Well, I just lost a long post about the so-called Swedish model due to my own stupid carelessness the combined malevolence of Windows XP and MS Word.
Anyway, the main point was to say that the article on the subject (free for non-subscribers) in last week’s issue of The Economist was really a dishonest hack job. And my critique went roughly like this :
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John Kay had an article in the Financial Times earlier in the week, and this seems to have caused quite a ripple around the blogsphere (Eurozone Watch, Economonitor, Claus Vistesen at Alpha Sources). The article was about whether or not it was technically possible for Italy to leave the Eurozone. (Update: Sebastian has a fresh post over at Eurozone Watch Blog continuing the discussion).
John Kay’s conclusion, and it is supported by a very reasoned commentary by Sebastien Dullien at Eurozone Watch Blog (welcome Sebastain and Daniela), is that there is no in-principle technical difficulty in exit. The most authoritative piece of work on this topic that I know of comes from Harvard International financial law specialist Hal Scott. The paper was written back in 1998, and was provocatively entitled “When the Euro Falls Apart“. Despite the title the paper is a tightly reasoned piece of work whose main conclusion is that not only is euro-exit technically perfectly feasibe, in fact the mechanisms which would make this possible were incorporated from the start (in particular keeping independent central banks with their own reserves). I think those who were able to think clearly back then – and were able to use some emotional intelligence – were always aware that there were question marks over Italy’s ability to go the distance.
So the problem is not a technical one. But as John Kay indicates it *is* a political one:
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I’ll keep this brief since there are some excellent guest posts just a little bit further on down the page just waiting for you to read and comment on. I’m not sure whether this is more about form or content, but the UN has a supremely interesting and readable report out today, as part of its State of the World Population programme, entitled A Passage to Hope, Women and International Migration, and whatsmore the report is presented in an extremely blog-like format, as I say highly readable and with the content readily available. And as if that wasn’t enough, the ‘traditionalist’ Financial Times (traditionalist in terms of content, not in terms of format) actually has a hyper-link to the report itself inside its article (bravo FT!). People often ask what kind of importance and influence blogs have, well sometimes I feel you only have to cast your eyes around a little bit.
On the substance front the contents of the report are obviously very relevant to our recent debate about Sub-Saharan migration to Spain. Indeed on the SotWP homepage you can find a link to a fascinating first person account by a Burkinan migrant (Adama) of his convoluted 3 year journey up through Mali, Algeria and Morocco, before finally reaching Spain via the Canary Islands. Clearly in migration terms people like Adama are the pioneers (anthropologists tend to call them the ‘heroes’, those who blaze the trail) who struggle against all adversity to find land and establish themselves (and tragically many do not make it all the way). What the arrival of Adama means is that many more will inevitably come behind, following a network logic which I have attempted to describe in the previous post.
But the new UN report isn’t about Adama, it is about the relatively new phenomenon of female-lead migration. Obviously the report highlights the situation of sex workers et al, but I would like to underline the fact, which is absolutely evident here in Spain, that the welfare services in Southern Europe at least simply cannot handle the rapid population ageing which is taking place without the massive arrival of female care-workers from outside the EU. The later economic development of Southern Europe and the comparative underdevelopment (not to say virtual non-existence in many cases) of institutional care make this inevitable.
One last thing while I am here, we have often talked about the economic growth imbalances which comparatively small migratory movements are causing between and within countries. The outward migration of skilled and highly educated workers from Germany is one such case, while the regional tensions which might arise inside Spain is another. Well today Randy McDonald has a timely and very interesting post about how oil revenues and subsequent economic growth differential in Alberta have produced a migration and fertility phenomenon which may well change the face of Canadian politics as a linguistic divide becomes a growth-model and socio-political one. Finally (the last thing after the last) anyone interested in looking into earlier European ties with Senegal (now being renewed) might like to glance at this link that Randy sent me on Senegalese participation in the European revolution of 1848, or read about the fate of one group of Senegalese soldiers who fought on the allied side in WWII, as described by Senegalese director Sembène Ousmane in his film Camp de Thiaroye (my input). And for those who still want to ask what all these Senegalese may have to offer the future Europe we are collectively building, maybe I could recommend the little known but excellent work of the Senegalese group Orchestra Baobab.
Our next anniversary guest post is from the estimable Mark Thoma.
The Fed and the ECB have different economic outlooks for the U.S. and European economies. For instance, the Financial Times reports:
Fed and ECB diverge on economic outlook, by Chris Giles and Ralph Atkins, Financial Times: The Federal Reserve and the European Central Bank painted contrasting pictures of the US and European economies… Together, the statement by Jean-Claude Trichet, ECB president, and the speech by Mr Bernanke indicated that European interest rates were likely to rise while there was no urgency for further US rate rises.
Mr Bernanke gave an optimistic assessment of the US economy’s ability to continue rapid economic growth without triggering further inflationary pressures. … Across the Atlantic, Mr Trichet announced big upward revisions to the ECB’s inflation forecasts … and called for “strong vigilance” to defend price stability – code words used to signal an interest rate increase in early October. … Mr Trichet’s comments followed the unexpected strength of the eurozone recovery in the second quarter, and ECB fears about the impact on inflation
in 2007… Eurozone consumers’ fears about inflation increased in August to the highest level since the introduction of euro notes and coins in 2002…
An unlikely Helen, Spain’s deputy prime minister, Maria Teresa Fernandez de la Vega, that’s for sure. Yet outside a few thousand years difference in timing the two seem to have been cut out for one and the same the same historical role: urging the boats to go back. Indeed the only thing which really separates them might be the magnitude of the problem to hand, since Coalición Canaria president Paulino Rivero suggested this weekend that what might be involved were not a mere 1,000 ships, but anything between 10,000 and 15,000 currently being built along the Mauritanian and Senegalese coastlines.
