In case you were wondering about the Portuguese economy a recent OECD survey tries to steer you in the direction and although the OECD are undobtedly right in many of their observations the case of Portugal also mirrors how being a member of the Euro does not necessarily help you to achieve those honourful demands of convergence.
Let us see what OECD has to say about Portugal’s economy.
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Overheard in the bar, Paris-Toulouse TGV near Bordeaux…
A French saloon bar bore, who has apparently just returned from a spell abroad, is in the process of berating “national decline” to the barman. Apparently these students are deluded, irresponsible fools, France is in the Middle Ages, and two of the escalators weren’t working at Montparnasse this morning! (Jesus, what would he have made of Oxford Circus tube?) Only la rupture can save us, etc, etc.
But which society had he been experiencing that made him consider France to be stuck in the Middle Ages and to be desperately in need of, ahem, “modernisation” and “reform”? Why, Sweden, of course. A few minutes later, I saw a huge full-page ad in my newspaper taken out by Alcatel to boast of how the takeover of Lucent would give them the world’s biggest laboratories and that they would be spending twice Alcatel’s €2.6bn annual R&D budget in the future.
I can’t imagine a British CEO getting away with that.
Returning to Britain, I see that Peugeot has decided to transfer production of 206s from the Ryton plant in Coventry to somewhere with less job security and lower wages…after all, that’s what we all need, no? Whoops. They are zapping 2,300 workers at Ryton to transfer the work to Mulhouse..
Since the withdrawal of the CPE and the resulting collateral damage to Dominique de Villepin, not to mention Nicolas Sarkozy’s unexpected appearance as a unity figure at the height of the crisis, it’s rapidly being promulgated as conventional wisdom that France “is ungovernable”/refuses to “reform”/cannot be “reformed”. There is only one problem with this discourse, very popular in anglophone leader columns and the like, which is that it’s nonsense.
It’s quite often been raised here on AFOE that the French economy isn’t actually in trouble. Growth, although not great, is ticking along, inflation is controlled, unemployment is higher than the UK but lower than Italy or Germany, and the demographics (as Edward Hugh will no doubt point out) look a lot better than many other countries. Certainly, there’s more youth unemployment than one might like, but almost all the figures for this are wildly misleading. The percentage rate of unemployment in the 15-24 years age group looks scary high, but is actually a very small percentage of that group–because most of them are in education or vocational training of some form and hence not part of the labour force. Unemployment as a percentage of the age group is rather lower than the national rate and not much different from that elsewhere in Europe. (Le Monde ran a useful little chart of this in a supplement yesterday that doesn’t seem to be on the web.) Much – indeed most – of the difference in employment growth between France and the UK in recent years has been accounted for by the UK government going on a hiring binge.
So why the crisis atmosphere? More, as ever, below the fold..
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Corriere della Sera is now reporting that the Italian Senate is breaking 158-156 to the Left, with the lower house going 340-277. The controversial six seats for Italians abroad, introduced by neo-well actually quite-fascist minister (a former member of the Salo Republic’s army) Mirko Tremaglia, seem to have backfired badly on their inventor, with 4 out of 6 going to the Left (German link) and pushing them over the hump.
The Italian right was so keen on those seats that Forza Italia appeared on the overseas ballot as “Italians Abroad with Tremaglia”, which sounds to me at least worryingly like a support group for sufferers of some sort of embarrassing disease. Still, all’s well that ends well, which is probably not what the mafia boss of bosses Bernardo Provenzano is saying right now, having been busted after 40 years on the run. Not that I’m saying there was any connection..
It still might not end well, though, as Berlusconi is babbling about a government of technocrats (German), presumably as a way to stay in office and out of jail a while longer. That could happen either on the basis of a grand coalition (which the Communists are pledged to reject) or alternatively, by somehow dodging the election results.
Market Watch: The MIBTEL has given up some of yesterday’s gains, down 0.67% at 1430 local time..
Well, by 1630 CET today, the Milan stock market had made a very clear judgment on the outcome of the Italian elections – the MIBTEL index being up just under 1 per cent intraday, despite a pasting for Berlusconi’s own Mediaset..down 1.98 per cent at €9.68 a share. Berlusconi’s departure seems welcome indeed.
More exit poll results are spilling out all the time, showing the Left with a working majority in both houses. So far, the only weirdness has been the rather idiosyncratic kerfuffle in the town of Amelia (German link), where a protest led to the removal of crosses from all polling stations on the grounds of constitutionally guaranteed secularism, and predictable moaning from the ex/post/neo/whatever-fascists. A small outbreak of laicisme.
Oh yes, and this…sorry, more German linkage. Seems Jörg Haider, fun-lovin’ pseudofascist scandal monkey and governor of the Austrian province of Kärnten, is going to stand for election in 2009…in Italy, as a candidate for a party advocating Venetian independence. Not just Northern independence as per routine Liga Nord stupidity, but independence for the Most Serene Republic herself.
