As the UK goes to the polls today, I feel the need to make a statement. A few weeks ago, I promised that I would deliver some posts to this blog regarding the election. Now, some of you may believe that because these posts have not appeared, I should make an apology, but that would not be right. A team of inspectors have searched my computer and discovered that not only were there post-related program activities going on during this time but that election related posts may have been moved to neighbouring blogs.
ECB: Plus ?a Change?
The ECB met earlier today to conduct the monthly review of interest rate policy. It came as a surprise to noone that the outcome was to leave everything just as it is. Surprisingly though the decision this month is surrounded by a little more controversy than has been the case of late since Italy’s Berlusconi and economic opinion in Germany have been suggesting that some reduction of rates might be no bad thing, whilst Spain’s economy minister (and former EU commisioner) Pedro Solbes is reported to have been pushing for an increase. Why the difference?
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China and Protectionism
The Chinese minister of trade Bo Xilai was in Paris yesterday. Most likely this is simply a happy coincidence, but the timing couldn’t have been better. The issue of Chinese textile imports has become one of the issues in the French referendum, and minister Bo was conveniently available to make all the right gestures:
“We want to soften the shockwave that there could be from the rise in Chinese textile exports,” Bo told a news conference after talks with French trade minister Francois Loos…”It is a temporary phenomenon and this phenomenon will weaken or disappear”.
Source: Reuters
Hysteria In The Kindergarten.
Someone must have put something really bad in their lemonade. I am at loss for words about the hysteria that the ongoing German class struggle has become (for more information see the comments to my last entry). It’s like a gang fight in kindergarten.
While Nobel Price laureate G?nther Grass (literature, not economics) made headlines with his important realization that even German MEPs are not living in a dimension of their own, and thus – in spite of the constitution’s stipulation that their decision’s are only subject to their conscience – are often subject to pressure from “a ring of lobbyists”, Guido Westerwelle, chairman of the German Liberals, thought he was missing out on all the fun and – in a truly surprising move – lashed out against trade unions, apaprently calling them ‘a plague upon the country’ and ‘traitors of the interests of employees’.
The latest, and most bizarre, development: In what is apparently an attempt to amend Godwin’s Law [“As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one.”] , the Jewish German historian Michael Wolffsohn compared the SPD’s chairman Franz M?ntefering’s statement about ‘Financial investors that descended upon companies like locusts’ to the anti-jewish agitation of the Nazi era and demanded that Mr. M?ntefering apologize to all affected by the Nazi dicatatorship.
According to a report from the Frankfurter Neue Presse he wrote among other things (translation mine) –
“…a boycot of companies is called for. And that should nor remind me, as a historian and a Jew, of January 1, 1933? ‘Don’t buy from Jews’ they said back then and just as now it was allegedly all for the good of the people and the simple man against the “greedy capital”, which was called “Jewish capital” then.”
Paul Spiegel, Chairman of the Central Council of Jews in Germany, hurried to tell the press that he finds it absurd to allege antisemitic motives for M?ntefering’s statements, but added that comparisons of humans to animals were generally hapless.
Hapless. Quite right. Like the entire debate. At least now I know that Germany really needs more kindergarten teachers…
China’s Currency and Trade
Currency traders around the globe lazily staring into their screens must have found themselves transfixed last Friday when the flatline indicating the value of the Chinese yuan (or renminbi if you prefer) suddenly jumped to life. And so it was that during a brief 20 minute interval the yuan surged to a level of 8.270 to the dollar from the hypnotic and seemingly eternal value of 8.276. Now 6 thousandths of a dollar isn’t really a very big deal, but it is the sheer fact that it happened that is causing all the fuss.
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Department of Wow: I
Rumaging around the OECD website this morning looking for the original documentation on the spate of comparative pensions articles which have been hitting the press in the last couple of days I came across something which I consider truly, truly interesting.
