Perhaps the most interesting dimension is the amicable debate which Mark and I are having about the respective merits of the more activist Fed monetary policy and the rather more quietist approach of the ECB. Highly recommended are Mark’s posts here and here. Perhaps surprisingly, I tend to be more impressed with Greenspan and the Fed, while Mark finds a much more coherent policy from the ECB than I would be inclined to grant: is this an example of the grass on the other side of the fence always looking greener?
Hot on the heels of Dougs update on the tragedy which is taking place while we watch in Louisiana, comes this distressing news from Iraq:
More than 600 Iraqi Shi’ites died in a stampede over a Tigris River bridge in Baghdad on Wednesday, panicked by rumors a suicide bomber was about to blow himself up, an Interior Ministry source told Reuters….
A police source said large crowds had been heading to the Kadhimiya mosque in the old district of north Baghdad for a religious ceremony when someone yelled that there was a suicide bomber among them.
“Hundreds of people started running and some threw themselves off the bridge into the river,” the source said.
“Many elderly died immediately as a result of the stampede but dozens drowned, many bodies are still in the river and boats are working on picking them up.”
Imagine the entire population of Munich, of Lyon or of Copenhagen evacuated because of a natural disaster. That’s the situation now in the New Orleans area.
Bloomberg’s Mathew Lynn has the German enigma more or less right: it’s a toss up.
“Flip the coin one way, and Germany may be about to enter a sustained period of growth, after some painful structural change, which would boost exports further and give consumers more confidence. It would be a re-run of the “Wirtschaftswunder,” or economic miracle, of the 1950s.
Flip it another way, and costly welfare, an overvalued euro and a demographic imbalance will combine to pitch Germany into permanent decline“.
Well I think I’ve clearly placed my bet, so come on ladies and gentlemen, there is just a little time before they call Les Jeux Sont Faits.
French political life is always full of surprises: while some seem past their best (de Villepin), and others are positively wilting (Chirac), new stars constantly appear in the galaxy. In this case Europe Minister Catherine Colonna. Her agility on the Turkey issue, and her sound sense on the ECB make her stand out against what is admittedly a not especially ‘brilliant’ background. Still, maybe when Sarkozy gets over his marital issues he’ll start to give her a run for her money.
On the ECB
Philippe Douste-Blazy: ?Everyone can see that the euro today remains an unfinished project, for lack of a seriously co-ordinated economic policy between members of the eurozone,? he said. ?Let us not leave economic and budget policy to the European Central Bank, let us not leave it just to the European Commission, to people who are not elected.?
Catherine Colonna: ‘elaborated’ on her senior minister’s remarks, saying the eurozone’s policymakers should focus more on citizens’ main concerns jobs and growth while respecting the ECB’s independence. ?Fiscal harmonisation is another important avenue that must be pursued.?
On Turkey Negotiations
Jacques Chirac: “Turkey needs to recognise Cyprus ….the continuing failure to do so poses political and legal problems and is not in the spirit expected of a candidate to the union?.
Catherine Colonna: ?When it comes to Turkey, its future with the EU accession or another solution can only be written at the end of a long process….?Between now and then, the rules have been set out: if the conditions set are met, the negotiations can begin.?
While Peter Mandelson lectures the Chinese that they have a moral obligation to get the EU out of a mess that he got it into, and while clothing shortages and price-hikes apparently loom, I thought some soothing words from Fr?d?rik Bastiat might help calm our troubled nerves . (Hat-tip to Robert and Bob in comments). Back in 1845 Bastiat wrote a spoof petition on behalf of French candlemakers to the French Chamber of deputies:
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.
We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.
I can’t help feeling that no sooner do I lift someone up than I find I have to knock him down again. I ended the last post offering a best case scenario excuse for Jacques Chirac, but now another topic lands on my in-tray: France and strategic industries.
Hot on the heels of yesterdays report that road maps using miles instead of kilometres are now in danger, Tim Worstall tells us the story of the Belgian town council which is trying to implement standardised clothing rules. As I suggest in comments this issue is not as trivial as it seems, and Maaseik is far from the only municipality across Europe to try to implement dress regulations.
Standards that is. The Chinese domestic appliance manufacturer Haier just got voted into the number one slot by FT readers in a survey which included quality, trustworthiness, innovation and management, together with branding. Haier recently hit the headlines when it unsuccessfully tried to buy Maytag – owner of the Hoover brand – now it looks like it may not have been worth the effort. Long live learning by doing.
[The observant among you may have noticed that two earlier post-ettes have suddenly disappeared. The even more observant will have noted that they are now over at our sister blog – A Few Euros More – where they should have gone in the first place. I’ve picked up some bug or other and am a little groggy today, I hope it doesn’t show up too much in my argument :).]
Now, yesterday I focused on some relatively trivial examples of inflexibility on the part of the Commission, decisions I argued that did not really serve the interests on the Union itself. Today I have two more to add to the list (one in this post and one in the next), but these have a rather greater import.
Firstly there is the question of formally opening negotiations with Turkey, negotiations over an accession which would take place ten years from now at the earliest. However in recent days it has become evident, to say the least, that not everyone is happy with the conditions as already laid down for the start of negotiations with Turkey.