Author Archives: Edward Hugh

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".

Dutch Referendum: Euro-scepticism

Posted on by

Dutch Finance Minister Gerrit Zalm is in the news again. Last time I read about him it was because he had started a weblog. This time the issue is different: he describes himself as being “totally fed up” with the fact the Dutch public thinks that it was effectively robbed by the way the euro was introduced.

Behind this ‘frustration’ lies a startk reality: the controversy over the valuation of the the guilder at the time of monetary union is one of the key factors fuelling the ‘no’camp in the forthcoming referendum.
Continue reading →

Turkish Accession Talks And The French Vote

Posted on by

People in Turkey are getting nervous. If French voters reject the Consitution Treaty later this month, it will be for a whole string of reasons, none of which necessarily are related to any of the others. Some will vote against the treaty because it is perceived as removing sovereignty too much, others because they feel it leaves too much room for national sovereignty (the ‘social dumping’ debate). But possibly ‘no’ voters hold one view in common: they don’t like the idea of Turkey joining the EU.

Now many of the consequences of a ‘no’ vote – if ‘no’ vote there be – are unforseeable. But one distinct possibility would be that among the items contained in the ‘plan B’ rescue package would be a proposal to review the state of play with the Turkey accession process. This possibility is exercising the mind of Morgan Stanley’s Serhan Cevic no end. Mine to. Full declaration: I support Turkey’s *eventual* membership of the EU.
Continue reading →

EU Fast-Tracks China Textile Dispute

Posted on by

The European Union yesterday issued a final warning to China over its booming textile exports, threatening sanctions against two categories of textiles to prevent ?irreparable harm? to European producers. EU Commissioner Peter Mandelson has proposed emergency talks with China on imports of T-shirts and flax yarn. T-shirts and flax yarn are two of the nine categories of textile imports from China currently under investigation by Brussels following allegations of a surge in exports. Under the emergency talks procedure the normal 60 day WTO procedure is by-passed:

Normally investigations can take up to 60 days, but the procedure allows for this period to be cut short and urgent consultations within the WTO triggered for any product where import surges and the risk of immediate damage to the EU industry are very high. “In view of the seriousness of market disruption in these categories, formal consultations need to begin immediately,” the European Commission said in a statement on Tuesday.

“Only if China does not take effective action will the Commission propose temporary limits or safeguard measures on the growth of Chinese exports in the categories concerned in 2005.”

Under WTO rules, the consultation procedure requires China to remedy the situation by slowing the growth of its exports in these area to the level of the first 12 of the previous 14 months, plus 7.5 per cent.

Does this decision mean people are really getting nervous about the upcoming French constitution referendum? I have a longer post on this topic here.

Uzbekistan Update II

Posted on by

Despite plenty of evidence to the contrary Uzbek government officials continue to dismiss eyewitness reports that soldiers opened fire on civilians during last weeks protests in the eastern town of Andijan.

Not a single civilian was killed by government forces there,? Prosecutor General Rashid Kadyrov said.

Registan notes that Kyrgyzstan has opened a refugee camp in the Jalalabad region: Nathan has more links.

Nigara Khidoyatova, head of the Free Peasants party, says her party has compiled a list of 745 people allegedly killed by government troops in Uzbekistan. She stated her party arrived at the number by speaking to relatives of the dead and that the count was continuing. ie she claims to have names and addresses.

Lyndon has some interesting background at Scraps of Moscow. Reuters’ Dmitry Solovyov is reporting that “Uzbekistan’s government on Wednesday took foreign diplomats to the town where witnesses said troops shot dead hundreds of people but did not show them the actual site of the massacre”.

The report contains a useful description of the visit, and of what the diplomats were able to see:

“Heavily armed special forces accompanied the busloads of visitors as they traveled around the deserted town, where the normally bustling tea houses and kebab shops were empty apart from the police and soldiers patrolling them”.

Condoleezza Rice has called on Uzbekistan to open its society. She is quoted as saying:

” Now, as to the latest events that have just taken place, I do think that we — and we would hope that the government of Uzbekistan — would be very open in understanding what has happened there…Nobody is asking any government to deal with terrorists..That’s not the issue. The issue, though, is that it is a society that needs openness, it needs reform.”

Now maybe I am being slow, but I don’t understand this. Where is the openness in Rice’s own statement?

Spanish Parliament Votes Yes To Talks With ETA

Posted on by

As suggested last week on Afoe, the Spanish parliament yesterday voted ‘yes’ to talks with ETA, if ETA is prepared to lay down its arms.

