Another blackout in Albania

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So Albania had a country-wide blackout yesterday. (N.B., I’m not going to post about Albania every day. It’s just sort of random.) They’ve had plenty of blackouts before, but this was the first one to talke the whole country down. It lasted for several hours. Fortunately, it happened on a warm day, so nobody froze and there don’t seem to have been any deaths. Still, not good.

Albania has problems with electricity, and has had since… well, pretty much always. Communist dictator Enver Hoxha tried to electrify the whole country, but he did it in a really slapdash way, with generators, equipment and networks ranging from ramshackle to crappy. The country gets all its electrity from Communist-era hydropower plants; hydropower is clean and all that, but the generators are old and in need of constant repair and a season of bad rain (common in Albania) can turn the lights off.
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Kosovo, Kosovo, blah blah blah

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So Kosovo continues to creep — soooo slowly — towards some sort of independence.

Serbia is having a Presidential election this weekend, with a runoff two weeks later. There’s a tacit agreement that nothing should happen before then… the assumption being that Kosovar independence might tip the balance between the incumbent President (moderate and basically decent Boris Tadic) and his challenger (odious populist-nationalist Tomislav Nikolic).

Serbian Prime Minister Kostunica — who, honestly, seems to be getting dumber and more stubborn with each passing year — has said that if the EU sends a mission to Kosovo, Serbia won’t sign a Stabilization and Association agreement with the EU. Brussels has said it will wait a bit (i.e., until after the election). I can see the case for that, but once the election is over… well, this strikes me as the sort of bluff that’s crying out to be called. “Oh, we won’t take the next step towards EU candidacy!” “Fine… don’t.”
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Oil in Albania

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Just ran across this interesting report on possible new oil reserves in… Albania.

Gustavson assigns 2.987 billion barrels with 3.014 trillion cubic feet of associated gas as the P50 prospective oil resources in its oil with associated gas case. Gustavson notes that because of the depth it is possible that the prospects will hold natural gas. In its oil with a gas cap case Gustavson calculates the prospective resources to total 1.4 billion barrels of light oil and 15 trillion cubic feet of natural gas. Gustavson estimates that in the event only gas is present the P50 prospective resource is 28 trillion cubic feet of natural gas.

Gustavson is a major petroleum engineering firm, so this should be taken seriously.

Just under 3 billion barrels, of which 1.4 bn is the easy-to-refine light oil: how much is that? Well, by way of comparison, Saudi Arabia has 260 billion barrels of proven reserves, and Mexico has 12 billion. So this is not exactly a new Caspian Sea. Albania won’t be joining OPEC. On the other hand, it’s not chump change either.

And the natural gas is nice too — 15 trillion cubic feet is enough to make it worth running a pipeline north to Central Europe. In the next decade, the Swiss and Germans may be heating their homes in part with Albanian gas. It’s not going to eliminate Europe’s reliance on Russian hydrocarbon, or even much reduce it. But it’ll help a bit.

Albania already has some modest oil fields — enough to supply about half the local energy needs. Fortunately for Albania, this hasn’t resulted in massive local subsidies; oil there costs only a bit less than elsewhere in the region. (I say “fortunately” because if it had subsidies, they’d now be impossible to get rid of.) It also has a couple of refineries, so it would be able to capture that much more value before sending the oil along.

The fields are at least three years away from exploitation, and probably more. So Albania will go through another election cycle, and will have some time to get ready. It will need to. While the amount of money involved is modest on the scale of global or even European oil transactions, it’s pretty big in an Albanian context.

A Big Hand for Slovenia!

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Liberation operates a clutch of good blogs; as well as AFOE Satin Pajama nominee Jean Quatremer’s Coulisses de Bruxelles, which everyone knows, there’s also an absolutely cracking blog on French and European national security issues.

