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".

Breaking The Seals

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Leafing through the comments on Brussels Gonzo’s last post, I can’t help getting the feeling that this news about Iran’s decision to resume its nuclear programme may well serve to focus our energy debate a little.

Britain yesterday vowed to report Iran to the United Nations Security Council, intensifying diplomatic pressure over Tehran’s nuclear programme.

Responding to Iran’s decision to resume limited uranium enrichment research, Tony Blair, the UK prime minister, told parliament: “I think the first thing to do is to secure agreement for a reference to the Security Council, [if] that is indeed what the allies jointly decide, as I think seems likely.”

British, French and German foreign ministers meeting in Berlin on Thursday are expected to call for an emergency session this month of the International Atomic Energy Agency, the United Nations’s nuclear watchdog, which would then discuss a referral of the dispute to the Security Council.

The Perrenial Euro Story (or lack of it)

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Brad Setser has a post, the perrenial dollar story, which IMHO, has one large and significant ommission: it doesn’t really mention the euro. Personally I don’t really see how you can consider the future evolution of the dollar without taking the euro into account. This realisation provoked a rather long comment from me on Brad’s blog, and it is this comment, in a slightly modifed form, that I am now posting here. (Update: incidentally, I notice that Claus Vistessen has two highly relevant summaries of the great greenback debate (here, and here) which. among other things, serve as an excellent introdiction to the issues involved).
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Not So Quick

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The wheels of Ukranian intrigue, it seems, continue to grind. Yesterday the Ukraine parliament sacked the pro-Orange government of Yuri Yekhanurov, after he was accused of striking a poor deal to end the gas price dispute with Russia. My initial assesment last week that, politically speaking, Russia was the big loser, may have been premature. The Yekhanurov government was forced to resign by an allaince of pro-Russian politicians and supporters of sack pm Yulia Tymoshenko. Clearly there is wheeling and dealing a-plenty going on, and the outcome of the new elections which will now probably be held in March seem hard to predict. But at the very least we now need to wait just a little bit longer to see just who exactly was actually pitching for what.

Some Facts On Turkey And Avian Flu

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As everyone keeps saying, the important thing in circumstances like these is not to panic. But the best defence against panic is information, and after that knowledge. So here goes:

1/. The flu virus was actually first detected in the laboratories of the Turkish Agriculture Ministry on December 9 2005, despite the fact that a ministry statement on the same day denied the existence of the disease in Turkey. So when I implicitly questioned the Turkish Health Ministry version in this post on 2 January it seems I was right to be sceptical.

2/. Nearly 100 people are currently receiving treatment in suspected bird flu cases across Turkey. Since there have only been 142 confirmed cases across the globe since the H5N1 strain was first identified in 2003, the New York Times is undoubtedly right to suggest that the flu is spreading faster than expected.

3/. Elizabeth Rosenthal of the NYT is however not quite right when she says that “the Ankara cases have the most alarming implications because….. it is a relatively well-off area, where it is not the norm for humans and animals to live under one roof. ” This is a misunderstanding, since on the outskirts of Istanbul there is a large Kurdish migrant population, which basically lives in shanty towns, and in shanty towns people often keep their own hens:

Five of eight chickens owned by Ramazan and Muhittin Mentes, living in a shanty house in Ikitelli, Istanbul, reportedly died one by one after the New Year. Members of the Mentes family who ate the remaining three sick birds last Tuesday were taken by ambulance to hospital after neighbors notified officials. Members of the Mentes family immigrated to Istanbul from the Baykan district of Siirt, a southeastern Turkish province, two years ago, and have been earning a living selling lemons in the street markets.

There is a blurring of boundaries here, since many of the people affected may simply live outside the formal limits of Istanbul. However, according to this article:

The Governor of Istanbul has announced quarantine measures will be applied in the areas of Istanbul within a three kilometer radius of regions where poultry samples tested positive to bird flu.

4/ The shanty-town structure is important, since it means the bird/human interface is much larger, and thus the possibility of transmission much greater. The speed of the spread may thus not be a function of virus mutation, but rather of the high ratio of birds to humans in some areas.

