Halftalk Post : Newsworthy: Europe

Draghi pins hopes of saving euro on plan to buy struggling countries' bonds | Business | The Guardian

Could this be one of the last kicks of the can? the 'big bazooka' that finally brings some calm and order? Even if not, it certainly does seem to be momentous, not least because if overrode German opposition, Also, and this I find patricularly noteworthy, the bond buying would be 'sterilized' - which means any money used to buy bonds, will be taken from somewhere else, which in effect would be a transfer of money from the wealthier areas, to the poorer, or at least, to those who are going bust (which is slighlty less fair!). Given how such sharing of wealth is a crucial part of any cohesive 'nation' (i.e. a society bound together enough to consider sharing amongst itself), could this be another tiny step on the road to European integration? Hearts may yet be away behind, but maybe they will inevitably also, follow the money?

BUT - while from grand EU strategy this might seem logical, a very nasty devil could lurk in the detail. While I'm glad to see the ECB doing something major, I am still firm in the belief that one can't cut one's way out of recession. Perhaps inflation is the only way to get rid of the debt effectively, without creating more, and this would mean the 'sterilization' is exactly what's not wanted, since it is this which is supposed to prevent inflation. The problem of course is that for every inflation might destroy debt, but it destroys savings too, so maybe even more than sterilization this road would require a society prepared to take the hit for its (possibly wasteful) brother. Looked at it that way, things don't look quite so bright

other comment pieces :

Impression left by announcement on unlimited bond buying is that it is technically sound ? but based on flawed economics : Mario Draghi rescue plan with more misery at its core will not save euro
http://www.guardian.co.uk/business/2012/sep/06/mario-draghi-rescue-plan-euro

The "rescue" plan involves governments in Rome and Italy driving their economies deeper into depression to reduce the interest rates they pay on their borrowing. The ECB seems to think that the reason investors are giving Italy and Spain the cold shoulder is that they are not cutting hard enough, fast enough. Steeped in economic orthodoxy, Draghi makes George Osborne look like a paid-up member of the Maynard Keynes appreciation society.
The reason investors demand high interest rates when they lend to Italy and Spain is their concern about the impact of permanent recession on public finances and banks. A rescue plan that has at its core more demand-destroying measures will do more harm than good.
To sum up, Draghi has bought Europe a bit more time. The can has been kicked a few metres down the road. He has done so by incurring the wrath of the Bundesbank and will know that if this fails, there is little more the ECB can do.

Markets are impressed by Mario Draghi's plan for unlimited government debt purchases, but not every expert is convinced : ECB bond buying: what the economists say
http://www.guardian.co.uk/business/2012/sep/06/ecb-bond-buying-what-the-economists-say

As expected, the ECB will buy short-term bonds provided that there is accompanying pressure on politicians to maintain structural changes. I believe it is essential that such conditions are applied, not just for discipline but also because the actions taken by the ECB are not without cost.
Opposition to the ECB action is usually made on the ground of monetary financing or inflation. In fact, one of the costs is not so much inflation of consumer prices but long-term lowering of returns to most pensioners and savers, as well as increasing the cost of pension contributions for the working age population.
This can, in turn, also negatively affect business competitiveness. These sectors of society are of course already affected as a result of the cycle of stimulus, lowering of interest rates, and quantitative-easing-type measures that have been taken in the US and Europe.

Monday, July 30, 2012

The eurozone can learn from financial crises in the developing world | Comment is free | The Guardian

Friday, July 20, 2012

Europe's democracy dilemma – how and when to step in?

As eastern European countries become more autocratic, Brussels must build a legal and political toolkit for intervention
Europe's democracy dilemma – how and when to step in? | Jan-Werner Mueller | Comment is free | guardian.co.uk

Wednesday, June 27, 2012

Swedish Society, together to be apart

Interesting documentary on the Swedish model, which shows how despite often being held up as the ultimate welfare state, and hence presumably left wing Swedish society is at root almost more individualistic than even some conservatives in other countries would like. The point seems to be that they are prepared to have (and pay for) a large and intrusive state, because it actually thereby enables individuals to operate more freely and competitively.

BBC - BBC Radio 4 Programmes - Analysis, Cameron's Swede Dreams

Related articles with some extracts:

http://www.bbc.co.uk/news/magazine-18432841

Sweden is number one in Europe for competitiveness. Its economy last year grew six times faster than the UK's - and the deficit is at zero.
Yet in the 1990s, Sweden was even worse off than we are now. The economy came crashing down when a housing bubble burst. Interest rates hit 500%; debt and unemployment reached crisis levels.
"Oddly, Sweden - which is regarded by many as the most socialistic country in Europe - has managed to do things that right-wingers in Britain think would be impossible in their own country: too pro-market, too right-wing for even British consumption," he says.
The fact is there is mutual trust between Swedish unions and employers and Scandinavian countries rank highest in the world when it comes to social trust - 70% of Swedes say they trust one another; just 35% of Brits feel the same way.
The welfare state was designed to do away with dependency of all kinds: whether on charity - or even on family members. Professor Tragardh calls it a "Swedish theory of love". It says that love can exist only when neither party is dependent on the other. The state is seen as the vehicle for achieving this autonomy, hence the Swedish model aims to get women into the workforce, provide a good education to equip children to fend for themselves, and take on the burden of caring for elderly people. In other words, according to Lars Tragardh, "the state is there to provide fundamental resources that allow individuals to operate freely and competitively in the free society, including the market society." Not so much the land of free love, as of the free market.