They point out here that Slovenia, which took over as holder of the EU presidency on the 1st of January, is militarily the tiniest of states, with a total of 7,349 men in arms, one ship, a dozen Pilatus turboprop planes and 4 Cougar helicopters. It’s got to be one of the few good points about the rotating presidency that it is unrivalled in its ability to distribute power on the international stage to states this small and otherwise unknown.

On the other hand, though, as Secret Defense also points out, the EU is still struggling to put together the promised peacekeeping mission to Chad. The problems are essentially that the member states are not forking out to provide enough support helicopters and tactical transport aircraft to support the force in part of the world with essentially no infrastructure. There is not really a shortage of choppers; even Slovenia has four, right? However, they are one of those assets which is always in short supply; national armies are very unwilling to part with them.

The UK, meanwhile, is faced with a highly helivorous commitment in Afghanistan which has led it to buy Merlins from Denmark and Portugal in order to form another Naval helicopter squadron. It’s hard to see a specifically European solution to this; it certainly seems sensible that countries like Slovenia might contribute cash (as they will soon be a net contributor) rather than maintain a micro-air force, but this is always going to be a hard sell. There’s also an argument that dispersing these capabilities among smaller states means they will be more available for EU tasks; Austria isn’t likely to invade Iraq. What say the comments?

And you thought I was joking…

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Ha. You thought this was an exercise in strategic trolling. Think again; the French Navy’s helicopter carrier Jeanne d’Arc pulled into New York on the 28th for a port call, and to deliver a consignment of books for schools in New Orleans. (French ones, naturally.) Meanwhile, Rudy Giuliani’s primary campaign took a misstep when he badly misjudged his core constituency…

«Un sondage montre que 67 % des Américains pensent que le pays est sur la mauvaise voie…», annonce Rudolph Giuliani à une centaine de supporteurs réunis dans un petit restaurant de Hampton, dans le New Hampshire. Costume noir rayé, cravate rouge, l’ex-maire de New York en campagne pour la Maison Blanche balaie d’un regard contrarié la foule trop éparse. «Connaissez-vous un autre pays qui soit plus mal en point que ça ?» «La France !» lance un militant arborant un macaron «Rudy for president», aussitôt approuvé par l’assistance. «Pas du tout !» bondit Giuliani. «Nicolas Sarkozy a écrit un livre excellent sur son programme, qu’il met en œuvre en ce moment», rétorque-t-il à son auditoire un peu confondu.

I’m not sure which is funnier – Giuliani trying to push France as an example to his war-crazed freedom fries base (this is the guy who hired Dan Senor and Norman Podhoretz, mark) or the notion that Sarko is still new, revolutionary or exciting.

I spent enough time on this blog trying to dispel the myth of “Sarkozy, France’s Margaret Thatcher” that iit’s wearying to repeat any of it; but essentially all the media beyond France, and much of it within France, got him completely, embarrassingly wrong. Rather than offering a dramatic ideological break, Sarko is much better understood as a Blair or Berlusconi figure; heavily reliant on a dominant media owner (his own media for Berlusconi; Murdoch’s for Blair; Lagardere and the wave of late-Chirac appointments at France Televisions for Sarkozy), wrapping a fundamentally conservative message in the cult of newness and business style. Security, property prices, and TV.

It’s like Chirac with more caffeine. This is unlikely to change much; the long-awaited ruck with the Left over special pension provisions has resulted in the issue being punted to tripartite negotiations with business and the unions, and the flagship economic policy (introducing mortgage tax relief) was derailed by the courts. Although it’s still theoretically on the agenda, nobody is now expecting a property boom any time soon.

What Sarko is probably worrying about is more that his fiscal boost came before the credit crisis; €15bn of tax cuts that fell precisely the wrong side of the cycle.

Emergency operation from Bondi Junction

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A happy new year to all of you, gentle readers. You may have noticed that afoe has experienced a certain number of technical glitches over the last couple of weeks. Unfortunately, no one was able to figure out what exactly caused the problems, CMS, our Javascript, or changes our host made to the php implementation used, since there was no real pattern of occurence, just annoyance. Since I am usually taking care of the technical side of the afoe operations, but currently on a longer trip through Australia, I decided that some emergency operation was needed to keep the boat afloat for the immediate future.

