The Mediterranean Diet?

This should come as a shock, but somehow I am not exactly surprised. Mediterranean cooking evidently isn’t always as benign and healthy as it seems.

Greece was warned on Thursday that it could face legal action for grossly under-reporting its national deficit and debt figures but was told it would not be ejected from the 12-country eurozone.

Revised figures revealed Greece broke the single currency’s 3 per cent of GDP deficit ceiling every year in the 2000-3 period.

The European Union will launch an inquiry to check the veracity of the figures it provided before 2000, the year Greece qualified to join the single currency.

The scale of the inaccuracies has sent shockwaves across the single currency area, which relies on member states to provide sound economic data.

…………Eurostat, the EU’s statistical arm, could start legal proceedings against Athens for breaching accounting rules.

Greece, however, is unlikely to be ejected from the eurozone, even though there are now doubts about whether it complied with the membership rules before 2000.

The new data revised the Greek 2000 deficit to 4.1 per cent from a prior estimate of 2 per cent.

The 2001 and 2002 deficits now stand at 3.7 per cent compared with 1.4 per cent previously. The 2003 deficit, which had already been revised up in May to 3.2 per cent from 1.7 per cent, is now shown to be even higher – at 4.6 per cent of GDP.

Cost-overruns on the building of venues and transport systems for last month’s Athens Olympics games, estimated at more than ?2.5bn ($3bn, ?1.7bn), contributed to a projected deficit of 5.3 per cent of GDP this year.
Source: Financial Times

It is also worth bearing in mind that the accumulated Greek deficit currently is one of the highest in the EU and stands at around 100% of GDP. The interesting question now is what happens next.

What’s It All About Alfie?

Well I suppose it’s better to end the week on a bang rather than a whimper, so here I go with another of those posts. What really ended the week on a high note (or should I say a low one) was the US labour market. And since I am arguing that the euro-dollar parity is being driven at the moment by US labour market data, this news can only mean one thing: more upward pressure on the euro. Which makes me only want to re-iterate, and even more strongly, that an important opportunity was wasted yesterday to take some remedial action by lowering the interest rate. Remedial action which would also have supplied a much needed lifeline to Germany’s beleagured economy. But this, like so many things, was not to be.
Continue reading

Of We Go Again, Ready, Set……….

After a weekend of semantic analysis the currency markets didn’t take long getting back to work – the euro was only a cent off its all time high by late morning. According to Dictionary.com the relevant meaning of volatility is: tending to vary often or widely, as in price – the ups and downs of volatile stocks. Not much danger of volatility here, not if the only way the dollar is going to go is down. Wouldn’t the more appropriate term have been secular decline? But maybe they aren’t against that, and the markets in turning the pressure back on the dollar, have read the signal exactly right.
Continue reading

I Don’t Understand Modern Conservatism

The recent biography of Mrs Thatcher by John Campbell (in particular volume one, The Grocer’s Daughter) did a good job of setting out just how much Hayek’s writings shaped Thatcher’s political outlook from her student days in Oxford onwards, in particular by paying close attention to her political speeches around 1950, when she was running for Parliament in Deptford, some of the few occasions in her early political career when she was making speeches without being bound by front bench discipline.

That part of the Right of the Conservative Party which is most keen to claim its legitimate political descent from Mrs Thatcher is most adamantly opposed to the European Union in general and British participation in the single European currency in particular.

