Tuesday, June 29, 2010
Specifically, while the EU is suffering from Euro and xenophobia induced identity crisis, South American Integration seems to be progressing! UNASUR, which will merge Mercosur and the Andean Community (CAN) into an EU type of entity for South America selected its first Secretary General, the former president of Argentina, Nestor Kirchner, on May 4 (2010, for more on this see eg BBC News report).
In addition, the Paraguayan President Fernando Lugo has made a passionate appeal to his country's Congress (June 26) to overcome their concerns and approve the entry of Venezuela in Mercosur (Mercosur's energy (oil) autarky will benefit from Venezuela's power in oil). Paraguay being the only Mercosur member that has not adopted Venezuela's candidacy (for more see "Lugo Calls for Venezuela’s Entry into Mercosur" in Americas Quarterly)
Note: In November 2005, a few weeks before the failed Hong Kong WTO Ministerial meeting for the Doha Round of world trade talks, George Bush failed to rally the countries of the Americas (Mar del Plata meet) for an FTA (free trade area) of the Americas. Probably, for the best, ex post facto, of all parties concerned (given eg the fate of NAFTA and the Democrats and others' stance re US international trade agreements these days)
Monday, June 28, 2010
IMO just-in-time (and outsourcing) rather than globalisation per se are most responsible for the decline in quality of life & work and in the environment. And for making the dynamics of this world so chaotic. Of course there are many factors, but these two, especially the first one, is IMO a dominant one.
Friday, June 25, 2010
It is no surprise IMO that Simon Evenett's Global Trade Alert, that records not that obvious forms of barriers and distortions (ie "sneaky" acts of protectionism) has found (see "Protectionism: Pantomime villain fails to materialise" in the FT, by Alan Beattie, June 25, 2010 http://bit.ly/aqZhyy) that since the first G20 crisis-related summit of November 2008 where 20+ governments declared their commitment to free trade etc etc, governments around the world have put in place not only 99 traditional restrictions such as anti-dumping and countervailing duties but 397 other new "sneaky" protectionist policy measures. The latest report of Global Trade Alert is coming out this week and should make very interesting and telling read. It would also be interesting to know how many and which types of protectionist measures have been put in place by the US and the EU as well as the BRICs and of course China and Japan!
IMO the bottom line is that in spite of rhetoric, media and other hype, etc, globalisation is not an accurate name for the process that has been going on since post WWII GATT and the establishment of the WTO in the 1990s. IMO real globalisation would be a great thing. But, much like the European Integration (or even worse, NAFTA), it would require a much more humanist, systemically balanced establishment of real freedoms for real companies and real people. The world breaking news, the Internet, e-commerce, the social media etc do give the impression of a globalised world. But it is largely, just that, an impression. Eg how many companies other than those based in North America and some European countries (eg UK) have truly been able to engage in world trade via e-commerce at a substantive level? What % of the world's SMEs and micros?
So, what globalisation? The fact that there are now global players from Japan and the BRICs next to the traditional football, sorry, I meant trade and economic, traditional powers, plus the fact that most countries do some exporting of goods, does not constitute globalisation. And while the US and the EU are largely finally coming to terms with the idea that they are Services economies, while, strangely most of their export trade is still in the minority of GDP "manufactured goods" category, while some, including the author of this post, are claiming that the US (and maybe the EU) should depend more and more on meta-industrial age "intellectual products" for their export revenues (because sweat shop high labor intensity low skill low pay jobs do not for a better future or quality of life make), and while it of course makes perfect sense that many in the EU and the US are upset about the initially secretive method of ACTA negotiations, one is IMO allowed to ask:
What globalisation are you talking about (or is it "globalization")?
Saturday, June 19, 2010
Thursday, June 17, 2010
Does the EU (Brussels (EC, EP, Council etc) + member states) have the guts to stand up to global finance & re-negotiate the role of finance in EU economy, society and life in general?
