and free movement of capital

Most growth professions in the US are low skilled - low paid!

Americans and Europeans must realise that they live in a Services world, the industrial world has gone East.

Time for a major rethink of the economic as well as social mentalities - axioms of the industrial era

Is labour productivity supposed to be measured by the volume of sweat a worker emits per hour or workday?

Work models: a) work hard b) work smartly or c) word creatively.

Was the good ole "no pain, no gain" work motto a license for (work related) masochism?

If one takes "best practices" from different economies - countries and patches them up into a competitiveness model, one creates a monster! One economy's competitiveness model is another's model for disaster ie they are not to be copied

Is the crucial success - happiness factor nowadays the ability a) to change - adapt to changes or b) to live - feel at home in chaos?

Maybe the solutions to the problems of the Euro and the EU can be found somewhere between Plato and "Alexis Zorbas"

Localisation is not a viable alternative to Globalisation. But Regionalisation is & it is happening to some extent partly because Doha Round and other WTO failures.

I also re-iterate my view that an exit from the WTO could under certain circumstances be in the best interest of the EU (& of the US too).

Yes, Markets (of all kinds) r a useful tool but they do not "know best" nor are they "wise" not even that "rational" (often r drama queens). And of course policies, regulations & laws r very often faulty or at least imperfect. But no1 said Democracy was perfect, just the best one/ In a Democracy, citizens don't vote with their savings, investments or consumption. They vote in a voting booth, alone (no mob).

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 w SPD (2005-09)


The personality clash between A. Merkel & N. Sarkozy is not new. Press reports in recent yrs suggest completely different leadership styles. Nicolas Sarkozy is perhaps the most brainstorming leader in the "West" in a long time. That confuses many other leaders and their advisers!! On the other hand, Mrs Merkel's discussion with actor Simon Baker of "The Mentalist" during her recent visit to Hollywood is somewhat telling.

According to the Guardian Germany saves approx €10bn/year in transaction costs in the intra-Eurozone sales of its goods 12:28 AM Jun 3rd via web

Euro Economic Gov: Greece has an approx +2.5% GDP extra defense expense compared to Germany and NL due to the EU's non military union status.

"Merkel sees the crisis as not only about finance & economics, but as a clash of ideas, values & cultures" The Guardian

Eurozone economic "government" agreement should come with proviso that ECB stops acting like it's the Bundesbank, eg Euro/USD rate

French bid for euro zone "government" gains ground.

Helps dispel the "EU is bad for UK" myth: The Guardian: Britain top in Europe for attracting foreign investment. Which is not surprising considering that the UK acts as a trojan horse for US and other business to the EU single market

Notes and Thoughts, April 24-30

The "Party" (1):
Washington Post, April 24: "For nations living the good life, the party's over, IMF says"

The "Party" (2):
The "party's over" in Europe and the US says the IMF;
Thus back to basics, ie philosophy, symposia, poetry and other arts + etc

Euro crisis:
Was an "expensive" Euro in 2002-2008 a key source of intra Eurozone and #EU imbalances?

Comparisons:
Unemployment in March: EU 9.6%, US 9.7%, Eurozone 10%

Strategic choices:
1) land capitalism, 2) financial capitalism, 3) human capitalism, 4) intellect capitalism

Dilemma:
1) ideas about trade or 2) the trade of ideas?

Competitiveness:
The competitive advantage of thinking - can an economy rely mostly on exports of "intellectual products"?

Exports:
Greece has to make exporting its new national sport

US Growth Rate in Q1 2010
Bureau of Economic Advisors:
US GDP growth in Q1 2010 (annual rate, "advance" estimate): +3.2%
(Q4 09 rate was +5.6%)
2nd estimate: May 27

US vs UK growth rates, Q1 2010
USA: 3.2%
UK: 0.2%

EU and Eurozone Unemployment in March
The Eurozone's seasonally-adjusted unemployment rate was 10.0% in March 2010, the same as in February. It was 9.1% in March 2009.

The EU unemployment rate was 9.6% in March 2010, unchanged compared with February. It was 8.5% in March 2009.

Eurostat estimates that 23.130 million men and women in the EU27, of whom 15.808 million were in the euro area, were unemployed in March 2010.

Compared with February 2010, the number of persons unemployed increased by 123 000 in the EU27 and by 101 000 in the euro area. Compared with March 2009, unemployment went up by 2.546 million in the EU27 and by 1.389 million in the euro area.

