Something Seems To Be Working

According to the Turkish news agency Hürriet Turkish Deputy prime Minister and Foreign Minister Abdullah Gul spoke last night to the NTV news channel regarding:

“the recent wave of legal battles being held against Turkish intellectuals and a senior member of the European Parliament. Gul criticized the actions that were being taken under the controversial article of the country’s new penal code and said, “There seems to be a chain of systematic complaints. There appears to be a mentality deliberately aiming to create chaos.”

The FT quotes Mr Gul as saying:

“There may need to be a new law. As a government we’re watching closely how the existing laws are being implemented.”

The law in question is the one which makes it an offence to insult “Turkishness”. This law has been highlighted recently by the Orhan Pamuk case and now by the strange threat to prosecute Joost Lagendijk, a Dutch member of the European parliament, for suggesting the Turkish army provoked Kurdish rebels in the hope of extending its influence. Interestingly enough Joost Lagendijk supports Turkish membership of the EU. State prosecutors are reportedly studying the complaint against Lagendjik.

Now I have to say that not of this surprises me. Turkey is a society in transition. Fortunately the transition is from a bad equilibrium to a batter one, and we in the EU are doing our bit. I feel that Gul’s statement confounds the fears of the sceptics. In this case EU pressure will be rigourous, and change will be far reaching, but the process will, obviously, have its ups and downs.

So I was really surprised to read in the FT:

“Turkey knows that gaining entry to the EU will become an increasingly arduous task in the coming years, because of widespread antipathy inside the 25-member club towards future enlargement. “

No! Turkey gaining entry to the EU will be an arduous task because it is good for Turkey and good for the EU that it be so. If some people are using their ‘enlargement fatigue’ as an excuse for trying to make things more difficult, then they are the ones who will end up even more fatigued (and frustrated) as time after time Turkey complies with their demands.

This could be another example of shooting-yourself-in the-footism as in complying with the demands Turkey will become an increasingly modern and economically competitive society, which means, of course, that when it does join in 2014 it will, as the largest member state, have even more influence :).

France 2005: the quest for greatness?

It has now been a year and a half since I moved to France. I am not going to bore you with all the domestic challenges the move caused me, do not worry, but I need to mention this since I have only just begun to explore life in France. This post about France will therefore be rather impressionistic. Yet I am sure our esteemed guest poster Emmanuel, and hopefully our French readers, will chime in with corrections, elaborations and the like. I also need to mention that I live in the countryside of Brittany, which means there is some distance between me and whatever happens in Paris and the rest of France.

The first thing I noticed about France is that my day-to-day life has not changed much compared to my extended stay in Belgium. People basically talk about the same things: life is expensive, the weather is relatively mild for the time of the year, the bathroom needs painting, sports, etc. And naturally there has been some cultural talk, since I am a new kid on the block with a heavy foreign accent, mostly about culinary and linguistic differences. Every now and then the conversation turns to politics and society. Rarely so, but still.
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Not So Fast!

It is surely welcome news to find the German citizenry content with Angela Merkel, and that this new found contentment is feeding into more positive views about immediate economic prospects. But oughtn’t we to remember that there is a thing called the first hundred days, and a phenomenon known as the ‘honeymoon period’.

There is also – thank you Nietzsche – something called the ‘will to believe’.

I therefore think, along the lines of ‘one swallow doesn’t make a summer’ that it is a bit too early to be saying that the latest bounce in consumer confidence:

“is the latest indication that a broad-based recovery in Europe’s largest economy could finally be around the corner”.

I think we should wait for a broad-based and sustained recovery in confidence first. What we have is another indication that people are feeling rather better, and that is always good news. But lets just see how they feel when the first ‘reform’ package is unveiled, shall we.

The good news, however, was eclipsed by warnings from economists and politicians that Germany’s new government should not let rising opinion polls and improving economic prospects get in the way of much needed labour market and social security reforms.

“There is a lot more to be done,” Horst Köhler, Germany’s president, told the Stern weekly in an interview published on Wednesday. “I remain convinced the republic is facing a formidable task that will require decisive action and an enormous amount of staying power.”

How anti-American are the French?

Not as much as you might think, argues The Economist in a long, Christmas-special piece about French anti-Americanism (article freely available to non-subscribers) :

In one 2004 poll, 72% of the French had a favourable view of Americans, more even than in Britain (62%) or Spain (47%). Some 68% of those questioned in another poll the same year said that what unites France and America was more important than what separates them. During the 60th anniversary of the Normandy landings in 2004, politicians were frosty, but the people at large showed an outpouring of gratitude to American veterans.

It’s true that there is a big gap between the view of the U.S. (pretty bad) and the view of the American people (quite good) in France, a sure sign that a substantial part of what is regarded as anti-Americanism is mainly driven by anti-Bushism.
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Getting Older, Or Getting Younger?

Warren Sanderson & Sergei Scherbov had a very interesting article in Nature earlier this year (you can find the full article reproduced here on page 5). The article title really tells the story in itself: average remaining lifetimes can increase as human populations age. Put differently, we may be facing the interesting enigma that the longer we live, the longer we have left to live.