In other words does the EU have the guts to cause of an overhaul of the current model of capitalism model into a new better model or not?
Because IMO any open minded capitalist can see that the current model of capitalism is very faulty if not defunct! And world public opinion agrees. The US does not seem willing to do so.
The EU (Brussels and member states), does it have the will - guts?
The stakes are high not only for EU and Europeans but the whole world.
Capitalism is still the best available system, but the current model is not working and if not overhauled, it runs IMO the risk of destroying Capitalism as a system that is acceptable to people in Europe and around the world.
Can the EU assume that leadership, for its own sake and the world's (and Capitalism's)?
Wednesday, June 16, 2010
If you want to read my article re elements for a Greek competitiveness model in the "N Business" section of the newspaper "Ta Nea" June 15 go to the PDF of the print edition at http://digital.tanea.gr/ and then scroll all the way down to pp. 38-39 of it (in Greek) - PS. I may do a post re competitiveness models in English in my blog sometime soon.
Monday, June 14, 2010
I was reading an interesting WSJ article this morning. The article and the data quoted in it show IMO how Asian (& US) manufacturing and other exporters were piggybacking on the "hard" Euro. Also begging IMO the question: Who was the so called engine of growth: a) Asian manufacturing (as claimed) or the EU consumers and/or the uber-hard Euro?
Which led me to the following sequence of thoughts:
1) If China's yuan-USD rate policy had an "X" impact on US imports, what can then be said of impact on Eurozone imports due to the ECB's hard Euro policy? X times 3, 5, 10, more?
2) Are the EU citizens' interests being served by EU's WTO membership especially but bot exclusively since China entry and strategy?
3) The ultimate way for the Euro to be promoted and for EUropeans to unite may be for the EU to leave the waning WTO system!
(Food for thought: Should the UK leave the EU or should the EU leave the WTO? lol)
4) Food fir thought: Should the EU consider leaving (even temporarily) the WTO in order to protect its interests (eg the Euro, its budgets, the Single Market, etc)?
5) How are the EU's micros, SMEs and "average" workers (and the European Social Model) being served by the EU's WTO membership?
6) Should the EU pull the plug of the current (and faulty) version of globalisation? And negotiate a new one with US, BRICs, ASEAN, etc?
7) Are these key strategic questions that the current "crisis" is diverting the EU and its members from considering? For whose benefit?
8) Which interests are promoting & capitalising on xenophobia in order to divide the EUropeans as well as alienate them from their fellow 6 billion humans?
9) What interests are promoting a) intra-national and b) inter-member-states squabbles in the EU in order to divert attention away from the EU's interests?
10) Who is afraid of the EU's Social Model, its 0,5 bn population, its socio-political values and their potential impact on the rest of the world?
Think those issues through! Do not get caught up in the plot as set out by certain interests!
11) Which interests are promoting narrow (tunnel vision) views on such issues as sovereignty, taxpayers interests, immigration & identity, etc?
12) Which interests are capitalising on national and other stereotypes to keep EUrope from union and to promote xenophobia?
13) Which interests are working hard to make EUrope again a place where progressive minds flee from rather than the whole world is drawn to?
14) Which interests are working hard to turn the European Dream of the last 50 yrs into a nightmare for EUropeans and other humans?
15) It is high time for a global campaign against a) rising xenophobia, b) anti-humanism & c) a "global apartheid" in the US, the EU, the world.
16) The sum of most national immigration policies in force around the world these days constitute in effect a "global apartheid".
17) Are we going to let fellow humans become the scapegoats for the problems we are facing in this era?
18) Elementary my dear Watson: Economic immigration should in principle be FREE at least between the countries that participate in the world trade WTO system
Thanks for reading (and thinking)!
Friday, June 11, 2010
"What's holding back the Eurozone13?
Eurozone's economy grew by 2.5% (on an annual basis) in the second quarter of 2007 (Q2, April to June) or 0.3% from to the first quarter, after an expansion of 0.7% in the first quarter.