These figures were published by Eurostat, the statistical office of the European Union.

Among the Member States, the lowest unemployment rates were recorded in the Netherlands (4.1%) and Austria (4.9%), and the highest rates in Latvia (22.3%) and Spain (19.1%).

Compared with a year ago, one Member State recorded a fall in the unemployment rate and twenty-six an increase. The fall was observed in Germany (7.4% to 7.3%), and the smallest increases in Luxembourg (5.4% to 5.6%) and Malta (6.7% to 6.9%).

The highest increases were registered in Latvia (14.3% to 22.3%), Estonia (7.6% to 15.5% between the fourth quarters of 2008 and 2009) and Lithuania (8.1% to 15.8% between the fourth quarters of 2008 and 2009).

Between March 2009 and March 2010, the unemployment rate for males rose from 8.9% to 10.0% in the euro area and from 8.6% to 9.8% in the EU. The female unemployment rate increased from 9.3% to 10.1% in the euro area and from 8.5% to 9.4% in the EU.

In March 2010, the youth unemployment rate (under-25s) was 19.9% in the euro area and 20.6% in the EU. In March 2009 it was 19.0% and 18.9% respectively. The lowest rate was observed in the Netherlands (7.4%), and the highest rates in Latvia (44.9% in the first quarter of 2010) and Spain (41.2%).

In the USA, the unemployment rate was 9.7% in March 2010. In Japan it was 4.8% in February 2010. (Eurostat, April 30)

US-EU:
Compare the EU budget and the Federal US budget as a % of their GDPs

What the Eurozone needs
The Eurozone needs not a one-fits-all economic & competitiveness model but one that capitalises on diverse "skills" & "assets" of constituents its monetary, fiscal and other policies must "serve" this diversity based economic and competitiveness model. A systemic question is: How does the Eurozone economic, monetary and competitiveness model correlate with the EU one?

EC Consultation on Smart Regulation
This stakeholder consultation aims to collect input for a Communication which the European Commission will produce on Smart Regulation this autumn.

Eurozone Inflation in April
Eurozone's annual inflation is expected to be 1.5% in April 2010 according to a flash estimate issued by Eurostat, the statistical office of the European Union. It was 1.4% in March. (April 30)

Household Savings in the EU and Eurozone, Q4 2009
Quarterly Sector Accounts: fourth quarter of 2009
Household saving rate at 15.1% in the Eurozone and 13.3% in the EU as a whole.
Household real disposable income fell by 0.2% in the euro area (Eurostat, April 30)

UK Immigration
Leaders Debate: Nick Clegg says 80% of immigrants are intra - EU.


UK Leaders Debate
* Re-industrialisation via Science? Did being a uni & #research superpower prevent the US from losing industry to Asia?
* Which of the 3 will dare propose the EU leaving the WTO instead of the UK leaving the EU, in order to revive #manufacturing?

Economic Fortresses:
You may think that the option for the EU and the US (and others) to become "economic fortresses" is "sci-fi", but wait a few years.

EU Single Market:
The EU Single Market must urgently become a market that works primarily for micros, SMEs, self-employed, workers, job seekers and consumers

Current Affairs
Ooops, the mike is still on!

Modern Economic Mythology
Some headlines are like going through the titles of movies at the Adventure/Horror section at a video store
Europa was abducted by a white #bull!!! The bull was Zeus is disguise!
The Greek crisis: God from the machine (Deus ex machina). Which one? Zeus? Apollo? Athena? Poseidon? Hermes?

EU:
Make or break year for a real European Union?

Systemics
* Most events do not have a single cause but a combination of causes that lead to the event (or outcome). A lot of people seek single causes. Too many times we assume that a situation is under control, that someone must be "running the show" when actually that is not so
* The US is complicated, the EU is very complicated, the Euro is too complicated, the world is ..... our "home"


Possessions:
"The things you own wind up owning you" (The Fight Club) ... and the people you owe to wind up owning you too, so owe to no one & own as little as you can! Your health, your mind, your memories as well as empathy for the world are good "possessions"


Philosophy:
Should I unfollow my dreams and friend some friends or should I unfriend my dreams and follow some friends?


Immigration
Show me a country where the child of an immigrant can reasonably dream of becoming a successful entrepreneur and .I will agree with you that that country has indeed a genuine free market.

