Author Archives: P O Neill

About P O Neill

is Irish and lives in America.

Before the Baltic Tigers

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Former PM of Estonia Mart Laar has an interesting opinion piece in the Wall Street Journal today; incidentally his bio notes that besides his stints as PM, he was (is?) an economics advisor to the government of Georgia.  Anyway, being an opinion piece, he’s pushing his view that bad government policy decisions have played an underestimated role in the economic crisis, and in an age when we’ve seen private sector leaders shown the door far more quickly than top government officials, he has a point.  But his view of what constitutes good government policy seems to be amount to whether or not the country had a flat tax.  So for instance, he gives his homeland a relatively good grade for its economic condition, compared to Latvia, but then we get the news from Edward today that Estonia turned in the 2nd worst EU growth performance in Q4 last year.   But glaring in its absence from his list of European liberalisers is Ireland, and there’s a reason for that.

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Watching it all on TV

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There is a lot to pick over in Gordon Brown’s testimony to the House of Commons Liaison Committee yesterday and in particular one suspects that his account of what the Financial Services Authority did or did not tell the Treasury about problems with the HBOS business model is an issue of which we have not heard the last.  But there was another claim deserving of scrutiny because it goes to the heart of the lack of preparedness for the crisis –

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An Irish eye on Greece

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One of the most noticable factors in 2009 has been an upsurge in “street” militancy in reaction to the global economic crisis.  Perhaps policymakers could console themselves that trouble in Iceland and Latvia reflected dire economic circumstances, but the wildcat energy sector strikes in the UK and the Waterford Crystal sit-in in Ireland seem to have caught the powers-that-be (including the union leadership) by surprise.  Of course when it comes to street activism, we’re all taking lessons from France and Greece, where it seems to be a natural component of politics.  But here’s an interesting perspective from Richard Pine, writing for Irish Times readers about what he sees (and doubtless others agree) as fundamental fissures in Greek society which go beyond a standard cynicism about politics.   From the Irish perspective, I read this in conjunction with a now typical day’s bleak news from Ireland and wonder why the people still seem patient (or is it resigned?) with rapidly worsening circumstances.   But of course Europe is still a Europe of nation-states so it’s not easy to extrapolate from one to what we expect in another.  Food for thought.

Putin would pay the airfare

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The honour of the last question ever to be asked at a Bush Administration press briefing goes to Georgia –

Q … And also, in the conversation that you had I think with Mr. [Mike] McCurry that you referred to, you made an offer to the Georgian President to be a guest at the President’s institute, and some people in Georgia took this as an opening for him to leave his current position. Was that meant?

MS. PERINO (press secretary): No, no, no, no, no. (Laughter.) I was asked a question about the President’s plans for his freedom institute, and one of the examples he has used is that leaders like Mikheil Saakashvili would be somebody who would maybe come and provide a lecture to the students at Southern Methodist University at some point. But it certainly wasn’t an invitation to leave the country or his leadership position.

Gordon Brown: Step-Skipper

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For some months now there’s a being a bit of amnesia about how we got to this point in the global banking crisis.  Does anyone remember 4 months ago when the Swedish model of banking crisis resolution was hotter than the Ikea catalog? Everyone said that they were reading up on the “bad bank” approach in which the government took over the banking system, the dodgy loans therein were dumped into a separate management entity and a slimmed down recapitalized system was returned to the private sector.  But a funny thing happened on the way to the 2008 version of that bailout: no one did the bad bank part (to be fair, Belgium and Switzerland have done bits of it on a selective basis).

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The curse of Cheney

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Dick Cheney in Azerbaijan 3 months ago –

And we support the people of Azerbaijan in their efforts, often in the face of great challenges, to strengthen democracy, the rule of law, and respect for human rights, and to build a prosperous, modern, independent country that can serve as a pillar of moderation and stability in this critical part of the world.

Meek US State Department statement issued on a slow news day, 30 December –

We deeply regret Azerbaijan’s decision not to renew the broadcasting licenses of Radio Liberty, Voice of America and the BBC. These media organizations play a crucial role in supporting democratic debate and the free exchange of ideas and information. This decision, if carried out, will represent a serious setback to freedom of speech, and retard democratic reform in Azerbaijan.

We remain committed to working with the government of Azerbaijan to find the proper legal framework within which these radio and TV broadcasts can continue.

This came just over a week after the USA had made Azerbaijan eligible for tariff concessions on its exports to the USA — the kind of thing that can be revoked from African countries if they are judged to have regressed on political pluralism.  It’s as if there’s something special about Azerbaijan that trumps such concerns.

Ukraine kicks to touch on gas crisis

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The Wall Street Journal (subs. req’d) is reporting that Ukraine is to settle the $2 billion debt to Gazprom via loans to the public gas company Naftogaz from two state-owned banks.  As Edward explained a few days ago, the gas debt is one of the open wounds of the economic crisis in Ukraine, with many questioning whether stabilization is possible with the huge gas debt unresolved.  And this solution really does nothing to resolve it.  The debt is now just shifted from Naftogaz to the state banks, and none of the ideas to put the gas transactions on a more sustainable path (e.g. by raising transit fees for gas destined for the EU) have been pursued.  Perhaps it’s another sign of the political paralysis.  But it’s not clear that the IMF will be amused by this nine zeroes debt juggle.

UPDATE: It seems that reports that the payment would resolve the latest Russia-Ukraine dispute are premature.  Naftogaz appears to have made a transfer to Gazprom that did not include “late fees” and deducted $100 million.

Left unsaid

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Among the International Monetary Fund recommendations following the mission to Belgium –

Tackle the imbalances inherent in the current fiscal federalism arrangements. Resolving vertical imbalances will require shifting more of the burden of fiscal consolidation and preparation for population aging from federal/social security to community/regional entities. Horizontal imbalances between communities/regions should be reconsidered with a view to providing a better match between spending authority and revenue-raising responsibility and improving the transparency and incentive effects of intergovernmental solidarity mechanisms.

God knows how long it took to draft such a masterful dodging around Belgium’s regional sensitivities, albeit at the expense of a paragraph that will bewilder anyone who doesn’t know much about Belgium.

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