Tag Archives: EU

The Mediterranean Diet?

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This should come as a shock, but somehow I am not exactly surprised. Mediterranean cooking evidently isn’t always as benign and healthy as it seems.

Greece was warned on Thursday that it could face legal action for grossly under-reporting its national deficit and debt figures but was told it would not be ejected from the 12-country eurozone.

Revised figures revealed Greece broke the single currency’s 3 per cent of GDP deficit ceiling every year in the 2000-3 period.

The European Union will launch an inquiry to check the veracity of the figures it provided before 2000, the year Greece qualified to join the single currency.

The scale of the inaccuracies has sent shockwaves across the single currency area, which relies on member states to provide sound economic data.

…………Eurostat, the EU’s statistical arm, could start legal proceedings against Athens for breaching accounting rules.

Greece, however, is unlikely to be ejected from the eurozone, even though there are now doubts about whether it complied with the membership rules before 2000.

The new data revised the Greek 2000 deficit to 4.1 per cent from a prior estimate of 2 per cent.

The 2001 and 2002 deficits now stand at 3.7 per cent compared with 1.4 per cent previously. The 2003 deficit, which had already been revised up in May to 3.2 per cent from 1.7 per cent, is now shown to be even higher – at 4.6 per cent of GDP.

Cost-overruns on the building of venues and transport systems for last month’s Athens Olympics games, estimated at more than ?2.5bn ($3bn, ?1.7bn), contributed to a projected deficit of 5.3 per cent of GDP this year.
Source: Financial Times

It is also worth bearing in mind that the accumulated Greek deficit currently is one of the highest in the EU and stands at around 100% of GDP. The interesting question now is what happens next.

That Yes Vote

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That yes vote on the EU constitution gets to look more precarious by the day:

France’s ratification of the proposed European constitution will look more challenging than ever on Thursday night if Laurent Fabius, a former prime minister and a leading figure in the opposition Socialist party, uses a television interview to call on his supporters to vote ?no? in next year’s referendum.

The poll promises to be the main event in the 2005 political calendar in France and pollsters say Jacques Chirac, the president, has little chance of winning it without socialist support. Mr Fabius is seen as holding the balance of power in determining the party’s position, and is expected to tilt against the constitution.
Source: Financial Times

Time To Smell The Coffee

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You can smell the coffee now: this is the opinion of Morgan Stanley’s Serhan Cevik referring to the nearest thing to an ‘economic miracle’ that we have in or around the EU at the present time:

“It?s time to smell the coffee ? Turkey?s disinflation process is not a temporary phenomenon. Though currency movements play a notable role in driving inflation mechanics of highly dollarised economies, disinflation in Turkey has not been just a by-product of exchange-rate valuation. We believe that it is unfair to take currency appreciation for granted and overlook fundamental factors driving both exchange-rate and inflation dynamics. First, the favourable pass-through effect is a result of fundamental improvements such as a rebalancing of residents? portfolio allocations and productivity-driven export growth. Second, monetary discipline assisted by fiscal consolidation and structural reforms has played a critical part in improving institutional credibility. Third, productivity gains that have resulted in a remarkable drop in unit labour costs help lower the rate of price increases. And last, but not least, economic slack as manifested by the cumulative output gap and labour-market developments has accelerated the pace of disinflation.”

But if this is how things look to some (even if the looking is done not from Turkey but from Serhan’s London window) this is not the way they seem to EU single market commissioner Frits Bolkestein:
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Europe’s ‘Sad Day’?

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“A sad day for trade relations between the US and Europe”. This is how John Disharoon, vice president of the trade committee at the American chamber of commerce to the EU described the decision by the European Union to begin imposing trade sanctions on US goods as of today. Of course, the arguments about why this measure is totally justified (or conversly totally un-justified) will be legion. However, at the end of the day, I can’t help agreeing with the above-mentioned comment. With all the problems we face out there in front of us, with all the dangers of a renascent protectionism which we can clearly see inside the US itself, this, it seems to me, is the last thing we need right now. It wreaks of the worst kind of logic of bureaucratic decision making.
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Let’s Go To Bulgaria

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Actually just after my Chinese visitor dropped by I received a Bulgarian one, my former ‘research assistant’, young Bulgarian anthropologist Yassen Bosev. And what did Yassen want? To tell me to Forget India, Let’s Go To Bulgaria. Only trouble was, I had some bad news for him: India’s minister of Disininvestment and Technology, Arun Shourie, already got there first. Why does everyone think Indian president Kalaam was in Bulgaria on his first overseas visit late last year?
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AIDS in Eastern Europe

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Actually the Scotsman puts it like this: “Enlargement of the European Union in May will bring the world?s fastest-growing area of HIV infection on to the doorstep of the EU, United Nations experts warned today.”

Which pretty much scandalises me: how can you turn a human tragedy into a eurosceptic thing, for gods sake? The problem isn’t either nearer or farther due to the enlargement process: it is simply there. The background to this is that Peter Piot, executive director of UNAids, the UN body with responsibilities for HIV/Aids, has been speaking at the start of a conference today in Dublin, held at the invitation of the Irish EU presidency. Among the preoccupying facts contained in Piot’s speech: as many as one in 100 adults in the eastern European states and their neighbours Ukraine and Russia are infected with HIV , and the numbers are growing fast.

?Of the states who are to join, the Baltic states particularly are affected. Then you have got at the borders Ukraine and Russia, where 1% of all adults are infected.

?What may be more important is that in 10 years? time, the number of people infected with HIV has multiplied by 50. There are now about 1.5 million people living with HIV on the doorstep of the EU.?

Would it be unduly hard-hearted of me to point out that these countries are already facing the most dramatic population crisis in Europe. ‘Sempre plou sobre mullat’ we say in Catalan (it always rains on the wet). Is there nothing we can get right. Couldn’t we try, just this once.
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The Last Foreign Correspondent

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This is really a case of two stories in search of a common theme: a theme, that is, which goes beyond the rather random unifying factor of the work of Shanghai based ‘foreign correspondent’ Fons Tuinstra. In fact both points emerged from browsing his blog.

In the first place we have the problem with the uses and abuses of statistics – an issue which surfaced once more this week with the outrageous use of the carefully crafted 7% Japanese GDP growth number (those looking for a rather more jaundiced – not to say realistic – view on this, could do worse than consult Bloomberg’s ever intelligent William Pesek).

But Fons target this week is not the investor-seeking financial press, but rather his own compatriots, the Dutch politicians, and how they have turned the creative use of statistics into an art form, for, as he says:”Dealing with figures is an art: the Dutch call themselves the Chinese of Europe, for a good reason.”
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