The EU comes to an agreement on Banking Union

European leaders met in a summit last week that led to an agreemetn on a banking union:
http://www.reuters.com/article/2012/12/18/us-eu-bankingunion-idUSBRE8BH0KZ20121218

Video from The Telegraph:

A week in Europe - from the extreme right to European integration and everything in between

I recently returned from a week-long trip to Europe.  First stop was London, where I started off by giving at lecture at the London School of Economics on my manuscript on anti-discrimination policy in Europe.  I had an appreciative audience, and several friends and colleagues were able to attend, including a former student from UT Austin.  I always appreciate being able to present my work to a European audience, being an American, I always wonder if I'm characterizing the issues in an appropriate way, and it's always nice to get feedback from people with a strong interest in the topic.

The next day was spent in a conference on the extreme right in Europe.  I have written about voting behavior and the radical right, so this was a chance to hear from those who worked on the ground to combat right-wing extremism.  This is an important topic in Europe, as violence against immigrants and ethnic minorities is on the rise during this time of fiscal crisis.  The Institute for Strategic Dialogue hosted the conference and has written a preliminary report on the issue as a prelude to in-depth country studies over the next year: http://www.strategicdialogue.org/Policy_Briefing_-_Far_Right_Extremism_FINAL.pdf

 

London is a lovely place to visit during the Christmas season and I enjoyed seeing the lights in the shopping districts.

 

No trip to London is complete without a stop at Harrods and Oxford Street

 

One of my more interesting stops during the half day I had to play tourist was at the British Library, where the room of treasures had everything from original Beattles lyrics to the Magna Carta and it's related documents.

After London, I flew to Berlin to attend a conference held at the Freie Universitaet Berlin, hosted by my colleagues Tanja Boerzel and Thomas Risse who head the KFG "The Transformative Power of Europe." I spoke again about the development of anti-discrimination policy in the EU, in the context of the diffusion of ideas from the U.S. to Europe. Here's the link to their website: http://www.polsoz.fu-berlin.de/en/v/transformeurope/

Will Britain Leave the EU?

Several stories in the New York Times and the Economist highlight the possibility that Britain may soon have a referendum on EU membership.

The Economist starts off with a story which emphasizes Britain, and in particular David Cameron's isolation within the EU
http://www.economist.com/news/leaders/21567940-british-exit-european-union-looks-increasingly-possible-it-would-be-reckless


The following story examines the how, why and implications of Britain leaving the EU:
http://www.economist.com/news/briefing/21567914-how-britain-could-fall-out-european-union-and-what-it-would-mean-making-break

A story in the New York Times examines the leader of the United Kingdom Independence Party which is now finding its Euroskeptic positions to be in the mainstream:
http://www.nytimes.com/compendium/reader/FNF765KNIFVCMORBYLPX7QVWVZA/291/1214

The Eurozone crisis is far from over...

German Bundestag approves Greek bailout: http://www.nytimes.com/2012/12/01/business/global/german-finance-minister-urges-lawmakers-to-approve-greek-debt-deal.html?_r=0

From the Financial Times - Eurozone states face losses on Greek debt
http://www.ft.com/intl/cms/s/0/e5be9df4-38b1-11e2-bd13-00144feabdc0.html#axzz2DkoZAlra

Germany may be heading into recession:
http://www.bloomberg.com/news/2012-11-30/germany-seen-recession-bound-in-poll-showing-euro-crisis-deepens.html

ECB and IMF push for Eurozone reform:
http://my.news.yahoo.com/ecbs-draghi-says-euro-zone-074735661.html

Deal on Greek debt reached

The IMF and EU Finance Ministers came to an agreement Tuesday to allow Greece to get the next tranche of funds and pay its debts.
http://www.reuters.com/article/2012/11/27/us-eurogroup-greece-idUSBRE8AQ0J920121127

The view from the BBC, with video from key players: http://www.bbc.co.uk/news/business-20506251

CNN Money weighs in: http://money.cnn.com/2012/11/26/news/economy/euro-imf-greece-deal/index.html

...and one last view from Business Week: http://www.businessweek.com/articles/2012-11-27/is-this-greek-deal-for-real

