“Italy will do all it has to in order to respect the Maastricht paramters…….”we’ve never deliberately aimed at exceeding the 3pct ratio. The fact that this may be happening now is merely due to the state of the economy”.
EU Policies minister Giorgio La Malfa
Category Archives: A Few Euros More
Euro Under Pressure
The euro continues its fall against the dollar today after yet another opinion poll showed French opposition to the European Union constitution continues to strengthen before Sunday’s referendum. Against the dollar, the euro fell to $1.2545 at 8:33 a.m. in London, from $1.2601 late yesterday in New York. The euro wasn’t exactly strengthened by the fact that Sarkozy had to deny a reprot that he had already informed Chirac that the vote was lost.
In itself this decline – in fact the euro has fallen against the dollar by 7.9% so far this year – is relatively benign, and may even be beneficial for hard pressed exporters. Mathew Lynn provides a reasonably summary of the issues here.
The problem is that there are a confluence of problems – the constitution, the absence of growth, elections in Germany, Italy and Portugal and the Stability and Growth pact, and now, divisions and lack of solidity in the ECB. The danger is that uncertainty among politicians following from a ‘no’ hangover, could be just what it takes to turn a benign slide into a run.
Erdogan, no champion of free speeech
The owner of a satirical magazine sued for publishing drawings of Prime Minister Recep Tayyip Erdogan’s head on the bodies of animals accused the premier of intolerance on the opening day of his trial Tuesday.
Erdogan has done things like this for a while now, but I haven’t seen any mention of it in the western media. I only learned of it because I read The Comics Reporter by Tom Spurgeon.
This is of course not the only thing wrong with Turkish democracy. They’ve made significant progress in the last years, but it’s not certain they’ll be sufficiently democratic in a decade or whenever negotions will end.
Erdogan has in the past presented himself as a champion of free speech, frequently alluding to the four-month jail term he served in 1999 for reciting what the courts deemed an inflammatory poem.
Last year a court also ordered the left-wing newspaper Evrensel to pay 10,000 new Turkish lira (US$8,000/-6,000) for a cartoon which portrayed Erdogan as a horse being ridden by one of his advisers.
Earlier this year, he sued an 80-year old veteran journalist Fikret Otyam who criticized government attempts to criminalize adultery by saying the premier had reduced politics to the “level of the crotch,” seeking 5,000 new Turkish lira (US$3,200/-2,850) in compensation.
Blog Roundup
Brad Plumer on the relation between the size of government and growth, and an irony.
Henry Farrell on why he’s more optimistic than he has been in a long time about the European experiment.
Laura Rozen prints native readers thoughts on the referendums in France and Belgium.
Eulogist on the EU and the constitution.
Col Lounsbury on why he’s hoping for a non. (It’s much less interesting than his usual fare, but it gave me an opportunity to link to him.)
Across The Atlantic
Brad Delong has a post on the Euro, and Dave at Macroblog has a couple of relevant posts (and here) . In particular he has an extended extract from the Martin Wolfe article on the Euro and Italy, plus he reproduces a useful graphic showing how ‘sovereign spreads’ in Italy Greece and Portugal declined dramatically with entry in EMU.
Immigration
Last week, the Swedish finance minister said that we should consider allowing immigration of labor. (Link in Swedish) This has long been demanded by the right-wing opposition, but the Social Democrats were against it, partly because of opposition from the unions. This is just a trial baloon, not a shift in policy, and is unlikely to lead to anything i the short run. In any event the opposition is favored to win the 2006 elections.
Sweden is very much the odd man out here, no?
Ankara Steps Up To The Plate
This is a very intelligent move:
Between the rock of the French and Dutch referenda and the hard place of the looming early elections in Germany, Turkey has reiterated its determination to seek full EU membership. Ankara has also named its chief EU negotiator.
Turkey’s 38-year-old chief EU negotiator Ali Babacan is a founding member of the ruling Justice and Development Party (AKP) who believes that there is no slowdown in Ankara’s reforms, notwithstanding that “political reforms, unlike economic reforms, do need some adjustment time to change the mental framework of the people”. In an interview with Reuters a few days prior to his appointment on 24 May, Babacan said that Turkey had no reason to fear from the referendum in France provided that Ankara stayed calm, pursued its own reform agenda and met all EU conditions for opening accession negotiations on 3 October 2005. He has said that he had “no solid reason” to believe that the scheduled 3 October launch of accession talks would be in jeopardy.
Handling matters this way throws all the pressure back on the EU. “We are ready to negotiate, now lets get on with it”.
Well Here’s One More Reason ….
Well here’s one more reason some people might have for wanting Turkey as an eventual member of the EU:
It is 42 inches wide, 1,090 miles long and is intended to save the West from relying on Middle Eastern oil. Nothing has been allowed to stand in its way – and it finally opens today…
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Advantages Of Trade With China
I remember it was not so long ago that people imagined China was so, so far away. Now this kind of news is almost daily.
“Media and publishing group Bertelsmann on Tuesday announced the first big Sino-foreign wholesale book distribution business in China, as overseas investors seek new ways to get access to the country’s book-sales market.
Bertelsmann’s DirectGroup said it had set up a joint venture with Liaoning Publishing Group worth Rmb30m ($3.6m), with the Chinese group controlling 51 per cent“.
Martin Wolf On Italy
The ever readable Martin Wolf has been writing in the FT on Italy:
“Let us think the unthinkable: could the eurozone disintegrate? The answer is yes. Disappearance of the zone as a whole seems hugely unlikely, so long as the commitment to the European project survives. But the exit of one (or more) members, a sovereign default or both is not at all inconceivable.”