What you are seeing now is the result thereof – it’s a temporary design that will be replaced by the familiar afoe theme as soon as I have figured out what exactly has been causing the problems for both the frontend and the backend themes.

Hungary On The Threshold of a Recession?

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During the Autumn of 2006 we had quite an exchange of opinion on this blog about the future destiny of the Hungarian economy, largely between me and Doug Muir. At the time Doug was relatively optimistic, and I much less so. We nearly even had a bet about whether Hungary would enter recession during 2007, a bet which it turns out I would have lost had I taken Doug up on the challenge, since, although the jury is still out on what happens in the 4th quarter, Hungary may just manage to eke out positive growth right through to years end, but only by a very short nose, as a quick glance at the chart in this post here will reveal.

In truth, at the time I didn’t really know enough about the Hungarian economy to hold a strong opinion, but I was struck by the peculiar and combustible mixture of problems that the country seemed to be facing, with deficits everywhere (both fiscal and current account), private individuals who seemed to be addicted to the contraction of non-local currency debt (largely in Swiss Francs) at a rather alarming rate, a central bank which seemed to be condemned to try and drain the ocean with a teaspoon given the limitations and strong headwinds they faced when trying to implement standard monetary policy in the face of the new rules of financial globalisation, and a population which was falling due to both the low fertility level, and the comparatively low level of male life expectancy which existed (something which complicates enormously the normal policy remedy for ageing workforces of increasing the employment participation rates of the over 60 age group).

Twelve months later, and with a brief public scuffle with the Economist safely under my arm, I have no such doubts. Hungary is heading for recession, whether the dreaded R flag is actually raised in this quarter or the next one, and when it does come, unfortunately, it is unlikely to be a brief and easily brushed-off affair, since all the dials which now point to red indicate that unwinding this particular distortion is likely to be a very slow and painful process. One of the reasons I now feel so confident in making this statement is that some 12 months ago, and hot the heels of my debate with Doug, I founded the Hungary Economy Watch weblog, to study the problem, and while scratching and scratching my head, try to work out just why it is that Hungary is apparently so different from the rest of the EU10, and indeed whether the study of Hungary and its problems might not help us see what might eventually be in store for the rest of the group after the big overheating correction finally takes place. Continue reading →

Too Much Money Chasing Too Few People, Or Russia’s Current Inflation Problem

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Russia has been in the news over the last few days, as much as anything for its recent attempt at “unfair” (the term is the one used by the OCSE) elections. Both Alex and Doug have already commented on this (and Manuel Alvarez has a useful summary of the electoral system and the outcomes it produces here), so in this post, I would like to draw attention to another reason why Russia should be in the news, its growing inflation problem.

As you may, or may not, know, inflation is currently accelerating in Russia, as indeed it is across a large part of Eastern Europe and Central Asia. Regular readers of this blog will know something of the precarious situation which exists in the Baltic States (Latvia, Estonia, Lithuania, a fuller summary of some of the issues arising here can be found in this post). Some, like the Economist, would more or less dismiss the Baltic phenomenon, since the Baltics are, at the end of the day, “pipsqueaks”. But Russia is no pipsqueak, and should Russia be falling victim to some variant or other of the “Baltic syndrome” then this will be no laughing matter (could this be a case of the Baltics sneezing and the global economy catching a cold?). Unfortunately the early warning signs are that it may well be.