Budget talks end with no agreement - Greece talks continue

As expected, EU budget talks broke down after two days with no agreement.  David Cameron went into the negotiations with demands for cuts, rather than the 5% increase being pushed by the Commission:
http://blogs.wsj.com/brussels/2012/11/22/britain-targets-commission/?mod=djemRTBrusselsBlog_h

More from the Wall lStreet Journal on the collapse of the talks:
http://online.wsj.com/article/SB10001424127887324352004578137051647298838.html?mod=djemalertNEWS

More on the budget impasse from the New York Times: http://www.nytimes.com/reuters/2012/11/23/business/23reuters-eu-budget.html?smid=tw-nytimesworld&seid=auto&_r=0

and CNN's report looks into the components of the budget - with video: http://edition.cnn.com/2012/11/23/business/eu-budget-summit/index.html


EU finance minsters were unable to conclude talks on Greek debt reduction and they will continue on Monday.
http://money.cnn.com/2012/11/21/news/economy/eu-imf-greece-bailout/index.html

If you are really interested in the details on Greece's precarious situation, the Wall Street Journal has prepared a cheat sheet explaining the current issues on the table:
http://blogs.wsj.com/brussels/2012/11/20/your-cheat-sheet-to-greece/?mod=djemRTBrusselsBlog_h

France's credit rating was downgraded by Moody's late Monday, and French officials tried to downplay the action:
http://www.nytimes.com/2012/11/21/business/global/newcomer-to-ratings-game-gives-france-a-dim-view.html

European fiscal woes continue & strife over EU budget

Europe is still/back in recession: http://www.foxnews.com/world/2012/11/17/europe-government-debt-burdens-worsen-as-austerity-bites-and-economies-shrink/

Internal EU migration to Germany is on the rise: http://www.spiegel.de/international/europe/euro-zone-enters-recession-as-immigration-to-germany-rises-a-867461.html

Europe Gives Greece more time for Budget Cuts: http://www.nytimes.com/2012/11/13/business/global/europe-gives-greece-two-more-years-for-budget-cuts.html?smid=tw-nytimesglobal&seid=auto&_r=0

On Friday, EU President says agreement on EU budget is possible: http://uk.reuters.com/article/2012/11/16/uk-europe-budget-van-rompuy-idUKBRE8AF14Z20121116

By Saturday Spain's Rajoy says EU budget that would make cuts to subsidies is unacceptable: http://www.reuters.com/article/2012/11/17/us-spain-eu-budget-idUSBRE8AG0G720121117

Anti-immigrant fascist party on the rise in Greece: http://www.nytimes.com/2012/11/18/opinion/sunday/europes-new-fascists.html?pagewanted=1

Veterans Day in the US - Armistice Day in Europe

Across Europe people fell silent at the 11th hour on the 11th day of the 11th month to commemorate the end of World War I and to remember the dead from all wars, including Afghanistan - but the day holds even more significance as the Economist points out:
http://www.economist.com/blogs/charlemagne/2010/11/armistice_day_europe

The day is known as Remembrance Day in the UK:
http://www.guardian.co.uk/uk/2012/nov/11/remembrance-sunday-services-uk

The poppy is the symbol, taken from the poem "In Flanders Fields..."


Meanwhile, issues around the Euro Crisis continue, with the possibility of a British exit from the EU on the agenda:
http://www.nytimes.com/2012/11/12/business/global/12iht-dixon12.html?_r=0

Some video from the FT on the Merkel-Cameron meeting

Meanwhile, EU workers striked to protest potential EU budget cuts: http://www.foxnews.com/world/2012/11/08/eu-workers-strike-over-possible-budget-cuts-others-wonder-why-topic-has-not/

Back to the Euro Crisis

Greece's Parliament has approved a new austerity budget while unemployment continues to rise and Greece's economy contracts: http://www.economist.com/blogs/freeexchange/2012/11/euro-crisis
Another perspective from the Telegraph: http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100021180/who-will-stop-the-sado-monetarists-as-jobless-youth-hits-58pc-in-greece/?utm_source=dlvr.it&utm_medium=twitter

Meanwhile the EU and IMF apear to be at odds over Greek debt: http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_08/11/2012_469142

