ECB board member: Euro-bashing is Anglophone overload

Germany’s man at the ECB, Jörg Asmussen, in a speech about monetary policy communication today:

For the euro area and the ECB, the situation is even more peculiar, because the influential “commentariat” comes predominantly from outside the euro area. The big English-language newspapers, the news agencies and wire services that shape opinions in the economic and financial sphere on the Continent are all writing from outside the euro area. There is, of course, nothing wrong with friendly outside advice. And I certainly do not wish to come across as whining and complaining.

But it simply remains a fact: the analysis, discourse and policy prescriptions that are propagated come from the outside. Maybe inevitably, they come with a certain disinterested detachment. As if the outside “spectators” are not affected by what is happening.

And they come with a dangerously narrow and exclusive perspective on the economics of the monetary union. But if the profound political commitment of Eurozone countries to the historical project of “ever closer union” is neglected, the assessment remains superficial and partial. And the suggested policy responses may be biased or naïve.

Why does it matter? Because the discourse influences some of the most important financial markets for the Eurozone. If expectations that have been built up are not fulfilled, if alleged certainties do not materialise, if actions from politicians or central bankers are not forthcoming as anticipated by the “market consensus”, the reaction can be grave: volatility, contagion, all the way to complete market dysfunction. The systemic impact can be major, driving financial institutions, as well as sovereign borrowers into real difficulties.

It doesn’t take much extrapolation of what he says to envisage that at least in the ECB’s mind, there is a SPECTRE-like entity of cackling pundits consisting of Paul Krugman, Martin Wolf, Simon Johnson and others, though who exactly has the white cat sitting in their lap as they press “Publish” is not specified. More substantively. there is a strange symmetry between this view and the pre-crisis gloating of the European Commission that the single currency’s American critics had been all wrong.

NHS in “worse than unlimited budget for single patient” shock

The Wall Street Journal Europe uncorks an instant classic in explaining the longevity of Lockerbie bomber Abdel Baset al-Megrahi:

Karol Sikora, a leading cancer specialist who examined Megrahi shortly before his release, explains that predicting how long a patient with end-stage prostate cancer has to live is “a value judgment of probability,” not an exact science. But Dr. Sikora also writes that his initial three-month prognosis was “based on his treatment as an NHS patient in Glasgow at the time, when not even standard docetaxel chemotherapy was offered.” By contrast, “Mr. Megrahi almost certainly had excellent care in Tripoli.” Think about that one: Get treated for cancer by the U.K.’s National Health Service, and you’ll be dead by Christmas. But get treated for the same cancer in Libya, and you may have years to live. No wonder Americans are terrified of government-run medicine and rationing boards.

It’s painfully obvious but apparently nonetheless necessary to point that Mr al-Megrahi was in this case receiving care as a political trophy in a petro-state with an open-ended government budget available to embarrass his former hosts. So Yes, his care was probably better than  the NHS standard available to him in Glasgow, but as Dr Sikora also explains, there was a lot of variability around the now-notorious “3 months to live” prognosis even at the time it was issued. His care was also a lot better than someone without health insurance in the USA would receive, but who wants to descend to cheap health system point scoring based on a single case. Besides the Wall Street Journal.

My own view is that there’s no big conspiracy theory or undiscovered files behind Mr al-Megrahi’s release. Instead, the issue played into the self-righteousness of the SNP government. Up against that, geopolitics didn’t stand a chance.

Can This Really Be Europe We Are Talking About?

In recent days I have been think a lot, and reading a lot, about the implications of Greece’s recent election results.

At the end of the day the only difference this whole process makes to the ultimate outcome may turn out to be one of timing. If  Alexis Tsipras of the anti bailout, anti Troika, party Syriza won and started to form a government then the second bailout money would undoubtedly be immediately stopped. On the other hand if the centre right New Democracy wins and is able to form a government, as the latest polls tend to suggest, then the country would quite possibly try to conform to the bailout conditions, but in trying it would almost certainly fail, and then the money would be stopped. Before the last election results, it will be remembered, this was the main scenario prevailing. Continue reading

Frelections: roundup

The day after, some French election blogging. A somewhat ambiguous photo from the Sarkozy rally – he’s despairing, she’s…not. Sarkozy gets made to eat his Flamby, an allusion to Francois Hollande’s enemies’ habit of likening him to a wobbly jelly. But in the end, it wasn’t a wobbly jelly but more of an epic blob. Sarko kept throwing punches, but it just kept coming.