I sometimes think that this should puzzle us more than it does…
Continue reading

Things That Can’t Go On Forever, Don’t

Ok, the sun is shining nicely down here in Barcelona right now, so maybe this is a good moment to come out and provoke a storm. The euro: something gives, but what? Actually it is perhaps ironic that I have chosen today of all days to write this, since for once it seems the euro may fall rather than rise: well to someone who is accustomed to marching out of step, this almost seems par for the course. Never mind, tomorrow, or the day after, we will be back to normal, and the seemingly unstoppable rise will continue. The only remaining question really is: where is breaking point, and what will happen when we get there?
Continue reading

The Tainted Source

Book Review:
The Tainted Source
by John Laughland

A while back, I discovered that my great-grandfather’s estate in Ukraine, Apanlee, figures in a novel which is something of a favourite among neo-Nazis and Aryan supremacists. This led me to a number of websites that I wouldn’t regularly have frequented, including the Zundelsite and Stormfront’s webpage. There I found something genuinely intriguing: A new historical justification for anti-Semitism. They point to a book written back in the 70’s by Arthur Koestler called The Thirteenth Tribe. Koestler – himself Jewish – makes a case that Eastern European Jews originated in the somewhat mysterious medieval state of Khazar, located in part of what is now Russia. He puts forward evidence that many people in this multi-religious Turkic nation converted to Judaism, and that after the disappearance of the Khazar state these people remained Jewish and formed the core of the Eastern European Jewish population.

It is an interesting idea from a historiographic perspective. Others have taken up Koestler’s case since then. I am not a scholar of Jewish history and I make no claims as to the status or veracity of the Khazar hypothesis. What I found fascinating, in a sick sort of way, was how easily radical anti-Semitic movements in the Anglo-Saxon world manage to incorporate this notion into their worldview. For them, this leads them to the conclusion that the Jews aren’t really Jews, and therefore none of the Biblical status given to Jews applies to them. Modern Jews are, in their minds, merely a Turkic tribe that converted to the false Judaism that killed Jesus, and the real Jews were expelled into Europe by the Romans, becoming the Anglo-Saxon people.

It should go without saying that I find this latter hypothesis to be, to say the least, deeply suspect. In fact, laughable would be a better adjective to describe my opinion of it. I bring this up however, because the kind of thinking that motivates this radical reinterpretation of Jewish and Germanic history also motivates a book I have just read: The Tainted Source. Unfortunately, my finances restrict my ability to purchase books for review, and I have not yet had the gumption to write to publishers to ask for a reviewer’s copy. So, the books on Europe that I read tend to come from the discount rack, where many Euroskeptics seem to end up.

Just as Aryan nationalist justify their anti-Semitism by claiming that Jews aren’t really Jewish because of (in their minds) tainted origins, Laughland’s case against Europe is built atop the idea that Europeanism’s roots are tainted.
Continue reading

Stability Pact

First of all, let me say I’m flattered to be invited to guest-blog on Fistful of Euros, which I’ve long thought was the coolest name of any blog ever.

I’d hazard a guess at two big reasons nobody has much to say about the security pact unraveling: First, there’s simply not that much to say at this moment beyond the bare facts of the case (although neither The Economist nor US bloggers Daniel Drezdner and Atrios have really captured the outrage that European editorialists have spewed at Paris and Berlin over this). The message from Germany and France is pretty clear: Do as we say, not as we do. End of story.

Second, this is a pretty difficult topic for a layperson (such as myself) to get his head around. Hence the usage of compact but vague phrases like “Europe Rips Up the Rulebook,” the headline given my recent press review on Slate covering this topic. (Feel free to read that if you want a review of the basic facts of the case from a non-economists’ perspective, plus a dose of what the European papers have said about the topic; but naturally I can’t compete with The Economist‘s coverage.)

So they tore up the rulebook. Seems a little back-to-basics is in order here: What was the rulebook for anyway? And what does this mean for the future of the euro?
Continue reading

A fistful of Euro[s]?

Michael Everson is one of the more interesting characters in my strange little branch of human knowledge. I’ve never met him, but I’m pretty sure we have some mutual acquaintences on various standards committees. He is one of the people behind the Unicode character encoding standard and has been particularly instrumental in getting a number of smaller and more out-of-the-way characters and scripts into the Unicode standard.

He has also been especially vocal in bringing linguistic issues to bear on the European common currency, the most nagging of which is: What is the correct plural of “euro”?
Continue reading