Is it investment or lack thereof, is it systemic reasons, ...? Is it that the single market does not work that well with the Eurozone? Or the exchange rate (strong Euro)?
Wednesday, June 9, 2010
2) The Era of "Why?"
In the 20th century, the key question (in business, technology, decision making of all kinds) was "how".
In the 21st, I argue that the key question is "why".
Because the parameters of the system are changing. In many areas, full capacity conditions are being reached.
In reaching decisions of all kinds, businesses and other organisations, as well as people (individuals), are confronted with new parameters and constraints.
Opportunity costs (of doing one thing vs. another) are changing too.
Problems are becoming more complex, priorities are shifting.
Strategy and philosophy will become more important, as solutions become much more customised, reflecting the personal priorities of individuals or the individual priorities of each organisation.
More and more "one solution fits all" will be a less and less relevant ... solution.
Originally Written: 2003
Tuesday, June 8, 2010
Monday, June 7, 2010
Eurostat: 1st estimates for Q1 2010 GDP: Eurozone and EU +0.2% from Q4 2009, +0.6% and +0.5% respectively from Q1 2009.
2010: A year for rethinking the economic, policy, social, business, financial and other systemics of the world people live, work & do business in
In these ultra volatile times, chaotic regulations and laws make people's lives and the work of SMEs even more difficult and unstable.
In these ultra volatile times, policy makers in the EU, USA, etc must formulate policies and laws that provide more stability to people and SMEs
Euro at a 4 yr low against USD on Friday June 4 = good for Eurozone exports & tourism and less competition inside Eurozone from US, China etc. Most Euro crisis talk ignores the elephant in the room, ie the Eurozone "party" Chinese, US & other products had thanks to the expensive Euro! DM to Euro conversion rate was too high and forced GER to adjust internally but "overshot" and caused imbalances inside the Eurozone. The idea that the Euro could (or should) be as "strong" as the DM was unrealistic, unless the Euro only included Germany & "satellites". If indeed (as some argue) the Euro was established to "keep" GER in the EU, then that was a major strategic mistake. Euro/USD rates above 1.2 (1.3, 1.4) should have been averted by the ECB. They caused major competitiveness problems for Eurozone companies & sectors.
Did anyone alert Greek, Italian, Spanish, Portuguese, Irish, French even Belgian, Lux, Fin & Austrian firms they would have to go "German" to survive in uberhard Euro
How many other Euro members except NL are as infatuated with inflation and uber hardness of currency as Germany? The mere fact that 1 & 2 Euro were issued in coins rather than banknotes shows how needs of many members were not taken into account.
The German approach to monetary & inflation policy & single currency isn't the solution to the Euro's problems, au contraire it's the cause. Cheaper Euro is a blessing for all Eurozone firms with price elastic products and/or services; now more competitive both in Eurozone & world. For many years ECB opted for Euro pride (expensive Euro) and uber low inflation rather than competitiveness. Now Euro is priced for exports! Some seem to forget that the huge number of Eurozone firms that export mainly within the zone now have less competition from outside. They also assume that competitiveness must be based on a large corporations economic model; not so! And all those economies (USA, China, UK, etc) that were having a ball selling to the Eurozone are now sweating! How the world turns!
US & EU may not be Venezuela as some argue, but on the other hand, who would have thought in eg 2007 that many of their interventions in 2008-present would be so "socialist"?
"May you live in interesting times" was an Ancient curse (Chinese). Living in 2010 "fascinating times" is then a nightmare for many humans?
Who is afraid of (and/or despises) the European Social Models? There is a major difference between a) fine-tuning and b) de-composing the welfare systems in Europe (UK, Greece, Spain, etc)
If a member of the EU truly wants to participate in only a free trade system & nothing more then WTO rather than EU membership is the way!