But, riddles aside, what Sanderson and Scherbov actually propose is a new metric: the median age of the population standardized for expected remaining years of life. Now why would that be interesting?
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This Sounds A Bit Pie In The Sky

I have just read this (don’t miss the photo):

Constitution, enlargement and budget: Austria hopes to revive Europe with these themes and infuse it with “energy and confidence” when it takes over the rotating presidency of the European Union on January 1

Am I reading this aright, he says, scratching the dust from his sleep-ridden eyes. Aren’t the constitution, enlargement and the budget three themes which are absolutely guaranteed not to inspire enthusiasm just at the moment (unfortunately)?

As usual the FT takes me back to the hard world of reality:

Austria intends to make the fight against fraud in value added tax a cornerstone of its European Union presidency, in an effort to end billions of euros of losses in annual revenues at a time of stretched national budgets.

Ah, yes, this sounds much more like it.

When The Curves Invert

Two bits of news this week appear to be unrelated. The interesting question is whether appearances are once more deceptive.

Firstly the US Treasury note situation:

At 6:23 am ET. the 10-year note yielded 4.393 percent while the two-year note yielded 4.396 percent.

Or as the FT puts it:

Yields on 10-year US Treasuries briefly fell below those on two-year notes on Tuesday for the first time in five years – a rare event that in the past has often heralded a recession.

Now there is – more or less – a consensus of opinion that this is not a harbinger of imminent recession this time round. So what then does it mean? Aha, would that we knew! There has however been another curve inversion was officially announced during the last week. According to this AFP report:


Japan’s population fell for the first time in 2005, the government said, calling it a “turning point” that will force the world’s second largest economy to adapt to a rapidly aging society….Deaths are likely to outnumber births by about 10,000 this year, the first decline since 1899 when Japan began compiling the data, health ministry figures showed

.”

The data suggest that Japan’s population may actually have been falling since October 2004.So where might the connection be? Well, back in April the soon-to-be Fed Chairman Ben Bernanke made his now notorious Global Savings Glut speech. In that speech he said the following:

one well-understood source of the saving glut is the strong saving motive of rich countries with aging populations, which must make provision for an impending sharp increase in the number of retirees relative to the number of workers. With slowly growing or declining workforces, as well as high capital-labor ratios, many advanced economies outside the United States also face an apparent dearth of domestic investment opportunities. As a consequence of high desired saving and the low prospective returns to domestic investment, the mature industrial economies as a group seek to run current account surpluses and thus to lend abroad

So he was arguing that ageing populations tend to increase the savings motive and produce an investment dearth. This flow of savings looking for investment tends to nudge down global interest rates. Perhaps the best discussion I have seen anywhere of the inversion phenomenon is this one from the Morgan Stanley GEF team. Clearly this is a complex problem, and they themselves have no consensus, but I did note this point from the Japan-based Robert Feldman:


In how many of the eight inversions over the last 40 years were international markets as closely intertwined as they are today? My point is that, as long as Bank of Japan still has huge quantitative easing in place and the yen carry trade is alive and well, part of the yield curve flattening in the US will be due to international factors and doesn’t necessarily signal a recession

.”

Here there are two points, the increasing efficiency and integration of global capital markets, and the special situation in countries like Japan. So to return to where I started, are the two inversions related. My answer would be a qualified yes. There is some relation. The hard part is to determine the nature and extent of the relation.

Nollaig shona daoibh

Now of course I cannot allow Edward to remain the only afoer offering our readers holiday greetings in an obscure Celtic tongue. And I’ll throw in a nice wee pressie to boot: nazis in disarray!

Back in September 2004 I wrote in a comment to a post about neonazi electoral gains in eastern Germany:

As many have pointed out, electoral support for the extreme right in Germany is a fickle and transitory thing, and the Union has a habit of picking up the strays. The Reps and the DVU have had their 15 minutes, now it’s the NPD’s turn. With any luck, this election will have been their high water mark.

Well, it looks like that is indeed the case, and just in time for Christmas, too.

As the Frankfurter Rundschau reports (auf Deutsch), three NPD members of Saxony’s state parliament have left the party (and its parliamentary fraction) in the past week. Two of them have signed on to a programme for those seeking to escape neonazi circles, and all have requested police protection. The NPD are left, then, with nine of the twelve seats they won in the last elections. Their shrinkage has an immediate and positive result: thanks to the reduced size of the NPD fraction, the party lose half the committee positions to which they are entitled. They also forfeit a portion of the state money every party gets.

The party itself is livid, of course, stamping their booted little feet and fuming about ‘treason’ and ‘conspiracy’. I believe the word they are looking for is ‘Dolchstoss‘.

Nadolig Llawen

Nadolig Llawen a Blwyddyn Newydd Dda o Barcelona

Which is Welsh (the language of my childhood) for Merry Xmas and a Happy New Year from sunny Barcelona. Well, I just added the sunny part, since the sun is, right now, also rising.

Since I am not religious, and I am not really a dedicated fan of e-commerce, xmas – as I live it – is maybe a time for thinking about roots and origins.

The New Year, however, is a time for looking towards the future. May 2006 be just as interesting as 2005 has been. For all of you. We couldn’t ask for more.

Enjoy yourselves everyone!

Going Too Far

Last night I went to see the film Luther - which unsurprisingly enough is a biographical epic which focuses on the life and works of Martin Luther. I have always felt a strange attraction to Luther, not for his religion, but for the ‘here I am, I can do no other’ part. This post, however, has little to do with the film, except in that it is about how small changes in our ways of thinking can have big impacts.

You see all through the film I couldn’t help thinking about the recent act of ‘personation’ carried out by the Spanish radio station cadena COPE, and about just how stupid the people behind it really seem to be.
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