History: The Durnovo Memorandum

I just discovered this amazing document recently. (h/t to Mr. David Tenner — thanks, David.)

Durnovo was Russian, and he was the Minister of the Interior for a while under Nicholas II. (His successor was the much more famous Stolypin.) He was a conservative who disliked democracy and was none too fond of capitalism either; his lodestars were Russia’s national interest and the monarchical principle. In early 1914, he was out of office, but still influential… and he was alarmed at the visible drift towards war all around him. So he wrote a 5,000 word memorandum, intended for the Czar’s inner circle, detailing just why this was a Really Bad Idea for Russia. (The text of the memorandum can be found on Google Books here, or as a .pdf over here.)

What’s striking about the memo is how, six months before World War One started, Durnovo absolutely nails it. Nature, conduct, likely outcomes — he’s eerily, astonishingly correct about all of them.

Check it out: Continue reading

Topolánek’s toppling leads to early Czech election

Again, this isn’t me, but Manuel Alvarez-Rivera, of Election Resources On The Internet speaking:

The Czech Republic will be holding an early general election later this year – nearly a year ahead of schedule – after the center-right coalition government of Prime Minister Mirek Topolánek was brought down last week in a parliamentary no-confidence vote. Topolánek, who submitted his resignation last Thursday but remains as caretaker head of government and leader of the Civic Democratic Party (ODS) – the largest party in the Central European country’s bicameral legislature – subsequently reached an agreement with former Prime Minister Jiří Paroubek, the leader of the Czech Social Democratic Party (ČSSD) – the main opposition force – to hold an early poll next October; a specific date remains to be determined. Continue reading

Japan’s Industry Reels Under The Slump In World Trade

Japan’s economy certainly looks to be one of the worst case scenarios globally at the moment. Indeed, as Claus Vistesen puts it (in a very fine and thoroughly argued post – Engine Failure – that you can see here): “Final estimates from Q4 2008 suggested that Japan contracted at an annualized 12.1% which puts Japan in the dubious pole position of biggest GDP declines among industrialised economies.”

This record breaking negative performance seems in danger, not only of being repeated, but even of being surpassed, in the current quarter, since Japanese industrial output slid for the fifth month in a row in February as falling exports gradually took their toll on the entire conomy, with production being down 38.4% year on year. So, as we move towards the G20 meeting later this week, one thing is blindingly obvious: any decisions which don’t address the tricky question of how to get global trade moving again are going to fall well wide of the mark.

Continue reading

European Economic Sentiment Falls Again In March

Both the EU Economic Sentiment Indicator (ESI) covering the EU 27 and the eurozone only one declined again in March, though the pace of decline was slower than in the first two months of the year. The indicator fell by 0.6 points in the EU, and by 0.7 points in the euro area, to 60.3 and 64.6 respectively. As a result the indicators for both regions now stand at their lowest levels since the current series was launched in January 1985. Continue reading

Re:Publica 2009

Tomorrow morning, I’ll take a train to Berlin where I’ll attend this year’s Re:Publica 2009 conference. This year’s umbrella theme is “shift happens”, which isn’t too inappropriate, even for the conference itself: What was – in 2006 – started as a small gathering of a couple of Germany’s better known and activist bloggers, has grown into an international web conference with a specific focus on the political aspects of the social web.

From April 1-3 more than 100 speakers will give keynotes and hold workshops – among others Germany’s federal privacy commissioner Peter Schaar, Martin Schallbruch, director of IT at the German Interior Ministery, Stanford’s Lawrence Lessig, Cory Doctorow of boingboing.net, and Mary C. Joyce, the New Media Operations Manager of the Obama campaign. I’ll be blogging from the conference, but will probably do it on A Few Euros More, in order to not clutter the front page of afoe with smaller updates.

If anyone of you, gentle readers, will also be at the conference, and would be interested in a chat or coffee, please feel free to contact me via my fistful email tobias.schwarz _ fistfulofeuros.net. Hope to see you in Berlin.