Spain’s parliament last night gave prime minister Jos? Luis Rodr?guez Zapatero the go-ahead to open negotiations with armed Basque separatist group Eta if it shows it is ready to abandon terrorism.

“The best homage we can pay to the victims of terrorism is to finish with Eta,” Diego L?pez Garrido, spokesman for the ruling Socialists, told parliament. “Eta is weak … and we have to make the most of this weakness.”

The main opposition party, the conservative People’s party, warned Mr Zapatero that his efforts to lure Eta to the negotiating table would backfire.

More Evidence of UK Slowdown

Posted on by

Unemployment continues a slow but steady rise in the UK. More eviedence of the slowing economy?

U.K. jobless claims rose for a third month in April and wage growth eased to the slowest in almost a year amid signs expansion in Europe’s second-largest economy is faltering.

The number of people claiming unemployment benefit rose by 8,100 to 839,400, the Office for National Statistics said in London today. Wages excluding bonuses rose 4.1 percent in the first quarter, down from 4.3 percent in the month-earlier period.

Record levels of employment have helped underpin 51 straight quarters of expansion in the U.K., prompting the Bank of England to raise interest rates to the highest among the Group of Seven industrialized nations. The central bank last week trimmed its economic forecast and said a slowdown in consumer spending has “become more marked,” leading to speculation of a rate cut.

Kapitalismus

Posted on by

In Germany the debate continues. What ever happened to the ‘reform agenda’ I wonder?

German chancellor Gerhard Schröder will next month call for a European initiative to promote public spending on research, set minimum social standards in companies and tighten controls on international financial flows, senior members of his Social Democratic party said on Tuesday.

The plan, discussed at a meeting with leftwing SPD members of parliament at the chancellery last Thursday, is the clearest indication yet that Mr Schr?der is reaching out to critics of capitalism within his party.

Meantime Deutsche Bank Chief Executive Josef Ackermann told a shareholders meeting today that the bank will press ahead with acquisitions and job cuts as it seeks to strengthen its global competitiveness,

With protesters picketing the meeting, Ackermann said the bank was going to stick with plans to cut around 5 percent of its work force ? roughly 1,920 jobs in Germany and 3,280 abroad. Deutsche Bank said in April its net profit rose by 17 percent in the first quarter to 1.1 billion euros ($1.42 billion).

In a clear reference to criticism from SPD chairman Franz M?ntefering, he said: “Niemand – zumindest niemand, den ich kenne – will einen “Kapitalismus pur? und schon gar keinen “Raubtier-Kapitalismus?” – No-one – at least no-one I know wants a ‘pure’ capitalism, and certainly no “robbery-animal capitalism”. Well there you have it, we’re all good men and true. Round II to follow.

French Referendum: No Vote On The Rebound

Posted on by

The ‘No’ campaign seems once more to have regained the lead in the run-up to France’s referendum on May 29, with French voters apparently ignoring all warnings about the damage that would be caused by rejection of Europe’s constitutional treaty.

One explanation for this may be the fact that leading politicians of the left – like Jacques Delors and Laurent Fabius – have given the impression that a ‘no’ outcome would lead to a probable ‘renegotiation’ of the treaty, with an outcome more favourable to French interests. The latest opinion polls show that an increasing proportion of respondents say France could renegotiate a better treaty after a No vote. According to the Ipsos poll cited below, nearly 62 per cent of respondents now hold this opinion.

Confounding pollsters, pundits and politicians alike, public opinion in France has swung back behind a no vote to the new European constitution, say three surveys published yesterday.

Less than two weeks before France’s May 29 referendum on the treaty, the polls by the TNS-Sofres, Ipsos and CSA agencies for Le Monde, Le Figaro and Le Parisien newspapers showed support for the no camp, trailing since the end of April, had bounced back to between 51% and 53%.
TheGuardian

Deficits On The Rise

Posted on by

Things may be about to liven up a bit for Economics Commissioner Joaquim Almunia: it seems probable that the Italian deficit will be nearer 4% than 3% this year, and Portugal may even clock-in something of the order of an incredible 6 to 7%.

The worsening outlook in the two countries will rekindle the debate about whether they should have joined the single currency in 1999.

Germany had strong doubts during the 1990s about whether the economies of the ?Club Med? countries were ready. As part of the currency union, they are denied the traditional escape routes from economic trouble: devaluation or cuts in interest rates.

With their deficits already above the EU’s 3 per cent limit, neither government has scope to cut taxes or raise public spending.

Make no mistake: there’s a real and big problem looming here.