The exact details show that the polls narrowed at the last, to 51.6% vs 48.4%, not as decisive as you might have expected earlier in the campaign. However, as the winner said in an interview last week, the nature of the poll is that a win is a win, and the Left’s support, the peuple de gauche, put on a spectacular crowd at the Bastille for Hollande to struggle through with the sixty motorbike cops that were the security state’s own special tribute, today’s version of a bodyguard of lancers.

Transition of power in France is somewhere between the astonishingly swift process in Britain, where the old and new prime ministers’ official cars both park up outside Buckingham Palace while the first has their farewell audience and the second officially accepts the appointment, and the weeks long grind from a US presidential election to inauguration. The handover was fixed this morning for the 15th of May.

It couldn’t be much later, as the president will then have to zap off to the G-8 summit at Camp David on the 18th and then on to the NATO summit in Chicago on the 20th, as well as whatever happens on the European scene in the meantime.

Catherine Ashton

Is it time for AFOE to declare victory on this post about Catherine Ashton’s appointment as EU foreign minister (but we don’t call it that)? Laura Rozen writes that the Iran nuclear talks are making progress for the first time in ages.

The Russians are being constructive. The head of the Israeli military thinks that there has been no decision to build the Bomb, and that the talks are going the right way. David Ignatius sketches some details of a possible agreement, which would combine a halt to uranium enrichment with a promise of regular supplies of 20% enriched uranium and explicit recognition of the right to own the fuel cycle. And it’s been suggested that the Iranian government is trying to prepare public opinion for a deal.

In this context, Laura Rozen profiles the three women at the core of the Western negotiating team, Catherine Ashton from the EU, Helga Schmid from the German Foreign Ministry, and Wendy Sherman of the US State Department. Quote of note:

“She is totally working class,” the European diplomat said. “The criticism from the British press if anything is that she is from northern England, and speaks with a northern accent…

Yeah, well, if you think international understanding is difficult…

Last Days Of Pompeii?

This week we got what seemed to be some good news in the ongoing Euro debt crisis. Bond spreads in many of the countries on Europe’s periphery tightened vis-their German equivalents. Unfortunately we also got some bad news to go with it (no silver lining these days without the accompanying black cloud it seems): the tighter spreads were the result of a weakening of German bunds (or a rise in their yields) following what many considered to be a failed bond auction.
Continue reading

Science Fiction?

“What do I think about the legacy of Atatürk, General? Let it go. I don’t care. The age of Atatürk is over.”
Guests stiffen around the table, breath subtly indrawn; social gasps. This is heresy. People have been shot down in the streets of Istanbul for less. Adnan commands every eye.
“Atatürk was father of the nation, unquestionably. No Atatürk, no Turkey. But, at some point every child has to leave his father. You have to stand on your own two feet and find out if you’re a man. We’re like the kids that go on about how great their dads are; my dad’s the strongest, the best wrestler, the fastest driver, the biggest moustache. And when someone squares up to us, or calls us a name or even looks at us squinty, we run back shouting ‘I’ll get my dad, I’ll get my dad!’ At some point; we have to grow up. If you’ll pardon the expression, the balls have to drop. We talk the talk mighty fine; great nation, proud people, global union of the noble Turkic races, all that stuff. There’s no one like us for talking ourselves up. And then the EU says, All right, prove it. The door’s open, in you come; sit down, be one of us. Move out of the family home; move in with the other guys. Step out from the shadow of the Father of the Nation.
“And do you know what the European Union shows us about ourselves? We’re all those things we say we are. They weren’t lies, they weren’t boasts. We’re good. We’re big. We’re a powerhouse. We’ve got an economy that goes all the way to the South China Sea. We’ve got energy and ideas and talent – look at the stuff that’s coming out of those tin-shed business parks in the nano sector and the synthetic biology start-ups. Turkish. All Turkish. That’s the legacy of Atatürk. It doesn’t matter if the Kurds have their own Parliament or the French make everyone stand in Taksim Square and apologize to the Armenians. We’re the legacy of Atatürk. Turkey is the people. Atatürk’s done his job. He can crumble into dust now. The kid’s come right. The kid’s come very right. That’s why I believe the EU’s the best thing that’s ever happened to us because it’s finally taught us how to be Turks.”

The Dervish House by Ian McDonald, pp. 175-76