David Cameron and Angela Merkel met this week amid concerns that British conservatives want to consider leaving the EU:
http://www.washingtonpost.com/business/at-london-dinner-germanys-merkel-lobbies-a-reluctant-britain-to-back-closer-eu-integration/2012/11/07/b1e65d34-2923-11e2-aaa5-ac786110c486_story.html

Another commentator feels that there are deeper tensions that need to be dealt with: http://www.telegraph.co.uk/news/worldnews/europe/eu/9658443/Germany-is-losing-patience-with-Britain.html

Britain's Prime Minister David Cameron, left, goes to shake hands with German Chancellor Angela Merkel, right, as they pose for the media before their meeting at 10 Downing Street, in London, Wednesday, Nov. 7, 2012. The Prime Minister said at a recent EU summit in Brussels that he would veto any proposal for the next seven-year budget framework that went above a freeze on the current position, this, in turn, allegedly left the German Chancellor prepared to scupper a summit of European leaders due on 22-23 November on the EU budget unless David Cameron withdraws the threat of a blanket veto. Photo: Bogdan Maran / AP

Read more: http://www.sfgate.com/news/article/At-London-dinner-Merkel-urges-UK-support-for-EU-4017070.php#ixzz2Berh8rfA

More European reactions to Obama victory

David Cameron is pleased with the outcome, uses the result for Republicans to warn Tory hardliners:
video: http://www.telegraph.co.uk/news/worldnews/us-election/9660779/David-Cameron-congratulates-Barack-Obama-on-election-victory.html
From the Guardian: http://www.guardian.co.uk/politics/2012/nov/07/david-cameron-romney-failure-warning

More from the Telegraph on lessons learned by Cameron: http://blogs.telegraph.co.uk/news/benedictbrogan/100188343/the-power-of-incumbency-and-social-liberalism-what-david-cameron-has-learned-from-barack-obama/

EU officials go to twitter and video to congratulate President Obama: http://www.euractiv.com/global-europe/twitter-explodes-eu-wishes-obama-news-515903

The Wall Street Journal's take on the European response: http://online.wsj.com/article/SB10001424127887323894704578104543325069724.html

http://live.wsj.com/video/europe-welcomes-obama-second-term/6EBA9CE1-BAC4-4995-A798-CEE3AAEB8046.html

European reaction to the U.S. election

...but we start with the U.S. Mission to the EU:



The world reacts to Obama's victory (video) http://www.guardian.co.uk/world/video/2012/nov/07/obama-election-victory-world-reaction-video

 The Telegraph's take (video): http://www.telegraph.co.uk/news/worldnews/us-election/9660717/US-election-2012-the-US-political-playing-field-tilts-against-Republicans.html

Daily Mail: http://www.dailymail.co.uk/ushome/index.html

Der Spiegel:  http://www.spiegel.de/international/world/europe-sends-congratulations-as-obama-is-reelected-a-865749.html

and Der Spiegel's take on Transatlantic issues: http://www.spiegel.de/international/world/what-obama-victory-means-for-trans-atlantic-relations-a-865695.html

The Economist: http://www.economist.com/blogs/lexington/2012/11/2012-presidential-election-1

Le Monde: http://www.lemonde.fr/

German Handelsblatt:  http://www.handelsblatt.com/

A European Take on the U.S. Election

The day before the election:

A "less than resounding" round of support for Obama from European outlets:
http://www.reuters.com/article/2012/11/05/us-usa-campaign-press-idUSBRE8A41H920121105?utm_medium=referral&utm_source=t.co

A European's take on the U.S. election: http://www.policymic.com/articles/5376/a-euro-perspective-on-american-election-2012-folly

A rather harsh critique of American capitalism, from Der Spiegel: http://www.spiegel.de/international/world/commentary-total-capitalism-and-the-downfall-of-america-a-865437.html

...will add more later!