There is still no evidence whatever of human/human transmission, although obviously the more human cases there are, the higher the possibility of this ocurring. The most important objective, IMHO, should be to eliminate this outbreak before a more normal human flu strain arrives, since this would provide the ideal host for the kind of mutation that none of us want to see happen.

What Gives in Moldova?

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Only last week, following the Russian decision to turn of Moldova’s gas supply along with Ukraine, Alex and I were asking ourselves the question: whatever happened to Moldova.

Well here comes the answer, from Randy McDonalds Live Journal, they are either growing wine or leaving it seems:

Moldova, as it happens, shares with Georgia a long tradition of wine-growing, something that ensured Moldova a prestigious position in the domestic wine supplies of the former Soviet Union….

Why wouldn’t mass emigration be a perfectly rational solution for Moldovans tired of their poverty? Moldova’s work force might be depleted, true, but the Moldovans abroad enjoy higher living standards while the Moldovans remaining behind benefit from the fact that their country stands just behind Tonga in the percentage of its GDP derived from remittances, in Moldova’s case by the million or so people scattered across the Russian Federation, Romania, Turkey, and southern Europe.

This sort of mass emigration isn’t going to help Moldova develop securely, though. It will help Moldova become a depopulated periphery, true, with its potential work force gone off to work in larger and wealthier countries,
leaving the old behind to tend the country through its collapse, but it won’t help Moldova grow.

Randy also makes a very positive comparison between Estonia’s recent history and what just happened to Ukraine.

Bird Flu In Istanbul

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I don’t think we need to panic, but I do think we need to follow this very closely.

Twenty-one people in the Istanbul area are in hospital amid fears they have bird flu, newspapers said on Monday, raising concern the deadly disease has spread to Turkey’s commercial hub of 12 million people.

Hopefully this outbreak will be contained, but it does seem to be moving very quickly.

Has He Finally Gone Mad?

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Really, when I saw this I had a hard time believing it.

The UK’s case for staying out of Europe’s single currency “is becoming weaker”, European Trade Commissioner Peter Mandelson has argued in a bid to reopen Britain’s euro debate……The British economy has prospered outside of the single currency but with increasing harmonisation in other areas of financial services, the long term case for staying outside is becoming weaker.

Which world is he living in?

Austria Presses On

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Not content with simply being the ‘Energy Presidency’, Austria it seems is hell bent on also moving forward the Consitution issue, even if this is only in the rather tame form of a Brussels debate among Europe’s leaders on the way forward for the new treaty. Actually rather than a constitution per-se, what we may see is the consolidation of the “Cherry Picking” model:

One option is to “cherry pick” key institutional aspects of the text such as the creation of an EU foreign minister or greater openness at councils of ministers.

Words Said In More Than Jest

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This news is surely not as grave as it seems, but the placing under house arrest of the commander of the Spanish Land Forces is hardly to be taken as a trifle. In a move which is reminiscent of the environment surrounding the military coup of 1981., the decision of Defence Minister José Bono to place Lt. Gen. Jose Mena Aguado under house arrest and relieve him of his duties may seem to be a strong one (Aguado was to have resigned in only a few months), as there is really surely no imminent danger of a military coup. It does however reveal just how sensitive the issue is in a country which has seen both civil war and attempted Coup d’Etat. The military is definitely not a welcome participant in the political process here.

What exactly did Aguado do? Well essentially he chose the opportunity of an occassion which is something like army day’ to cite in a speech a clause in the Spanish constitution that calls on the armed forces to intervene if needed to guarantee the unity, independence and sovereignty of Spain, using the example of the proposed reform to the Catalan Statute of Autonomy as an explicit case in point. He did not specify how he thought the armed forces should intervene.

So the rapid response of Bono is both welcome, and unsurprising, what is more surprising – or given recent events, perhaps it isn’t – is the reaction of the opposition Partido Popular:

Only the right wing Popular Party, the most vociferous opponent of the Catalan charter, pulled back from condemning the officer, saying his comments were the logical result of the uncertainty triggered by the charter debate.

So those who claim to be the staunchest defenders of the Spanish constitution turn out to be the most blasé when someone rattles some sabres which might actually threaten its integrity.