Just in time.

Well timed ahead of the French referendum, Deutsche Bahm AG and la SNCF are demonstrating what “ever closer union” can be about… increased quality of life (AP via IHT):

A new high-speed train line will link France and Germany beginning in 2007, cutting travel time between Paris and Frankfurt to under four hours, officials said Monday. … Currently, the fastest train connection between Paris and Frankfurt via Saarbr?cken and Mannheim takes 6 hours, while passengers to Stuttgart have to go via Strasbourg.

Just In Time?

Tony Blair inched home to a historic Labour third term in the UK last week. But looking at the changing tempo of the British economy over the last couple of months, you could be tempted to ask: was this a case of ‘just in time’ electioneering?

At the present time there seems to be a general consensus that Blair will back down during this parliament, and that the natural heir apparent is Economics Minister Gordon Brown. However if Blair won the election despite the Iraq war, and thanks mainly to economic prosperity, we could ask ourselves whether changing winds of fortune might not make the heir rather less apparent when the time for handing over actually comes.
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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

6 thoughts on “Just In Time?

  1. I have long had doubts that Brown would take over from Blair – I’d put money on Straw as a possible candidate for the job.

  2. “was this a case of ?just in time? electioneering”

    Perhaps it depends on whether the election was about the economy or about something else. Some say it was about the war, others about Tony Blair, yet others about immigration; the very diversity of views on what the election was about suggests partisanship on the part of many of those who express an opinion, but it also implies that it wasn’t all about the economy.

    Even if these bad news had arrived two months before election day, plenty of people would have voted on their favourite topic regardless.

    Regards,

  3. “plenty of people would have voted on their favourite topic regardless”

    Oh, I’m sure. But I still think six months from now Blair might have had a harder time of it.

    “the prognosis for the UK economy is not good.”

    This raises another interesting question. Lately I’ve had some harsh words for the euro, and to date the UK has benefited from not being in. But this begs the question of the time scale you use to measure ‘success’ and ‘failure’.

    Recently the UK economy has ‘outperformed’ the other large EU economies, but that doesn’t mean it will always be like that.

  4. Edward,

    I think Germany, for example, might currently be wondering if might have been better off outside ERM.

    Having said that it is probably fair to say that there will always be times when a country is better off with its own currency, and others when it isn’t. I suspect that over the long term it evens out whichever route is taken. The question of whether to join the single currency, assuming a country can meet the criteria on deficits and inflation etc., is therefore largely a political one.

  5. “The question of whether to join the single currency, assuming a country can meet the criteria on deficits and inflation etc., is therefore largely a political one”.

    There are clear theoretical benefits to joining a currency union, including the elimination of transaction costs on currency exchange and stability in the wild world of currency speculation.

    What Germany and France and Italy are learning now is that your monetary union can’t be half-hearted – either you give a central bank all the tools it needs to tinker with an economy, or you give them none at all. The moral hazard of letting member states sort of run their own deficits but only in special circumstances which we’ll make up as we go along offers the potential for all sorts of silliness (see Italy).

    Regards,

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