Riding The Euromed

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I used to think that Euromed was simply the name of a train which rides the Barcelona-Valencia run. I was wrong. It is also the name colloquially being given to the Euro-Mediterranean Partnership (aka the Barcelona Process) which was infact launched in Barcelona in 1995. As the blurb tells us, the Euro-Mediterranean Partnership comprises 35 members: 25 EU Member States and 10 Mediterranean Partners (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia and Turkey). In addition Libya has observer status since 1999.

Well, the parties are back in Barcelona this weekend, and of course the meet has been getting a fair amount of press coverage.
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What A Surprise!

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The results of the latest GfK’s consumer confidence survey are just in. The results are hardly a surprise. (Btw there is a good discussion of consumption in Germany in this post and comments):

Consumer confidence in Germany, Europe’s largest economy, fell for a second month in three as Chancellor Angela Merkel’s government decided to raise sales tax.

GfK’s confidence index, based on a November survey of about 2,000 people that aims to forecast household spending one month ahead, fell to 3.1 from last month’s revised 3.3 reading, the Nuremberg-based market-research company said in an e-mailed statement today. GfK reiterated its forecast that private consumption won’t increase more than 0.2 percent this year.

Higher energy costs are leaving German shoppers with less money to spend in the holiday season while the prospect of a sales tax increase and an 11.6 percent jobless rate dent sentiment. With the European Central Bank poised to raise interest rates as soon as this week, increased borrowing costs will also crimp spending.

Incidentally Wolfgang Munchau in the FT today states that the recent announcement by Jean-Claude Trichet that the ECB was going to raise eurozone rates “must rank as one of the most bizarre monetary policy decisions of recent times”!

Who am I to disagree.

Much Ado About Nothing?

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The European Commission’s has just published the latest set of EU trade trade figures. Among the surprising details are that overall EU textiles imports were little changed. China textile importas, of course, rose – by 40% – but this was offset by a decline in 54.4% (from Burma) and 41.4% from the Philippines, South Korea, Thailand, Pakistan and Bangladesh also “saw significant falls, by 28.6 per cent, 15.1 per cent, 16.3 per cent and 9.3 per cent respectively”. (all data in value terms and for the first first eight months of the year). As the FT notes the numbers:

“are likely to confirm fears that developing countries are among the main losers after last January’s worldwide removal of textiles quotas.They have struggled to keep up with China’s large and modern clothing production facilities in a liberalised trading environment

“.

One To Watch in Russia

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Russia’s by now well known demographic problems are not, IMHO, going to leave us in peace, the danger is always going to be there of a nasty political evolution which we will in the end have to sit up and take notice of. One of the many possibilities seems to take the form of the Rodina party which Neil Buckley and Arkady Ostrovsky write about in the FT today:

A blonde, Slav-like woman pushes a pram over the rubbish. Then two respectable-looking men arrive. One is Dmitry Rogozin, leader of the nationalist Rodina (Moth- erland) party. They order the men to pick up the litter, while Mr Rogozin’s companion asks menacingly, “Do you understand the Russian language?” On the screen, the slogan appears: “Let’s rid our city of rubbish.”

So runs a television advertisement for Rodina that may have got Russia’s fastest-growing political party banned from elections to the Moscow city parliament next Sunday. The city court ruled this weekend that Rodina’s advertisement incited ethnic hatred and the party should be struck off the ballot. Mr Rogozin is appealing to the supreme court.

The advertisement has been central to Rodina’s campaign for the Moscow parliament poll, the biggest test of its popularity since it unexpectedly won 9 per cent of the vote in national parliamentary elections in 2003.

Remember Me When I’m Gone

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Just when he’s left the FT concludes that Schroder’s labour market reforms are in fact working. It is perhaps worth bearing in mind that although the German economy is producing a lot of jobs, a very high proportion of these are temporary.

Controversial labour market reforms introduced in Germany by Gerhard Schröder in 2004 are showing results, according to data published less than a week after he stood down as chancellor…..The state-run BA employment service in Nüremberg said the total number of job placements by employment offices across Germany would exceed 1m this year, an increase from 496,000 in 2004. The average length of unemployment had fallen from 22 months a year ago to about 21 months today – a downward trend that was set to continue next year.

Revolting High Rises

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Revolting High Rises

Le Corbusier called houses “machines for living.” France’s housing projects, as we now know, became machines for alienation. In theory, the cause of this alienation is some mix of the buildings themselves and the way they’re joined to the city. But in practice, the most effective urban renewal has tended to focus on the buildings. It focuses on the buildings by razing them.

Best dead

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You will likely have heard by now that George Best — Northern Ireland international, star of Manchester United and, later, player for a long list of increasingly obscure clubs — has died. Best was a weak and pitiable alcoholic, and also one of the greatest footballers ever to grace a pitch. My own thoughts on the matter at T6I.

Italian Pension Reform

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The Italian government finally agreed the details of the new penison reform yesterday. Curiously, it does not need to go to parliament for approval. Getting government agreement had not been without difficulty, and again interestingly enough it won’t come into effect for two years, giving next year’s incoming government plenty of time to change its mind.

The reform aims to launch a second pillar of private and occupational schemes to flank state pensions, using money which companies currently hold on behalf of their workers in a fund which employees receive when they leave their job. It will come into force at the same time as a reform of the state pension system which raises the retirement age to 60 from 57. Both measures could be changed or scrapped between now and 2008 by whoever wins the 2006 general election.

Investment Dearth?

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The idea that there was a global savings glut now having gone out of fashion, some are presently arguing that what we have is an investment dearth (my own view is that these two effectively mean the same thing, since the issue is a relational one). More evidence for this investment dearth hypothesis comes today from the UK.

UK Business investment grew sluggishly in the third quarter, official figures showed, confirming survey evidence that British-based companies are cautious about capital spending even though profit levels are high.

As the FT also notes:

Just as in other European countries, companies have decided to save most of the money they have been making rather than risk investment in new opportunities to generate profit in the future. The reluctance of companies to invest when interest rates are low and the return on the existing capital stock is high has puzzled economists for some time.

Dave Altig had a piece earlier in the week about the BoE rate decision wher he tries to put a brave face on the UK data. This investment news is another little bucket of cold water for the upside optimists. I’m more or less neutral here. The monetary policy committee intimate that the weakening of investment intentions “may also reflect uncertainty about the near-term outlook for the economy in the face of sluggish consumer spending and higher energy prices”. Dave concludes that “Perhaps the uncertainty will lift sooner than later”, and I agree, I’m sure it will: I’m just not sure which way the resolution of the quandry will lead us.