The argument I will present is that the sudden acceleration in inflation which we are now witnessing across a whole swathe of emerging economies in Eastern and Central Europe is not simply accidental, or coincidental. Nor is it a simple by-product of collective poor institutional quality, bad government and/or endemic corruption. Of course there is no shortage of all of these, and in varying measure, but there are larger, and in historical terms grander, “big picture” processes at work here, and what is so striking about these countries is that no matter the differences in their policy and institutional mix, under the right circumstances they all go shooting off in the same direction. So what is happening? Continue reading →

The UK’s Toxic Discourse; Miliband and Euro-Defence

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Richard Corbett MEP points to a bizarre feature of British debate on Europe; there is absolutely no certainty as to how anything will be reported or received. David Miliband recently gave a speech at the College of Europe in Bruges in which he stated that it was undesirable that the EU states’ deployable armed forces amounted to less than 100,000 men out of something like two million under arms in total.

(It’s a pity he still won’t answer the damn questions about Iraqi employees.)

The Daily Express, reliably insane under the ownership of porn king Richard Desmond, claimed he had a “project for the Islamification of Europe”. This is because he thinks the single market should eventually include North Africa; apparently the Express has forgotten that it demanded the UK should impose restrictions on the movement of labour, like France and Germany did, when Poland joined the EU.

The Daily Mail thought he was planning a “new EU empire”. The Independent and sometimes the Guardian thought he was diminishing the EU; the Guardian also separately praised the speech, thus scooping the pot for consistency.

What is this accusation of “diminishing” the EU (which Nosemonkey also bought into) based on? Well, it’s not the EU’s defence policy he was criticising, more the fact there isn’t more of one. And the most quoted sentence was that “Europe will be less important in 2050 than it was in 1950” – everyone seems to have read this as Euro-bashing.

However, how could it possibly not be true, given that by then India, China, and probably Brazil will be major world powers? Unless you’re expecting the United States to collapse, the EU will be one among many powers; rather than one of the three world industrial bases Harry Truman spoke of in the 1940s.

Meanwhile, there is real progress being made; when HMS Illustrious does the Royal Navy’s next eastern deployment she may have Italian or Spanish Harrier AV8B aircraft aboard. Granted this tells us more about the ragged state of the British armed forces, but it’s a start; although what the Spanish government will make of the following proposal is anyone’s guess:

The Royal Navy continues to study the idea of making Gibraltar the home of one of the new aircraft carriers.

Plans for a carrier base have been in development for several years. The idea would make Gibraltar home to one of Britain’s two new aircraft carriers along with the support fleet that accompanies it.

The Transition is Over

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“Transition to democracy” was one of the European politics geek’s terms of art ever since 1989; there’s even an AFOE category devoted to transition and accession to the EU. According to Tim Garton Ash, one of his old dissident friends kept a large file of documents under the rubric “TD”; he suggested, wisely, that it ought to have been TC, for “Transition from Communism”. There’s even Transitions Online.

The transition is over. It’s now clear that even the aspiration for it in Russia is dead; the “administrative resources” are now aiming for a one-party Duma. TOL itself is more optimistic; they reckon there is a chance for a significant Communist revival, which would at least mean the opposition was a real, existing political party. However, who can do anything but laugh at the thought of e-voting in Russia? E-voting everywhere else in the world has been bad enough, and its well-publicised fiascos will deaden any criticism of Russia’s version.

It’s the end of an era. Earlier this week, I watched a BBC documentary about the shutdown of the BBC World Service’s programmes in Central and Eastern Europe; a whole microculture of Polish and Bulgarian broadcasters in West London signing off. They, of course, can claim that it’s mission accomplished, especially as the Kazcynski Kidz lost the elections.

The next point to watch here is the fate of the OSCE, and specifically its office of democratic institutions and human rights; Putin has promised to “reform” it. (As you know, Bob, AFOE hates the word “reform”.) It should be pretty clear what “reform” will consist of; a dictators’ club veto on publishing anything critical. This is something that badly wants watching, as I doubt there is much political will in the West to keep it going.

If we want to take the EU as a magnet for democracy, peace, and other good stuff – basic norms of civilised behaviour – ODIHR needs either support, or else to be transferred into the competence of the European Union, safe from post-Soviet vetoes or US fiddling.