German Wages War Hots Up

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While Volkswagen’s long cold summer trundles on relentlessly there is more news on the wage reduction/increasing hours front.

Following the decision by workers at Siemens and DaimlerChrysler to work longer hours announced earlier in the summer, Volkswagen itself and construction company Bilfinger are looking for similar deals. (The Economist this week has a profile of VW’s head of personnel Peter Hartz – he who gave his name to the Hartz IV law – and a summary of the background to all this).

The numbers of workers likely to be affected are now no longer small: any VW deal would involve 100,000 workers, and the Bilfinger negotiations are said to be liable to affect up to 800,000 construction workers (similar moves are also in evidence elsewhere in Europe, the case of Alitalia pilots being only the most recent).

My take on all this is that while I feel there is an inevitability about it – many EU labour markets clearly need a shake-up – I do not share the rather ‘rosy’ picture most analysts are painting of the likely short and mid term consequences. These deals are clearly deflationary in the classic sense. They will affect consumption in the short, and possibly not so short – term. So when you add the wage reduction effect to the spending reductions implied by the need to reduce government deficits, and the likely 2005 slowdown in global growth which can affect exports, it becomes hard to see where exactly growth in an economy like Germany’s will come from.

Something is Something

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The Turkish Justice and Development party (AKP) seems to be backing down on the criminalisation of adultery agenda. This is a welcome development and, for once, an example of where targeted EU pressure may be effective. It also seems to be the case that external pressure is working in tandem with internal processes for once:

Civil rights groups demonstrated outside parliament as the debate got under way, complaining that other clauses in the penal code discriminated against women or intruded into people?s personal lives…………..Political analysts said the adultery measure may have been forced on him (Erdogan) by arch-conservatives in the AKP and in a small Islamic party that is influential with Muslim opinion but is not represented in parliament. They said it was too early to say what the consequences of the climbdown might be, although it was unlikely to end the debate about whether such legislation was necessary. AKP officials did not return calls seeking comment.

The decision to drop the measure was greeted with relief by Turkish and European officials. ?This proposal was a momentary lapse of reason, which we hope has now passed,? said a Turkish official.

Clearly there is much more to do, but this is a start. As I say: something is something.

Oh What A Tangled Web!

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Whilst noting that the EU Commission is trying to gently nudge Turkey on the criminalisation of adultery issue – European Commission spokesman Jean-Christophe Filori told a Brussels news conference that the proposed law “could trigger confusion and damage the perception in the European Union of Turkey’s reform efforts” – this post is not an attempt to re-open the useful and interesting exchange of views that took place around a previous post.

What I would like to do today is focus on another dimension of the same problem – the Turkish state’s relations with its own Kurdish minority – and how this relationship could become increasingly complicated depending on how the internal stability of Iraq evolves.
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09/11 Three Years On

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Homilies are not my strong point, so I will be brief.

Today is the third anniversary of a sequence of events which changed the course of contemporary world history, and lead to the loss of several thousand vibrant and innocent lives: we will remember them.

Those who died amidst the gnarled and twisted wreckage which remained following the devastation also left behind families, loved ones and friends whose lives have been equally gnarled and torn: we will remember them.

And as we look at the continuing destruction and horror which follows in the wake – whether this be in Madrid, Beslan or Jakarta: we will remember them.

“Age shall not weary them, nor the years condemn.
At the going down of the sun and in the morning
We will remember them.”
Laurence Binyon

Beslan, Pt. 2

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Beslan looks to shake Russia in a way that the Nord-Ost siege did not, in a way that the subway and concert and bus stop bombings did not, and in a way that the plane bombings would not have. But before I speculate on any of those things, I want to lay down a marker, a basic point of reference, one that is completely expected but ought to be said anyway.

Targeting a school for an attack is vile. It is more vile than attacking a whole population center, knowing that schools will fall under attack as well. It is worse than random terror, worse than anything else that the Chechens have done, and worse than anything that I can recall that al-Qaeda has done or been accused of.

Certainly there is no shortage of atrocities in this world, but specifically targeting children warrants a special place in the inferno.

It’s Deficit Time Again

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There’s a fair amount of talk again this week about the various government deficits and what to do with them. Earlier in the week the FT had a piece about the current state of play with the US deficit whilst the Economist is busy musing one more time over the ongoing saga of the EU growth and stability pact.

These two situations appear, on the surface, to be somewhat similar, but in reality it may be more interesting to consider how they differ.
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That Yes Vote

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That yes vote on the EU constitution gets to look more precarious by the day:

France’s ratification of the proposed European constitution will look more challenging than ever on Thursday night if Laurent Fabius, a former prime minister and a leading figure in the opposition Socialist party, uses a television interview to call on his supporters to vote ?no? in next year’s referendum.

The poll promises to be the main event in the 2005 political calendar in France and pollsters say Jacques Chirac, the president, has little chance of winning it without socialist support. Mr Fabius is seen as holding the balance of power in determining the party’s position, and is expected to tilt against the constitution.
Source: Financial Times