Death on the Tisza

A sad story from the edge of Europe last week: fifteen Kosovar Albanians died trying to cross the border between Serbia and Hungary. The border there is a a river, the Tisza, which is a large and swift-flowing tributary of the Danube. The Albanians were illegal immigrants trying to move from Kosovo into the EU. Their boat capsized and most of them drowned. The immigrants seem to have been family groups, and the dead include at least two children.

Kosovo declared a national day of mourning last week. Serbia, which still claims Kosovo as part of its territory, made no official statement.

It’s a very sad incident that points to some realities in the region.

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Geert Wilders criminally prosecuted

The Amsterdan Court of Appeal has ordered the criminal prosecution of Dutch MP Geert Wilders (you know, the Fitna guy). I do not have time to elaborate on this right now, but I thought the Court’s argumentation (see first link) makes for some nice debating material. Two snippets:

The Court of Appeal has considered that the contested views of Wilders (also as shown in his movie Fitna) constitute a criminal offence according to Dutch law as seen in connection with each other, both because of their contents and the method of presentation. This method of presentation is characterized by biased, strongly generalizing phrasings with a radical meaning, ongoing reiteration and an increasing intensity, as a result of which hate is created. According to the Court of Appeal most statements are insulting as well since these statements substantially harm the religious esteem of the Islamic worshippers. According to the Court of Appeal Wilders has indeed insulted the Islamic worshippers themselves by affecting the symbols of the Islamic belief as well.

And Godwin is in there too:

However, the Court of Appeal makes an exception as regards insulting statements in which a connection with Nazism is made (for instance by comparing the Koran with “Mein Kampf”). The Court of Appeal considers this insulting to such a degree for a community of Islamic worshippers that a general interest is deemed to be present in order to prosecute Wilders because of this.

BBC News article here. Maybe more later.

Is 2008 Make Or Break Year For Italy’s Economy?

As Italians head to the polls this weekend in order to pick what will be their 62nd government in 65 years (in an election which is being held three years early to boot, due to the collapse of Romano Prodi’s outgoing administration) one odd detail seems to stand out and sum up the multitude of political and economic woes which confront Italy at the present time: we still don’t have economic growth figures for the last quarter of 2007. Now this situation may well be an entirely fortuitous one – Italy’s national statistics office ISTAT are in the process of introducing a new methodology to bring their data into line with current EU standards as employed in other countries (Italy yet one more time is at the end of the line here, but let’s not get bogged down on this detail) – but there does seem to be something deeply symbolic about all this, especially since Italy may well currently be in recession, and may well be the first eurozone country to have fallen into recession since the outbreak of the global financial turmoil of August 2007.

Perhaps the other salient detail on this election weekend is the news this (Saturday) morning that “national champion” airline Alitalia is near to collapse and may have its license to fly revoked, at least this is the view of Vito Riggio, president of Italy’s civil aviation authority, as reported in Corriere della Sera.

“If something isn’t done soon, everyone must realize that Alitalia is on its last legs…. The authority will have no choice but to revoke the airline’s license “in two, maximum three weeks if it can’t show it can find cash to stay in business”

And – as if to add insult to injury – only this week the IMF revised down yet one more time their 2008 forecast for Italian GDP growth, on this occasion to a mere 0.3% , and (as we will see below) a steadily accumulating body of data now clearly suggest that Italy is already in recession, and may well have entered recession sometime during the last quarter of 2007. If confirmed this will mean that Italy will have been in-and-out of four recessions in last five years. So the real question we should be asking ourselves is not be whether Italy is in a recession, but when in fact she entered it, and even more to the point, when will she leave? Continue reading

Business Week loves immigrants

As long as they’re in Spain, that is..

Less snarkily, the article asks the very important question whether this is an answer to the problem of aging populations, and contrasts Spain with Denmark and Nicolas Sarkozy’s election campaign. And it even tackles Edward Hugh’s concerns that the Spanish construction boom may pop with unpredicted consequences.