Future for Greece still uncertain, Cameron in trouble

This article from the WSJ describes the Greek situation as still very tenuous:
http://online.wsj.com/article/SB10001424052970204846304578093072277336556.html

with increasing debt weighing down any possible recovery, and unemployment reaching new highs above 25%


Meanwhile in Britain, things are not looking good for David Cameron as his deputy Prime Minister and coalition partner Nick Clegg criticizes his policy on Europe and the EU budget:
http://online.wsj.com/article/SB10001424052970204712904578092794267606864.html?mod=googlenews_wsj


Wrangling over the EU budget continues:
http://blogs.wsj.com/brussels/2012/10/30/eu-budget-contortions-get-serious/?mod=WSJBlog&mod=brussels
and Angela Merkel weighs in:
http://uk.reuters.com/article/2012/11/01/uk-europe-budget-merkel-idUKBRE8A017Q20121101

Are things improving for Europe?

A story from the Washington Post suggests that the worst may be over for the Euro Zone:
http://www.washingtonpost.com/business/economy/smalls-signs-of-progress-in-euro-crisis/2012/10/25/21f1c3c6-1ed8-11e2-9cd5-b55c38388962_story.html

..but Spanish unemployment continues to reach record levels, as more people lose their jobs, and it is not yet clear that Greece will get their next tranche of bailout funds, due in November:
http://www.examiner.com/article/spain-and-greece-crisis

Video update

http://grab-media.com/premium-videos/4445817

European Summit inches forward toward crisis resolution

As CNN reports, EU leaders were able to come to agreement on bank oversight at the summit held in Brussels last Thursday and Friday : http://www.bbc.co.uk/news/world-europe-19986603

However, as CNN Money points out, there are still many difficult issues left to work out:
http://money.cnn.com/2012/10/19/investing/european-union-summit/index.html

Also from Reuters: http://www.reuters.com/article/2012/10/21/us-eurozone-roadmap-idUSBRE89K0IO20121021

Also, tensions were clear between French President Francois Hollande and Germany's Angela Merkel:
http://www.bbc.co.uk/news/world-europe-19986603

By Sunday night, there were reports that Angela Merkel was threatening to cancel next month's summit to discuss the EU budget if David Cameron continued to threaten that he would veto any budget that didn't call for a total freeze on spending: http://www.ft.com/cms/s/0/a8fa9b08-1ba0-11e2-ab87-00144feabdc0.html#axzz29zWpDoma

The domestic politics of the situation are making negotiations difficult, as well as personalities.  Leaders continue to move forward toward a banking union, but there are clearly some hurdles ahead that may derail or slow forward progress.  In the meantime, Greece appeared to be making progress towards it's next disbursement as reported in the AP, "Greek Prime Minister Antonis Samaras moved closer to winning a delayed aid disbursement when European leaders praised his government’s budget-cutting push." more: http://www.sfgate.com/business/bloomberg/article/Greece-Nears-Aid-Revival-as-Samaras-Wins-EU-3963940.php#ixzz29zZMmHUd

EU Leaders share ideas and concerns in lead-up to EU Summit

It has been a month of bilateral meetings between EU leaders from France and Germany in Spain, Greece, and Italy, while it is looking more likely that Spain will request a bailout and the cost of borrowing has dropped for Spain:
http://money.cnn.com/2012/10/17/investing/european-union-summit/index.html


Francois Hollande sends a warning to Germany's Angela Merkel: http://www.guardian.co.uk/world/2012/oct/17/francois-hollande-angela-merkel-austerity

François Hollande: remarks highlight gulf between Paris and Berlin over how to tackle Europe’s worst ever economic crisis. Photograph: Thierry Zoccolan/AFP

In the latest report from the BBC:
Germany's Schaeuble pushes EU economic union

Germany has called on countries using the euro to take decisive steps to bring about closer fiscal integration.

 

Chancellor Merkel is understood to support the proposal for a powerful budget commissioner

Continue reading the main story

Eurozone crisis

• Q&A: European Stability Mechanism
• Six burning questions for Spain
• Q&A: What went wrong in Spain?
• How eurozone crisis affects you

 

Greece and Spain announce new austerity measures after protests

Helmut Kohl makes a rare appearance on the 30th anniversary of his first term as Chancellor:
http://in.reuters.com/article/2012/09/27/germany-merkel-kohl-idINDEE88Q0JB20120927


Following the major protests in Madrid earlier in the week, Spain's government released a new budget mainly focused on cuts http://www.msnbc.msn.com/id/49201630