One could argue that the stance of the US, UK, Germany & others re Turkey in the last decades was a significant factor in Greece's problems & 2009 crisis. Notably, Greece's main reasons for joining the EEC in 1981 & the EU's inner core (EMU) in 2001 were not economic but national security related. How many of the 27 members of the EU (ex-EEC) joined mainly for national security rather than economic reasons? Quite a few actually! In effect the 1957 establishment of the EEC (6 members) served firstly a security rather than economic goal, b/c of fail to launch the European Defense Community and the European Political Community. In other words, due to French assembly veto of the EDC, the EEC was in effect a political & defense community masked as as economic one!!
A key problem in the EU is that it relies on GER-FRA for most new ideas & initiatives. The mid & small size states must start leading more. The 27 must start working more as a team in the Council and European Council and that means more new ideas from small and mid size states. Read somewhere that Europe has too many countries for its size. Hm! Yet EU of 500 millions has 27 states whereas USA of 300 millions has 50 states
On Friday, the new Hungarian government vowed to avert Greece-Like Crisis. But the situation in Hungary and its causes crash the North/Central vs Mediterranean EU stereotypes!
Life's tough for incumbents in the US midterm elections in 2010!
Consider this: Is, after all, inward migration of human capital more useful to a country than inward foreign investment (direct and other). Globalisation was not meant 2 be best suited 4 the very rich & the very poor, effectively leaving the middle classes out of it. Yet it has. The global systemics and dynamics of this period are, sadly, both inhumane and irrational - philosophy. Globalisation can be made viable only via immigration freedom of the same level as free trade and free movement of capital
Most growth professions in the US are low skilled - low paid!
Americans and Europeans must realise that they live in a Services world, the industrial world has gone East.
Time for a major rethink of the economic as well as social mentalities - axioms of the industrial era
Is labour productivity supposed to be measured by the volume of sweat a worker emits per hour or workday?
Work models: a) work hard b) work smartly or c) word creatively.
Was the good ole "no pain, no gain" work motto a license for (work related) masochism?
If one takes "best practices" from different economies - countries and patches them up into a competitiveness model, one creates a monster! One economy's competitiveness model is another's model for disaster ie they are not to be copied
Is the crucial success - happiness factor nowadays the ability a) to change - adapt to changes or b) to live - feel at home in chaos?
Maybe the solutions to the problems of the Euro and the EU can be found somewhere between Plato and "Alexis Zorbas"
Localisation is not a viable alternative to Globalisation. But Regionalisation is & it is happening to some extent partly because Doha Round and other WTO failures.
I also re-iterate my view that an exit from the WTO could under certain circumstances be in the best interest of the EU (& of the US too).
Yes, Markets (of all kinds) r a useful tool but they do not "know best" nor are they "wise" not even that "rational" (often r drama queens). And of course policies, regulations & laws r very often faulty or at least imperfect. But no1 said Democracy was perfect, just the best one/ In a Democracy, citizens don't vote with their savings, investments or consumption. They vote in a voting booth, alone (no mob).
I re-iterate my view that it would be in Germany's national interest & the EU's for Mrs Merkel to re-do the grand coalition w SPD (2005-09)
The personality clash between A. Merkel & N. Sarkozy is not new. Press reports in recent yrs suggest completely different leadership styles. Nicolas Sarkozy is perhaps the most brainstorming leader in the "West" in a long time. That confuses many other leaders and their advisers!! On the other hand, Mrs Merkel's discussion with actor Simon Baker of "The Mentalist" during her recent visit to Hollywood is somewhat telling.
According to the Guardian Germany saves approx €10bn/year in transaction costs in the intra-Eurozone sales of its goods 12:28 AM Jun 3rd via web
Euro Economic Gov: Greece has an approx +2.5% GDP extra defense expense compared to Germany and NL due to the EU's non military union status.
"Merkel sees the crisis as not only about finance & economics, but as a clash of ideas, values & cultures" The Guardian
Eurozone economic "government" agreement should come with proviso that ECB stops acting like it's the Bundesbank, eg Euro/USD rate
French bid for euro zone "government" gains ground.