Strange really. I’ve always thought of Haider as a man out of place, a Mediterranean politician stuck on the wrong side of the Alps with the Germans. His demagoguery, rocambolesque coalition whoring and-to be brutally frank-corruption and barely concealed racism would have fitted beautifully into Silvio Berlusconi’s recent campaign, the municipal authorities of Marbella, or perhaps the intrigues of southern French Gaullism. Carinthia produced far more than its fair share of Nazis, as did many similarly debatable provinces on the edges of the German linguistic sphere, and in a sense his pumped-up nationalism fits the pattern.
Until you remember that he’s not actually from there at all (not far from Linz, actually), and in fact is putting on the overcompensated border nationalism to ingratiate himself with the overcompensated border nationalists. Which fits, too.
But it’s going to be fun to watch.
I have learned via the unlinkable newsfeed site NOS Teletekst that The Netherlands will be opening its borders to East European workers coming from the new EU member states, starting January 1st 2007. Dutch Parliament pushed back the original entry date, May 1st 2006, that was proposed by employers. The big fear is abuse of social security.
In Great Britain, Ireland and Sweden the borders are already open. Portugal, Spain and Finland will follow suit on May 1st while Germany and Austria keep their borders closed for the time being.
In Belgium there was some debate about allowing workers for so-called bottleneck jobs, jobs for which there are hardly any qualified candidates in Belgium.
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Germany – Süddeutsche Zeitung. On March 15 the Ukrainian author
Yuri Andrukhovych was awarded the prize for European
Understanding at the opening ceremony of the Leipzig Book Fair.
In a sensational speech, he attacked EU Commissioner Günter
Verheugen who opposes Ukraine’s entry into the EU. The
newspaper publishes extracts of the speech: “European dialogue
has not taken place,” Andrukhovych notes bitterly, and makes an
appeal to EU countries: “It is crucially important for me that
you help this cursed country, in whose language I write and
address you in. And it wouldn’t be so terribly difficult for
you to help this country. It would simply be a matter of not
saying anything that will kill our hope.”
Hat tip: Eurotopics. Original article unfortunately in pay-per-view. Annoying and expensive pay-per-view at that.
Well the new EU energy plan has been released (and here, and you can also find the actual Commission statement here). The final product is pretty much as the leaks suggested.
As was indicated yesterday, Russia related concerns are central. The FT comments:
Russia supplies a quarter of Europe’s gas needs and the Union’s dependence on the country for energy was illustrated in January when a dispute between Moscow and Kiev disrupted gas deliveries to the EU.
All of this was I think anticipated on this blog back in January when the Gazprom/Ukraine dispute first really broke into the public arena. What wasn’t anticipated was this, and especially the gas related dimension of the Suez/Gaz de France merger.
The major changes taking shape in Europe’s energy sector at present undercut the arguments of those who have long been predicting a gradual break-up of monopolies and the disappearance of the industry’s biggest players. The planned merger of Suez and Gaz de France to counter an offensive by Enel and Veolia and the fight between Gas Natural and E.On for the hand of Endesa make it abundantly clear that concentration remains very much a watchword in the branch and that even powerful old public monopolies like Electricite de France could be forced into marriages with others in future.
None of the reasons trotted out to justify the merger between Suez and Gaz de France, to cite but that operation, dwelled on the future role of Russia in Europe’s energy landscape. True, the Russians aren’t directly involved in any of the operations underway in Western Europe. On further examination, however, Gazprom’s moves in recent months could be seen as justification for the consolidation.
The future Suez/Gaz de France grouping will become the leading buyer and the top supplier of gas in Europe. As such, it will rank as one of Gazprom’s prime customers in the world. That, however, isn’t necessarily good news for Gazprom. In its dealings with such a powerful client the Russian monopoly won’t be able to exert as much pressure upon it as upon a smaller entity, let alone bully it.
I don’t suppose it’s much of a secret that Turkey is one of the main ‘growth tigers’ in the ambit of the EU. The big issue is, I suppose, just how sustainable Turkey’s growth is. Well the World Bank is on the story, and now has a Country Economic Memorandum entitled Promoting Sustained Growth and Convergence with the European Union. As the FT notes:
Turkey needs to create more jobs, get more women into the workforce, and send its children to school for longer if it is to improve its chances of joining the European Union, the World Bank said on Monday.
I absolutely agree, and address the significant inequality between Western Turkey and the Kurdish east, may I add. But I do find myself having the thought, if Turkey does all the things which she is being encouraged to do. If Turkey becomes one of the largest and most dynamic economies in the neighbourhood of the EU, will this really increase the membership chances, or will this only make the resistance in some quarters even stronger?
Thursday’s edition of the International Herald Tribune features an interesting article concerning the recent European rows about state interference in favour of so-called national champions.
Quoting Elie Cohen, the Tribune’s authors – Katrin Bennhold and Graham Bowley – suggest that both the French government’s allegedly new/refound role as M&A consultant in the Suez and Gaz de France deal (to avoid a bid from Italy’s ENEL) as well as the Spanish government’s attempt to thwart a takeover of Endesa, a Spanish utilty by E.ON, the German power corporation, are indicative of a resurgence “nation state” as a political concept in the Europe of the 21st century.
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