Greece's coalition government also reached a deal on austerity measures in a bid to get their next round of debt funding: http://online.wsj.com/article/SB10000872396390443916104578021882943321370.html?mod=WSJ_World_MIDDLENews

Protests over austerity measures in Spain and Greece

The New York Times ran a sobering story on the reality of hunger in Spain as austerity measures hit even the middle class: http://www.nytimes.com/2012/09/25/world/europe/hunger-on-the-rise-in-spain.html?_r=1

Protests spread in Madrid and both polic officers and protesters were injured:
http://www.nytimes.com/2012/09/26/world/europe/protests-continue-in-spain.html



The two biggest unions in Greece planned a general strike for Wednesday: http://www.reuters.com/article/2012/09/25/greece-strike-idUSL5E8KP5YM20120925?type=marketsNews

Meanwhile Angela Merkel continues to face resistance to proposed bailouts which must be approved by the German Bundestag: http://online.wsj.com/article/SB10000872396390444083304578016322798744636.html

While finance ministers from Germany, Finland and the Netherlands want to reopen negotations on the banking deal agreed to at the European summit last June:
http://uk.mobile.reuters.com/article/idUSL5E8KPCS620120925?irpc=932

Squabbling and Stalemate after big move by ECB

Despite the important moves by the ECB to support Spanish and Italian bonds, Euro area finance ministers continued to squabble over details of a deeper fiscal union and oversight of banks:

"Squabbling among European governments over the next steps needed to overcome the sovereign debt crisis raised the specter of more turmoil, puncturing a rally that had sent Spanish 10-year bond yields to their lowest in five months."
http://www.bloomberg.com/news/2012-09-16/european-squabbling-on-currency-crisis-solution-may-test-rally.html

EU leaders continued their one-on-one meetings with Spanish Prime Minister Rajoy meeting with his counterpart Mario Monti in Italy, while Francois Hollande and Angela Merkel met during a commemoration ceremony of a reconciliation speech by General DeGaulle in 1962 in Ludwigsberg Germany.
http://www.bbc.co.uk/news/world-europe-19684532


It's not clear that France and Germany see eye to eye on Euro crisis issues, and agreement is still needed on many details to move forward with the ECB's plans.
http://www.businessweek.com/news/2012-09-23/euro-leaders-seek-end-to-stalemate-as-discord-mounts-on-crisis

But perhaps one of the more disturbing pieces of news out of Europe this weekend was the impact of the Euro crisis on Irish Pubs "Irish bar sales have dropped by about 25% over the past decade — 5% last year alone — and the number of pubs has fallen from more than 10,000 to 8,300. Ten years ago, 80% of alcohol sales occurred in bars; now fewer than half do. The fastest-growing beverage is wine, once ordered in a pub only by the brave or unwitting." Having spent time in Irish pubs 7 (!) years ago, I hope that they will rebound...
http://www.freep.com/usatoday/article/57832862

An eventful week in Europe

On Wednesday the German Constitutional Court ruled that Germany could take part in the European Stability Mechanism: http://www.cnn.com/2012/09/12/business/german-constitutional-court-esm/index.html?hpt=wo_c2

After the ECB announced last week that it would basically become the "lender of last resort" for Eurozone countries Jose Manuel Barroso pushed for a more federal Europe in his state of the European Union speech:
http://www.presseurop.eu/en/content/press-review/2687731-barroso-utters-dreaded-word

He defended his position in a lively interview with Richard Quest of CNN: http://www.cnn.com/2012/09/13/business/barroso-europe-federal-states/index.html?hpt=ieu_c2

The Dutch election showed that there is still support for the EU and the Euro currency:
http://www.bloomberg.com/news/2012-09-13/dutch-election-suggests-europe-hasn-t-lost-its-mind-just-yet.html

The Economist opines on whether the recent moves by the ECB and Euro Zone countries are enough to end the crisis: http://www.economist.com/node/21562915

Steven Erlanger of the New York Times provides an overview of the weeks events:
http://www.nytimes.com/2012/09/14/world/europe/european-union-celebrates-german-and-dutch-decisions.html?_r=1

Along with the debt crisis, illegal immigration continues to be a challenge for Greece: http://online.wsj.com/article/SB10000872396390444506004577617383132000476.html

Bold Move by ECB not necessarily a cure for Eurozone Ills

Boris Roessler/European Pressphoto Agency

Mario Draghi, the head of the European Central Bank. Through his efforts to save the currency, Mr. Draghi may now be the most powerful leader in Europe.

