Is Trichet’s Optimism Justified?

Posted on by

Our next anniversary guest post is from the estimable Mark Thoma.

The Fed and the ECB have different economic outlooks for the U.S. and European economies. For instance, the Financial Times reports:

Fed and ECB diverge on economic outlook, by Chris Giles and Ralph Atkins, Financial Times: The Federal Reserve and the European Central Bank painted contrasting pictures of the US and European economies… Together, the statement by Jean-Claude Trichet, ECB president, and the speech by Mr Bernanke indicated that European interest rates were likely to rise while there was no urgency for further US rate rises.
Mr Bernanke gave an optimistic assessment of the US economy’s ability to continue rapid economic growth without triggering further inflationary pressures. … Across the Atlantic, Mr Trichet announced big upward revisions to the ECB’s inflation forecasts … and called for “strong vigilance” to defend price stability – code words used to signal an interest rate increase in early October. … Mr Trichet’s comments followed the unexpected strength of the eurozone recovery in the second quarter, and ECB fears about the impact on inflation
in 2007… Eurozone consumers’ fears about inflation increased in August to the highest level since the introduction of euro notes and coins in 2002…

Continue reading →

A Face That Launched A Thousand Ships

Posted on by

An unlikely Helen, Spain’s deputy prime minister, Maria Teresa Fernandez de la Vega, that’s for sure. Yet outside a few thousand years difference in timing the two seem to have been cut out for one and the same the same historical role: urging the boats to go back. Indeed the only thing which really separates them might be the magnitude of the problem to hand, since Coalición Canaria president Paulino Rivero suggested this weekend that what might be involved were not a mere 1,000 ships, but anything between 10,000 and 15,000 currently being built along the Mauritanian and Senegalese coastlines.

Joking aside this post is about tragedy, a human tragedy. According to the NGOs who are involved some 3,000 people have already died in attempting to make the hazardous crossing, a crossing which was actually completed over this weekend by a record 1,200 people in 36 hours.

As well as tragedy the post is also about folly, the folly of those economists who think low fertility isn’t an important economic issue. This opinion was recently expressed by respected US economist Greg Mankiw, (on his blog) who described the very idea that it might be as ‘wrong headed’ and, to boot, suggested that a poll of the world’s top ten economists would draw a blank on names who thought that low fertility was among Europe’s major economic problems. I am sure Mankiw is right about the poll, and this is why I use the expression ‘folly’. So what do I mean?
Continue reading →

Al-Qaeda Recruits in Egypt

Posted on by

The first in our series of anniversary guest posts comes from the great Praktike, who normally writes for American Footprints.

The number two man in al-Qaeda, the Egyptian doctor Ayman al-Zawahiri, made waves when he announced on August 5th via a taped statement that five members of the Egyptian Islamic Group (EIG) had joined al-Qaeda. Ominously, he implied that they were just the tip of the iceberg. The revelation seemed to confirm what many terrorism analysts have been saying for some time: that the American response to September 11th has radicalized the region and made recruiting an easy task for al-Qaeda. Excerpts of the video, in which Al-Zawahiri appeared with the little-known Mohamed Khalil al-Hekayema, originally aired on the Al-Jazeera satellite channel.
Continue reading →

1..2..3..And They’re Off – The Left

Posted on by

On the other side of French politics, as I promised, the internal conflicts are if anything stronger. To start with the most important ones, the Socialist Party is about to do something quite rare in its history – have a contested primary election. The only other was that of 1995, when Lionel Jospin beat Henri Emmanuelli to succeed Francois Mitterand. Before that, the candidacy normally went to the party’s first secretary, who was usually Mitterand anyway. (Before 1971, when Mitterand set up the modern PS, the various splinter-groups from the old SFIO that made it up of course had their own arrangements.)