Joking aside this post is about tragedy, a human tragedy. According to the NGOs who are involved some 3,000 people have already died in attempting to make the hazardous crossing, a crossing which was actually completed over this weekend by a record 1,200 people in 36 hours.
As well as tragedy the post is also about folly, the folly of those economists who think low fertility isn’t an important economic issue. This opinion was recently expressed by respected US economist Greg Mankiw, (on his blog) who described the very idea that it might be as ‘wrong headed’ and, to boot, suggested that a poll of the world’s top ten economists would draw a blank on names who thought that low fertility was among Europe’s major economic problems. I am sure Mankiw is right about the poll, and this is why I use the expression ‘folly’. So what do I mean?
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After the Russian gas showdown with Ukraine, the Turkmen gas showdown with Russia. Two can play at that game, it seems. No doubt a lot of this is motivated, like the Ukraine crisis, by the decision makers’ own corruption interests in their Austrian, Swiss or God knows where nominee companies and numbered accounts. No doubt the futility of refusing to sell one’s only product will be apparent soon enough.
But it does point up something-first of all, despite the apparent ebbing of US influence in central Asia (airbase agreements being allowed to lapse, etc), the ‘Stans are very far from a calm hinterland for Russian energy geopolitics. Another thing is that the wider version of this politics – the Shanghai Cooperation Organisation, aka “OPEC with Bombs” or the Dictators’ Club if you want to sound Hollywood – might not be as stable as its creators would like to believe. This cuts both ways.
One view of the SCO’s future is that of a gas and oil-empowered alliance of Russia, China, central Asia and maybe Iran, or rather, of their elites. Dedicated to staying that way. It’s not a nice thought, and is certainly one that should inform the debate about the British nuclear deterrent. Another version of it is as a club of toughminded realpolitiker dedicated to keeping the jihadis away from the pipelines, and in the near future the railways. Bolshy independence within it could weaken both these scenarios, although (given the traditional Russian and Chinese approach to central Asian Muslims) that might be quite a good thing.
Time is a fascinating concept. Today we learn that, according to the Oxford English Dictionary, ‘time’ is top noun in use terms in the English language. Interesting statistic that, especially as time is such an integral component in our decision making process.
Also in today’s news we learn from Dr. Kunio Kitamura of the Japan Family Planning Association that “”Japanese people simply aren’t having sex”.
Now why should these two little details be interesting, and what connection could there be between them?
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There is not much market for reviews of books published almost a decade and a half ago, so without further ado, my thoughts on The Prize, by Daniel Yergin. This evaluation is overdue because I started reading the book when I bought it, back in 1997. I put it down around page 400 (which is a little more than halfway), so this review is likely, very likely, to be stronger on the second half of the book.
Yergin’s subtitle is The Epic Quest for Oil, Money & Power, which gives both theme and thesis. The title, if I am remembering an early part of the book correctly, comes from a statement made about oil by Winston Churchill: “The prize was mastery itself.” The argument is that understanding oil is central to understanding the twentieth century and, by extension, the world today. To complaints that the war in Iraq is “all about oil,” the only proper answer is “Of course.” The last century’s major conflicts, and many of its smaller ones, were driven by oil, determined by oil, or both. Without an understanding of oil, much of the period will remain opaque.
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When I lived in Vienna, in 2001-2002, I lived in the 11th District, Simmering, a roughish working-class suburb struck through with railway lines and motorway spurs. Specifically, I lived in one of the four huge brick gasometers of the former city gasworks, once Europe’s biggest, now redeveloped as a mixture of shops, flats and a concert hall.
One thing that cheered me, looking at the dire OVP-FPO government with its mixture of dishonest hacks and barely-contained racist scum, was that surely this provincialism was on the way out. With the enlargement of the EU, not only did Austria stand to make huge economic gains, but surely it would liven up a bit?
There was at least some evidence of change. Around the 11. Bezirk, huge infrastructure projects were going on. The railyards were being enlarged, all kinds of commercial property being built, new terminal buildings at the airport..everyone was looking forward to a good old fashioned concrete binge.
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Remember this post, about Sweden’s new year’s resolution to give up oil by 2020?
According to Jeremy Faludi at Worldchanging.com, it might not be as difficult as you think.
For example, currently, 6% of Europe’s electricity generation is from renewable sources. If they wanted it to be 100% by 2025, they should expand renewable energy generation by about 15% per year, every year, compared to other power sources. (This does not mean 6% now, 21% next year, 36% the year after, etc. It only means 6% now, 6.9% next year, 8% the year after, etc.) This sounds small, and in fact is less ambitious than their current plan to grow renewables from 6% to 12% by 2010. That would require increasing renewables’ share by 17% per year. But if Europe kept growing its percentage of renewables by 15% per year until 2025, they would be at 100% green power. Perhaps such a policy would be both more ambitious and easier to achieve.
Who’s in?