Helps dispel the "EU is bad for UK" myth: The Guardian: Britain top in Europe for attracting foreign investment. Which is not surprising considering that the UK acts as a trojan horse for US and other business to the EU single market
Tuesday, June 1, 2010
1) Seems to me that for an economy that is open to the world, an internal devaluation isn't that much different in effects than the good ole currency devaluation, except for psychology. What's important for austerity measures in Europe is to have a rationale that can be understood and make sense to citizens not just markets and experts.
So, who is going to empower citizens in various European countries to understand the economic & financial aspects in life nowadays? Do these pass a test of citizen scrutiny?
By the way: Blaming aliens/immigrants propaganda may alas have worked in 1930s Europe but one would expect Europe and US to be much wiser in 2010s
2) Are we, in Europe, the US, etc, addressing 21st century issues with a 20th century mentality?
For example, can WTO rules provide effective market access of US and EU companies to markets such as China and Japan?
If they cannot, why have WTO?
EU systemics may be messy these days, but are US systemics better off or worse off actually, when one scrapes through a few layers?
Well, let's see:
How dependent is the US economy to T-bill and minority US corporate equity ownership by state controlled Chinese funds? How many US corporations preferred to sell a minority equity stake to Chinese state investors rather than borrow from the US gov? The effect of that?
Yet another: There is a great difference between a) protecting savings and b) protecting investments.
3) Is Germany suspicious of a French conspiracy in the Euro?
Well, in terms of Euro-stereotypes (NB: I do not believe in them or like them), the French are best in ideas, the Germans in paying for them & the Greeks in reminding both the real meaning of life! Opa!
Stereotypes aside, IMO the main intra-EU "battle" at present is philosophical, mainly between the British, German, French and Greek/Med meaning and way of life!
When I read the analyses on Greece of certain world acclaimed media I am aware of their underlying philosophical antipathy for Greece. Said philosophical antipathy has become blatantly obvious in recent months and found natural allies in the finance and economics milieu
The oxymora in modern Greek life that so confuse certain analysts reflect to a large degree the oxymora in Life & the Universe! Eg a main modern Greek philosophical axiom: "Μία είναι η ουσία, δεν υπάρχει αθανασία"
Not only the financial but more importantly the political & philosophical dimensions of the "Greek crisis" are thus potentially globally Contagious. The Greek case poses direct & real Contagion threat to the world's dominant economic, financial, policy, political & philosophical axioms - dogmae. Much like the Greek Revolution of 1821 went against the status quo agreements - axioms in early 19th century Europe yet led to game changer.
As an atypical native of Greece with an Anglo-American education it took me 40 yrs to realise the global value of Greece and its mentality. The reason that Greeks, Brazilians & a few others were put of Earth is to keep reminding others of the real meaning of life (Opa, Samba etc)
So, bottom line, is the ECB playing France's game by buying up sovereign bonds of Greece and other EUrozone member states? Well, in a way, the ECB is now atoning for the "sin" of destroying Eurozone economies via uber expensive Euro (to satisfy the BB)!
Reminder: In the beginning, EU countries thought they were joining a Euro-zone not a DM-zone, ran by an ECB not the BB!
I have not answered the question, have I? Well, in a way I have.
By the way, maybe some should stop whining about (alleged) "unelected Eurocrats" and start being concerned re effects of "unelected moneycrats", right?
You know summer is here when Roland Garros (May 18 - June 6) is on and Wimbledon (21 June to 4 July) is near!
And while Mrs Merkel is in Italy overseeing the preparation of the German team for the World Cup, after Lena won the Eurovision Song Contest for Germany, when you don't expect anything to happen, the German President resigns (May 31)!
Oh well! "Τα πάντα ρει" (everything flows)
IME dogs like humans more than humans like each other! Hence a man's best and undemanding friend, unlike cats! No, I am not referring to the dog in the Lost finale episode.