Human birth-right
In principle, a human should have a "birthright" to legally live & work anywhere on this planet he/she pleases. Immigration should be free, in principle at least between WTO member countries; humans deserve more freedom than goods and capital, right?

EU - Japan trade stats. 2000-2009
Between 2000 and 2009, EU exports of goods to Japan fell in value by around 20%, from 45 bn euro to 36 bn, while EU27 imports from Japan decreased by almost 40%, from 92 bn to 56 bn. As a result, the EU27 deficit in trade with Japan decreased from 47 bn in 2000 to 20 bn in 2009 and the share of Japan in the EU's total external trade in goods fell significantly.

In 2009, Japan accounted for 3% of EU27 exports and 5% of EU27 imports, and was the EU27's sixth most important trading partner.

Among the EU Member States, Germany (10.8 bn euro or 30% of the total) was by far the largest exporter to Japan in 2009, followed by France (4.8 bn or 13%), the United Kingdom (3.8 bn or 10%) and Italy (3.7 bn or 10%).

Germany (13.8 bn or 25%) was also the largest importer, followed by the Netherlands1 (8.7 bn or 16%) and the United Kingdom (7.0 bn or 12%).

Most Member States recorded trade deficits with Japan in 2009. The largest were observed in the Netherlands1 (-6.2 bn), Belgium (-4.3 bn), the United Kingdom (-3.2 bn), Germany (-3.0 bn) and Spain (-1.2 bn).

The highest surpluses were registered in Ireland (+1.3 bn) and Denmark (+1.0 bn).

Nearly a third of EU exports to Japan in 2009 were machinery and vehicles. Other manufactured articles2 and chemicals each accounted for around a quarter of EU exports. Machinery and vehicles accounted for two thirds of imports and other manufactured articles for almost a fifth. At the detailed level, the main EU exports to Japan were medicine, motor cars and parts and pork meat, while the main imports were motor cars and parts, printers and parts and digital cameras (source: Eurostat, April 27)

EU - Japan surplus in Services:

Almost half of EU surplus in services comes from financial services!!

In 2009, the EU exported 16.5 bn euro of services to Japan, while imports of services from Japan amounted to 12.7 bn, meaning that the EU had a surplus of 3.8 bn in trade in services with Japan. This surplus was mainly due to financial services (+1.7 bn), travel (+1.0 bn) and computer & information services (+0.9 bn). Japan accounted for more than 3% of total extra-EU27 trade in services. (Eurostat, April 27)


EU - Japan Foreign Direct Investment

Foreign Direct Investment (FDI) flows between the EU and Japan show large variations, with EU27 investment in Japan of 5.9 bn in 2007, 2.6 bn in 2008 and 0.1 bn in 2009. On the other hand, Japan recorded investment of 18.5 bn in the EU27 in 2007 and 6.6 bn in 2008 and a disinvestment of 2.3 bn in 2009 (Eurostat, April 27)

Risk
Too many decision makers are becoming more & more risk averse & bureaucratic in an increasingly risk averse & bureaucratic world (systemics).


Economics:
Volcan Economics?

History - Mythology:
Helen "of Troy" was actually from Sparta (always according to Homer, no CNN or BBC back then)

Dynamics:
Turns out that the Matrix trilogy was prophetic! (world #economy). Waiting for Neo! Is Nicolas Sarkozy the "Neo" who will save us humans from the "Matrix"? Or or is it Nick Clegg?


Food for Thought: EU - EMU/Euro, US, WTO, etc

In 1990 at INSEAD, my American Economics prof explained that a currency union in absence of a strong federal budget is doomed by design. What has been the effect on Eurozone exports to the world from POR, GR, SP, FR, BEL, FIN, IRL etc of ECB int rate policy in last 10 years. In 90s were firms frm SP, POR, GR, FR, BEL, IRL etc warned they would have 2 become "German" in order 2 b able 2 export after 1999/2002? Is departure from the WTO the only viable way for the US & EU to regain manufacturing and for the EU to make the Euro viable? Is the main divergence of interests in the EU (currency, single market, trade policy, etc) a) between national economies or b) between multinationals and large international exporters and micros-SMEs? To what extent is the Euro 2002-2008 a "victim" of a) China's 2001 WTO entry and b) ECB Euro parity policy 2002-2008?