Of Demons and Details.

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Tonight, a French friend sent sent me an email expressing his disappointment about the fact that a Eurodistrict comprising the French (Euro-)city Strasbourg and the German regional authority Kehl, which will be officially created by officials from both parties at a signing ceremony tomorrow afternoon, is falling far short of the enthusiasm it was conceived with (some details by Reuters (in French)).

During the heyday of the latest Franco-German governmental rapprochement in early 2003, Chancellor Schröder and President Chirac signed a declaration calling for new forms of European institutional cooperation. But lacking consistent ideational support from the two governments, the regional authorities were unable to overcome different administrative practices, legal concerns, and – problems to fund a bridge. Thus, they will not establish a new form of supranational institution but rather “just another” council for regional cross-border cooperation. And they won’t get a new bridge.
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Almost a Fistful

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Vicenta, Edward, Tobias, and David (from left to right)Some light Friday afternoon reading, and some faces you may not have seen yet. A month ago, almost exactly two years after the day that will live in infamy, the first afoe meet-up took place in Stockholm.

Despite the fact that not everyone in the fistful could make it to the Swedish capital, it was a great opportunity to discuss the past, present, and future of Europe, the world, blogs in general and afoe in particular. But above all, it was great to finally meet some of the people with whom so many emails were exchanged – a valuable reminder that the blogosphere can not only lead to a meeting of minds, but, in some cases, also to a meeting of entire people.

Growth and Inflation in the UK

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Following-up on my post earlier this week on interest rate policy I see Graham Searjeant has a piece in the Times today arguing that Mervyn King has the balance wrong between fighting inflation and stimulating growth.

In a sense I think that Searjeant is not entirely fair when he says:

Growth has become even more vital to support an ageing population. The Governor may deny responsibility. The rest of us cannot.

Evidently this is the case, but equally I am sure that Mervyn King is well aware of the fact. However since it is long term *sustainable* growth we are talking about here, and since I don’t doubt this is what he (King) is aiming at, even if his efforts, and the reasoning behind them remain obscure (and here I do think we can blame King) I really don’t think Searjeant’s point sticks in the way he wants. The issue is whether short-term growth is being needlessly sacrificed, and if so, to what?

Short-term growth is being sacrificed IMHO to the god of global imbalances, and the campaign to correct them, and it is these, and not inflation, which are King’s real target. (continued).
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The Choke Point

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Well following my speculation yesterday that the suggested de-coupling of the UK rebate issue from agricultural reform might be connected to the implications of the Doha round, news is in today that France last night called for an emergency meeting of European Union ministers to discuss “growing concerns in Paris that Europe will concede too much ground in the Doha round of trade talks“. The FT quotes Mandelson as saying:

“We are rapidly approaching the choke point where the different pieces either fall together or fall apart”

Avian Flu

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It has been confirmed that the variant of avian flu found in Turkey is the H5N1 high pathogenic virus. Obviously on reading this one is caught between a feeling of panic and a desire to stay calm. Frankly the stay calm bit should win out, in all of us. Panic only makes things worse.

Clearly were some of the worst fears to be realised this would be a grave situation, but hopefully they won’t. One key point which needs to be made is that there still isn’t a H5N1 strain that is readily transmitted among humans, hopefully there won’t be, even if this may be hope against hope.

The WHO have an informative update on the Geographical spread of H5N1 avian influenza in birds. If you look at this report from the WHO on the situation in Indonesia (where three people have died) or in Vietnam (where 21 of the 64 cases proved fatal) you will see that even when the virus does cross species it is containable. So while the possibility of a pandemic exists we are not there yet, and possibly never will be. It’s quantifying the *possibly* part that is difficult. Basically I have put this post up in case any one else wants to voice an opinion. Clearly we at Afoe will try and monitor this situation from now on.

UPDATE (by Doug Merrill): Good sense from a biologist on what is likely to be helpful and what not can be found here.