Since the disaster of 2002, though, this looks like it’s going to change, chiefly because there’s a strong external candidate. Ségoléne Royal, the head of the Poitou-Charentes regional government, has been campaigning vigorously all year with some success. The success can be measured, in fact, by the frequency with which she is being accused of “Blairism” by the rest of the possible candidates. This looks like being the content-free insult of the campaign, in fact, as could be seen with the PS official quoted by Libération who remarked that he didn’t want Royal to “come back from London and abolish the social security” – after all, everyone knows that the UK provides no social security whatsoever, right?

It would be more accurate to place Royal on the soft-left. (If anyone’s Blairite in this game, it’s Nicolas Sarkozy – this speech is a classic of early Blairite rhetoric circa 1997.) She is no more “neoliberal” than Lionel Jospin was in government, for example, or for that matter Dominique Strauss-Kahn, and is closer to the Greens than some. She is given to vaguely conservative speaking, but it’s harder to discern where a concern for civisme, secularity and Republican values (in the French sense) stops and where a rather stern law-and-order politics begins in a French context.

However, it looks more and more as if the rest of the party is gearing up for an “anti-Blairism”, stop-Sego campaign. And policy doesn’t matter very much in this sense.
Continue reading →

Europe: feudalism and tribes

Posted on by

From The Weekly Standard’s essay The return of the tribes by Ralph Peters (emphasis mine):

Now, in 2006, we see one European state after another enacting protectionist measures to prevent foreign ownership of vital industries (such as yogurt-making). France paused, as hundreds of thousands of its best and brightest protested the creation of new jobs for the less-privileged in a spectacular defense of the ancien régime. And a new German chancellor has called for saving the European project by destroying it–or at least by hewing down the massive bureaucracy in Brussels that alienated the continent. The future of Europe lies not in a cosmopolitan version of the empire of Charlemagne, but in a postmodern version of the feudal fragmentation that succeeded the Frankish empire. Brussels may be the new medieval Rome, its bureaucratic papacy able to pronounce in limited spheres, but there is ever less fear of excommunication.

You know the drill: discuss if you like.

(hat tip)

1..2..3..And They’re Off!!

Posted on by

Well, with the summer party universités d’été done and everyone going back to work, the run-in begins in earnest to the French presidential election. This shows every sign of being very interesting indeed. After all, it’s the biggest direct mandate for any politician in Europe and the second-biggest in the whole democratic world (I exclude Russia because whatever it is, it ain’t democracy), so it ought to be worth watching anyway. This one is especially interesting, though, as everyone has a lot to prove.

The Socialists are desperate to recover from the disaster of 2002 and regain some power. Whether they can do this, and how they do it, is going to be a bellwether for the Left throughout the world. Inside the party, there is a whole world of bitter conflict to work out. The extreme-left is desperately trying to unite, in the hope of capitalising on the victory against the CPE and eventually getting some tangible results from their combined 12-15 per cent of the first round vote. After all, whatever they hoped to achieve, you can be sure that a Chirac-Le Pen runoff wasn’t it.

On the Right, there is an even more savage internal struggle in progress. The blue-eyed boy, Nicolas Sarkozy, is lining up for the final straight with his bid to bring something eerily like Tony Blair to France – free markets and mass surveillance – whilst Prime Minister Dominique de Villepin still hopes to seize the succession to Jacques Chirac. This overlays the old distinction between the Gaullists and the “classical right”. But what’s this?
Continue reading →

Just one more gelato

Posted on by

Two entries in three weeks? It’s surprising we’ve even managed that much. Come on. It’s August. We’re in Europe. We’re all away from the computer and you should be too, enjoying the final hot, sweaty gasps of summer.

But if you just can’t tear yourself away, here are a few tid-bits from my corner of things.
Continue reading →

Art and therapy

Posted on by

Dutch art weblog Suds and Soda tells us about an interview the Dutch publication Vrij Nederland recently conducted with British artist Tracey Emin. The interview is not available online, but the author of Suds and Soda gives us one quote:

Last week I went back to my therapist (Tracey says). I told him how happy I was. Yet, at the same time I was afraid of what that happiness might do to my art. Do you know what he said? “Woman, just go home and be happy!”

Continue reading →