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French Referendum Poll Update
Just a quick follow up on the state of play with opinion poll outcomes in France. Le Monde today reports that of four polls published yesterday two gave a majority for the ‘yes’ vote, whilst the other two suggested a significant decline in ‘no’ support (details in fold). Since the shift is partly among socialist voters, is this a ‘Jospin effect’? (The former PS Prime Minister went public on prime tv late last week with his support for the ‘yes’ campaign)
Whilst I’m posting, this article in the FT about tensions between Barroso and Chirac makes interesting reading. In particular since it suggests that the fairly modest celebrations of the enlargement anniversary I noted yesterday may be linked to a deliberate policy of not rocking the boat at a sensitive time.
Curious detail: the FT reports “Mr Chirac believes Mr Barroso has an infuriating ability to sound like a liberal when addressing a business audience, while peddling a more French-friendly vision of a ‘social Europe’ to trade unionists.”
Wouldn’t this be yet another case of people who live in glass houses shouldn’t throw stones.
NB following a point in the comments section, can anyone bring us up to date with some info about the evolution of and background to the vote in the Netherlands?
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Triste Est Omne Animal
Yesterday was the first anniversary of the entry of ten new states into the EU. It was an anniversary generally celebrated amidst a notable lack of champagne and fireworks. Perhaps we are living in more discrete and austere times. Nonetheless there have been articles here and there in the press, amongst them the one in the Economist which I allude to in the title.
The Economist quote actually comes from one of the founding fathers of modern medicine – the second century Greek physician Galen – and the full quote is “Triste est omne animal post coitum” (no prizes for guessing the use to which the Economist puts this idea in the context of the recent enlargement, although if any of our commentators feels moved to provide anecdotal testimony on the soundness of Galen’s original idea, then please don’t let me stand in your way).
The article is provocatively entitled “Now that we are all bundled inside, let’s shut the door“, and is a survey of all the various kinds of ambivalences and ambiguities which can now be found among the 25 member states about the enlargement process in general. An interesting if not profoundly novel assessment of the state of play. Perhaps the most surprising discovery for me was the level of tension which currently seems to exist along the Brussels/Bucharest axis.
Perhaps a more balanced assessment can be found in today’s EU observer. Unusually for me I find myself entirely in agreement with the sentiments expressed by European Commission President Jos? Manuel Barroso who is quoted as saying that the anniversary “is a happy event for all Europeans” calling the enlargement “a reunification of not only nations and peoples but also of cultures”.
21st Century Socialism.
As all of Germany seems to engage either in market or Marx bashing these days, I thought it is time to add my two cents to the debate – and I’ll do it with the help of the US Europhile Jeremy Rifkin, who gave the “Stuttgarter Nachrichten” an interview about an old book of his, “the end of work.” The current German debate – the “Kapitalismuskritik” (“capitalism critique”) – is the result of a surprising lack of political imagination, a lot of disappointed social democrats, an important regional election in May, and the lack of a referendum about the European Constitution that would serve to channel the electorate’s fears, as it just happens in France.
Despite the fact that almost everyone, including business professors, in Germany – just as everywhere else – agrees at least theoretically, that there are issues to be debated with respect to the way our economy works, including obvious CEOcratic excesses, the political participants don’t seem to be able to update their class-struggle vocabulary to the needs of the 21st century. While I always thought “the left” had won a conceptional edge over so-called free-market fetishists by accepting that markets are “one coordinational mechanism among others”, I’m not sure about that anymore after having to endure the conflicting and confusing use of so many economic terms by leading German Social Democrats.
Thus, I suppose it was a good idea of the German government to invite Jeremy Rifkin to talk about his ideas concerning the future, or rather the end of work as we know it.
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French Referendum Still Up For Grabs
On Friday I suggested (using an Economist article as my point of support) that the French referendum result was far from a foregone conclusion. Further evidence for this comes from a poll published in today’s Le Monde. For the first time in recent weeks we have evidence to support the possibility of a ‘yes’ vote: 52% say they are prepared to vote in favour.
The poll was conducted by TNS-Sofres and Unilog for Le Monde, RTL and LCI.The last time this poll was conducted (15-18 April) the ‘no’ vote registered 55%, so there is evidence for some sort of change. The shift reflects an increase in those who expressed a clear intention to vote (up to 63% of those interviewed from 58% in the previous round).
Now obviously one swallow doesn’t make a summer, and opinion polls obviously have notorious problems, but it does seem that something is moving and that in France at least the game is far from over.