Go West Young Man

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My preocupations about the impact of demographic change on German society are already pretty well known. Well if Germany as a whole has a sizeable problem, the former East German Lande have a huge one. The state-owned KfW development bank project in a report out today (German only unfortunately, an English version of the press release is here) that the while the population of the old West Germany will drop by six percent between 2002 and 2050, that of the six eastern states will decline by a whopping 25%. Not to mention the fact that those who remain are likely to be even older on average than their Western counterparts. As a consequence the available workforce is likely to fall by a staggering 55%.

The issues raised by this research are large and important. Is, for example, East Germany now in irreversible decline? Can this process repeat itself elsewhere (including between rather than within nation states) as younger, more highly skilled and more mobile workers leave ageing and relatively more depressed areas etc?

The issue of migration from East to West Germany been receiving attention for some time now. Frank Heiland in a survey “Trends in East-West German Migration from 1989 to 2002” (follow the link and go to Volume 11 article 7) argues that there have been two waves of East-West migration The first one, 1989-1990, was triggered by the opportunities and uncertainties before the Reunification; the second one, since 1997, coincides with economic stagnation in the East and improving job prospects in the West.
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Turks snubbing arranged marriage with EU?

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The excellent Dutch weblog Sargasso has an entry on Turkish cult novelist Burak Turna, whose latest book The Third World War or Üçüncü Dünya Savasi is turning into a regular best-seller in Turkey. One quote from Turna, taken from the International Herald Tribune:

”Turks are waking up to two facts,” Turna said at a café near Istanbul’s bustling Taksim Square, where he was greeted like a rock star by young fans. “One is that everything told to the Turkish people by EU leaders is lies. Two, that a Muslim country will never get into an EU that doesn’t want us”.

Fair enough. However, in his novel The Third World War Turna acts out Turkish feelings of anti-EU resentment in the following way:

The year is 2010 and the European Union has rejected Turkey. Fascist governments have come to power in Germany, Austria and France and are inciting violence against resident Turks and Muslims. A vengeful Turkey joins forces with Russia and declares war against the EU. Turkish commandos besiege Berlin, obliterate Europe and take control of the Continent.

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UK Rebate ‘On The Table’?

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EU Politix is reporting UK Deputy Prime Minister John Prescott as telling a plenary session of the EU’s Committee of the Regions that London is “strongly committed” to finding agreement on the EU budget before the end of 2005. He is quoted as saying “We can not change agriculture in the short term.” and “We have put our abatement on the table. It is not the best way to spend European money”. If confirmed at the actual summit this would be news. This is also being linked to the establishment of some kind of fund to offset the industrial impact of globalisation and offshoring.

However I remain sceptical both on whether there is this dis-connect between the budget and agricultural reform in reality (remember opening talks with Croatia was not – *definitely not* – linked with the agreement to start negotiations with Turkey) and about the advisability of the UK taking this approach. Still, maybe this has something to do with it.

EU Common Circus Policy?

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MEPs are soon scheduled to debate a new ‘Common Circus Policy’. This is following the publication of a report: “new challenges for the circus as part of European culture”. Apparently MEPs agree that circuses should be referred to as part of Europe’s cultural heritage, but tend to disagree on whether they should include presentation of animals or not:
At the moment, Austria does not allow circuses to use any wild animals (even in the parliament?), while the Scandinavian countries ban some kinds of animals, such as lions and tigers (hence the more touchy-feely approach to politics there I imagine).

UK Jobless Upward Trend Continues

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U.K. jobless claims rose for an eighth consecutive month in September, extending the longest period of increases in almost 13 years, “as growth in Europe’s second- biggest economy slows”. This adds just a little more evidence to the fact that all is not necessarily currently all for the best in the land of John Stuart Mill. However as NTC research point out, not all is totally bad either:

Meanwhile, annual average earnings growth held steady at 4.2 percent in the three months to August, signalling that higher inflation is still not feeding through to wages.

So earnings continue upwards at a healthy clip, but not above trend. No evidence of ‘secondary effects’ here then. Which makes you wonder why the normally reasonable Mervyn King is currently being so evidently unreasonable. You can find my explanation for this here (and in the comments).

Mervyn King on Tuesday night signalled he was not convinced of the case for lower interest rates and could see many reasons why the rise in oil prices might increase inflationary pressure.
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