Breakdown 1979

The Swedish economy is in free fall, if you believe the latest report from the National Institute of Economic Research. [They] expect GNP to fall 3,9 percent this year. … In the industrial sector, every sixth job will disappear.*

The National Institute of Economic Research calculates that it could take until 2016 before unemployment will decline from the expected peak of 11 percent to a more normal level of six percent.*

The People’s Party’s spokesman for economic policy, Carl B Hamilton, says “No thanks” to a expansive fiscal policy. … Hamilton compares the situation with the seventies, when the rightwing government didn’t get anywhere with that kind of policies.*

It’s always 1979 with these people. That’s when the modern right (and center-right) was formed, and everything will always be seen through that lens.

Ukraine President Says the Economy “Shrank by up to 30%”

Ukrainian President Viktor Yushchenko speaking in the parliament yesterday (Tuesday) called for concerted action to reverse a drop of up to 30 percent in economic output which is in the process od destroying jobs and sinking living standards. Yushenko said the country was “ill-prepared to confront a crisis” which may have lead to a fall of 25-30 percent based on figures from January-February 2009. According to the Kyiv post:

The president urged politicians to end the rows which have thwarted reform efforts as Ukraine gears up for next year’s presidential election. He also proposed political change, including the creation of a second chamber of parliament. “We were ill-prepared to confront the crisis and its first blow was painful and difficult…,” Yushchenko told deputies.

“The consequence of this was a slowdown in GDP growth in 2008 to 2.1 percent…and a destructive fall of 25-30 percent according to figures from January-February 2009.”

Growth in the first two months of 2008 was 5.8 percent.

“Before the crisis, (annual) growth rates in the Ukrainian economy stood at 6.5-7.0 percent. I believe, I am certain that this indicator will be restored,” the president said.

“We have lost our foreign markets and 60 percent of Ukrainian exports. All our foreign currency earnings depended on these markets as did the jobs of nearly two million people in steel, chemicals and related sectors.”

Well having just quoted Claus to the effect that Japan’s economy was occupying pole position in the global contraction, I would now readily have to “correct” and admit that Ukraine are obviously playing in another league, and even though all statistics in Ukraine are “political statistics”, looking at the sort of data I’ve been looking at, the order of magnitude seems about right. The contraction is massive. And even though Ihor Burakovsky’s earlier estimate of a 12% annual contraction for the year now looks to be a little dated, that was an annual (ie all 2009) forecast, and may not be that far from the mark by the time we reach the end of the year. So with that in mind, and taking into account that we have little in the way of really new data at this point, I am simply upgrading and reposting my earlier post, for those who may not have seen it. Continue reading

Spain Bank Shares Plunge

Not surprising news really. When you’ve been in denial for so long this is what you should expect. Spanish banks lost as much as 8 percent at Monday’s market opening (before recovering later) after the government announced the first intervention in a Spanish bank since 1993. The euro was also down 0.9 percent on the day at $1.3177 at 12:000.

From the Wall Street Journal this morning:

Spanish banking stocks plunged Monday as a banking bailout announced this weekend indicated the country’s financial sector may not be as immune to the current financial crisis as previously thought.

The Bank of Spain has taken over management of small savings bank Caja Castilla La Mancha and will provide it with as much as EUR9 billion of liquidity, the government said Sunday.

Stocks in Banco Santander SA (STD) fell 5.6% to EUR5.04 at 0749 GMT, while rival BBVA (BBV) was down 4.4% to EUR6.05, and Banco Popular SA (POP.MC) fell 5.5% to EUR4.68, pressuring the IBEX-35, which declined 3.1%.

Spanish Finance Minister Pedro Solbes Sunday said the intervention in Caja Castilla La Mancha was an isolated case, and that the overall Spanish banking system remained “extremely healthy.”

Yet some analysts are not convinced. “This intervention supposes that the Spanish financial system isn’t immune to the international situation,” Banesto analyst Ignacio Soto Palacios. “We expect a bad performance of the sector in the short run.”

In the short run, in the medium run, and in the long run, if I may be so bold.