Meanwhile, Margaret Hodge successfully bears out Barnett’s crack that the British and French are “fearful” on this. The story is here:

At present we prioritise the needs of an individual migrant family over the entitlement that others feel they have to resources in the community,’ Hodge writes. ‘So a recently arrived family with four or five children living in a damp and overcrowded privately rented flat with the children suffering from asthma will usually get priority over a family with less housing need who have lived in the area for three generations and are stuck at home with the grandparents.

‘We should look at policies where the legitimate sense of entitlement felt by the indigenous family overrides the legitimate need demonstrated by the new migrants.

To put it another way, more people should die of carbon monoxide poisoning in Rachmanesque squalor to save Labour/BNP swing votes in constituencies like…Margaret Hodge’s! You can’t begin to guess how much I despise this woman.

Eurozone Economy: When Paradigms Collide

When scientific paradigms collide everyone should duck, at least that is the best advice I can offer at the present moment. The provisional German retail sales for January are now in, and they don’t make especially pleasant reading:

European retail sales dropped for the first time in 10 months in January as spending in Germany slumped, adding to signs economic growth is slowing, the Bloomberg purchasing managers index showed…..German retail sales had the biggest drop in two-and-a-half years, with its index declining to 43.9 from 55.2 in December

Now for those who have been following the German economy in recent months none of this should be particularly surprising, since as is reasonably well known Angela Merkel’s government has just upped VAT from 16% to 19% in an attempt to address the ongoing federal deficit problems. And of course, one months data never offer a complete picture. But this decline in retail consumption in Germany forms part of a much longer ongoing weakness in domestic consumption (and here), one which many were arguing had finally come to an end in 2006. Some of us, however, seriously doubted that this was the case, and hence the initial significance of today’s reading. In particular what we may be faced with are changing structural characteristics of economies as median population ages rise. In particular – and following the well-known life cycle pattern of saving and consumption – more elderly economies may have a higher rate of saving and a lower rate of consumption increase than their younger counterparts.

Some more evidence to back this point of view comes from Japan, where today we learn that household spending in December declined for a 12th straight month, dropping 1.9 percent from a year ago. Yet the Japanese economy is not in recession, and output is actually rising. As Bloomberg say:

Japan’s factory production rose to a record and household spending fell, underscoring the central bank’s concern that growth has bypassed consumers and left the economy dependent on exports.

So please note: growth appears to have by-passed consumers, and the economy is ever more dependent on exports. The same goes for Germany, and this is why I talk about paradigm collision, since the neo-classical theory of economic growth – with its core conception of ‘steady state’ growth – was never built to handle median age related changes in economic performance and structural characteristics. Something new is clearly needed.

Over the coming weeks I will undoubtedly have more to say about all this, as we get to see more of the 2007 Eurozone data, but for now let me point you in the direction of Claus Vistesen, who has been patiently toiling away trying to work through a hypothesis which, in terms of the data we are now seeing, certainly seems more in keeping with current economic realities than the view we currently see emanating from the ECB. His arguments on Japan can be found in depth here, and his latest piece on the eurozone is reproduced below the fold.
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Dutch elections: preliminary round-up/impressions

The 2006 parliamentary elections in The Netherlands have produced some interesting results. Another centre-right coalition of CDA, VVD and D66 (before the latter blew up that very same coalition, see comments) seems to be off the table and the formation of a new coalition will prove to be very difficult what with the votes spread out more evenly over the main parties. There are now four major contenders instead of three. Prime Minister Jan-Peter Balkenende, who will probably continue to be Prime Minister, will now have to consider forming either a left-leaning coalition or risk an unworkable monster coalition. From The Guardian:

The Netherlands is facing political deadlock after the governing Christian Democrats scraped an unconvincing win in yesterday’s election and parties on the hard left and right performed well enough to impede their ability to form a government. As political leaders braced themselves for weeks of horse-trading to form a coalition, the outgoing finance minister delivered a blunt assessment of the result.