http://www.nytimes.com/2006/11/13/world/europe/13iht-swedes.3512334.html

A recently published and widely discussed book, provocatively titled "Is the Swede a Human Being?" ("Ar svensken manniska?"), contends that Swedes are the opposite of collectivists: they are deeply individualistic.
"The main purpose of the Swedish system has been to maximize the individual's independence," Tragardh, who has spent most of his life in the United States, said in an interview. "The picture of a collectivist animal is completely wrong; the modern Swede is a hyperindividualist."
[The shyness of Swedes] is at heart the expression of a fundamental longing for individual autonomy and a desire not to depend on or be indebted to anyone, particularly not in intimate relationships - what the authors call "the Swedish theory of love."

http://www.economist.com/blogs/bagehot/2011/01/britain_and_nordic_world_0

At the World Economic Forum in Davos this week, the five Nordic governments are to present a really interesting paper on "The Nordic Way", which sets out to challenge what it calls the "half-truth" that Nordic voters are simply rather left-wing and wedded to a big, intrusive and conformist state. Nordic voters like the state but are also exceptionally individualistic, the paper asserts. The circle is squared because Nordic voters believe that the state (which usually works pretty well in countries like Sweden) is the best referee and guarantor of their individual freedoms.
"The Nordic Way" cites a paper that compares Sweden to Germany and the United States, when considering the triangle formed by reverence for the Family, the State and the Individual. Americans favour a Family-Individual axis, this suggests, suspecting the state as a threat to liberty. Germans revere an axis connecting the family and the state, with a smaller role for individual autonomy. In the Nordic countries, they argue, the state and the individual form the dominant alliance. The paper cited, by the way, is entitled: "Pippi Longstocking: The Autonomous Child and the Moral Logic of the Swedish Welfare State". It hails Pippi (the strongest girl in the world and an anarchic individualist who lives without parents in her own house, with only a monkey, horse, a bag of gold and a strong moral compass for company) as a Nordic archetype.
You do not hear much about the Big Society in Sweden, it is true. But it is a mistake to see only the state. The phrase "statist-individualism" is an ugly one, but it seems a pretty apt description of these societies that Mr Cameron seems to admire sincerely. The British are too grumpy and too mistrustful of their state to buy into anything as intrusive. But is there still a link between the Big Society and the Nordic Big State? Maybe it is this: in the Nordics, the state is the final guarantor of equal access to good things for autonomous individuals. In the Big Society, perhaps the hope is for the state to act as a catalyst for access to good things. There is one final difference, of course; we have already seen that the Nordic model works.

http://www.guardian.co.uk/commentisfree/2012/feb/10/swedish-model-big-society-david-cameron

transcript of Analsysis program :
http://news.bbc.co.uk/2/shared/spl/hi/programmes/analysis/transcripts/18_06_12..pdf

In a way it can be sad as well because if you get this feeling that you pay your tax, then you don?t have to be part of society in other ways, you know civil society will be much weaker, the family will be much weaker. I mean if you feel that you know I pay my tax, then I won?t give away money if you meet a beggar in the street because you feel like well I pay high taxes, this is you know not my problem; it?s the social welfare state who has to take care for this.

Sunday, June 3, 2012

The dark side of Poland and Ukraine

Euro 2012: antisemitic echoes that threaten celebration of football | World news | The Observer
What is most bizarre is the antisemitism in Poland, despite there being virtually no Jews (for the obvious reason), but still horrific.
" Perhaps that's to be expected given the catastrophic destruction visited on the two countries, but it has led many to a world-view that is a perversion of the golden rule: do unto others as others have done unto you.
It is most visible in the culture surrounding football. Racism, xenophobia, Jew hatred, all manifest themselves at the footie. Why this hatred should be so strong has social historians grasping for answers.
Jan Olaszek, of Poland's Institute of National Remembrance, says: "People don't know history. They know stereotypes." This is what lies behind one of the strangest phenomena of contemporary Polish life, what Olaszek calls "antisemitism without Jews".
Poland was the centre of the Holocaust. There are virtually no Jews left in the country, yet antisemitism persists. This is what Olaszek means by stereotypes. "Some Poles think all Jews were communists."

Wednesday, January 11, 2012

If not a borrower a lender be...

very surprised to hear on the BBC this morning the answer to the question 'what's the next Eurozone country causing most concern' - Austria!

Had smugly thought to be more insulated here than most places, but problem seems to be Hungary is going down the tubes, and the Austrian banks lent there massively. Just shows, even if a country itself isn't doing reckless borrowing, it's banks can still manage to do reckless lending. Though I predict again the top sport of 2012 to be can-down-road(or strasse) kicking. Maybe culminating in a final round of bucket kicking.

Though relevant to point out that all Eurozone countries are judged to have benefitted from the common currency (at least until the crisis) and Austria itself was one of the biggest winners

http://www.monstersandcritics.com/news/business/news/article_1684804.php/Austria-and-Finland-biggest-winners-from-euro-study-shows

Sunday, December 11, 2011

Observer summary of current situation between the UK and Europe

A niceround up of what Cameron's side lining of the UK at the recent EU summit might mean for Britain and Europe in various domains (finance, diplomacy, foreign affairs)

Europe crisis: the seven key questions Britain must face | World news | The Observer

Saturday, December 10, 2011

As the dust settles, a cold new Europe with Germany in charge will emerge

"After the EU summit, the prospect is
of a joyless union of penalties,
punishments, disciplines and seething resentments"

http://gu.com/p/3424m