“It’s chaos,” Gerrit Zalm, a member of the Liberal (VVD) party was quoted by Reuters as saying. “The real winner is the only party that actually did not participate, which is the party of the anarchists.”

A summary round-up of the results can be found below the fold.
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Balkenende government falls over Ayaan Hirsi Ali

It seems that this morning Dutch PM Jan Peter Balkenende is visiting the Queen to signal the resignation of the cabinet. The smallest of the three parties in the centre-right government, D66 with six seats, has signaled that it would not continue to support the coalition if Immigration Minister Rita Verdonk retains her portfolio. The cabinet refused, so now they have to resign.

The main coalition partners, the CDA and the VVD (Christian Democrats and Liberals), blame D66 for taking umbrage at a minister who was just doing her job. D66 complains that it did not intend to force a crisis on the government, it just wanted Verdonk to resign.

At the centre of this is Ayaan Hirsi Ali. Ms Verdonk is something of a controversial character in her own right, but her handling of Ayaan Hirsi Ali’s immigration status appears to have been the straw that broke the camel’s back. According to Trouw, Ayaan Hirsi Ali finds it “sad” that the cabinet fell over her immigration status.

It’s not clear whether there will be an election forthwith. It seems that Balkenende may be able to form a minority government with just the two main coalition partners, although the lifespan of such a government might be short. Otherwise, Dutch law calls for elections within three months. Polls suggest the centre-right parties do not have the support to come back into government, but it’s close enough that the election campaign might make a difference.

Update: Guy has a much more extensive post on the subject at A Few Euros More, which I didn’t see when I posted this.

Xenophobia and human nature

There has been some cricket chirping on AFOE the past few days, so allow me to make a little bit of noise here and chase them away.

Amnesty International has a new report out, called Russian Federation – Violent racism out of control. I shall quote part of the report below the fold and ask some questions to our readers.
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Hot Labour Anyone?

This post has one sovereign virtue: apart from in the current sentence it will not refer, either directly or indirectly, to the Catalan Statute. The topic it does deal with however is probably equally vital for the future of Spain. The issue is Spain’s housing boom, and the role of immigration in fuelling it. Two facts above all others stand out: Spain is currently ‘enjoying’ the longest and deepest housing boom (in the current round) among all the world’s developed economies (see this useful article from the Economist, or this one from Business Week), and Spain is also enjoying sustained rates of immigration which – at around 2% of the population per annum, may well be the most intense ever experienced in a developed economy. For purposes of comparison I could point out that Spain’s net migration rate of 17.6 per thousand in 2003 contrasts sharply with that recorded for the old European Union 15 for the same year – 5.4 per thousand – and is even well above the level recorded by Germany in the early 1990s – a maximum of 9.6 per thousand in 1992 – or by France in the early 1970s. So there is a housing boom, and there is immigration, the question is, what is the connection?
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The Booming Czech Republic

The Czech Republic is booming apparently. Both per-capita GDP and fertility are definitely on an upswing, although surprisingly perhaps, for once I am not going to try and suggest that these are connected:

The Czech republic has joined Slovenia among new member states with higher levels of wealth per capita than old member Portugal, according to European Commission statistics.

This raises interesting questions which I just touch on in this AFEM post here. (Incidentally, you can find a one-page set of economic statistics for the Czech Republic from the OECD here).

What is perhaps most interesting about the Prague Post article is the way they explicitly link the increase in preganancy to a recent reform in maternity provision (due to come into effect in April), and to the fact that the ‘postponement phenomenon‘ often leads to a spike in births as women who have postponed reach the new ‘childbearing age’.

“The Labor and Social Affairs Ministry recently launched its own reforms aimed at encouraging couples to have children. The reforms provide generous benefit packages and require companies to hold the jobs of employees on leave for up to four years, and, as of April, women will begin receiving a state subsidy of 17,500 Kč ($725) for each newborn child — more than double the current amount.”
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