 

 

 

 

As expected, the European Central Bank (ECB) moved to shore up market support and reduce interest rates for bond sales in Italy and Spain: http://www.nytimes.com/2012/09/07/business/global/european-central-bank-leaves-interest-rates-unchanged-at-0-75-percent.html?pagewanted=all

As noted in an editorial it is now up to EU governments to take the appropriate measures to move their economies forward: http://www.nytimes.com/2012/09/07/opinion/the-latest-attempt-to-save-the-euro.html?src=recg

However, the ECB's Draghi's bold move to support shaky countries leads to criticism, as Steven Erlanger from the New York Times writes: http://www.nytimes.com/2012/09/08/world/europe/after-high-note-for-ecb-plan-some-discord-emerges.html?ref=europe

France's president who has only been in office for a few months must figure out a way to cut his deficit while keeping his promises to increase economic growth: http://www.nytimes.com/2012/09/08/world/europe/french-president-must-cut-deficit-but-how.html?ref=europe

"And, in a worrying sign for euro zone policy makers, much of the media and political reaction in Germany — the euro zone’s most important country — was negative" http://www.nytimes.com/2012/09/08/business/global/daily-euro-zone-watch.html?ref=europe

Unemployment is still trending up, with Greece at 24.4% in June and Spain at 25.1%, higher than many more recent members of the EU like Slovakia at 13.3 %, and Poland at 12.3%. (from http://247wallst.com/2012/09/07/nations-with-the-highest-unemployment-rates/2/)

The New York Times website "Tracking Europe's Debt Crisis" has the latest: http://www.nytimes.com/interactive/business/global/european-debt-crisis-tracker.html?ref=global

Also a link to a graphic display for "Understanding the European Crisis Now"

http://www.nytimes.com/interactive/2012/06/14/business/global/understanding-the-european-crisis.html?ref=global

High level meetings as tensions increase in Eurozone

With the beginning of September, the Euro Zone crisis kicks into high gear, with meetings between high level government leaders and the ECB.

From the UK Guardian's Eurozone crisis live: http://www.guardian.co.uk/business/2012/sep/04/eurozone-crisis-moodys-european-union-negative#block-5045fd7ac0e35a003915c3fb

Germany tells Greece to keep reforming

Greek finance minister Yannis Stournaras received an blunt message from the German government today: implement those economic reforms, or else.

It was delivered in Berlin, where Stournaras met German finance minister Wolfgang Schäuble. After the meeting ended up, the finance ministry issued this statement:

• 'Most important is that Greece fully implement its obligations.Finance minister Schäuble pointed this out to his colleagues once again.'

The ministry added that Germany remains determined to see the details of the Troika report into Greece's economy before taking a decision on the country's request for more time to hit its targets. That report may not be released for several weeks.

Stournaras also held talks with German foreign minister Guido Westerwelle, so here's a photo:

Guido Westerwelle (second from the left) and Yannis Stournaras (second from the right) holding talks at the the Foreign Ministry today. Photograph: John Macdougall/AFP/Getty ImagesThe Wall Street Journal reports on concerns that tensions may resurface this month, as the ECB work on conditions for bond purchases and several key meetings will be happening:
 

--Tuesday: French President Francois Hollande meets Italian prime minister Mario Monti. Greek Finance Minister Yannis Stournaras meets German finance minister Wolfgang Schaeuble. Greek T-bill auction.

--Wednesday: Euro-zone August services PMI data. German bond auction. Troika of Greece's lenders returns to Athens.

--Thursday: ECB rate decision and press conference. Revised EU second-quarter GDP data. Spanish and French bond auctions. German July manufacturing orders. German Chancellor Angela Merkel meets Spanish prime minister Mariano Rajoy.

--Friday: German July industrial production.

http://online.wsj.com/article/SB10000872396390443847404577630110932880868.html?mod=googlenews_wsj

Pressure builds in Europe

August is usually a quiet time in Europe as most Europeans go on vacation, including leaders like France's new president, Francois Hollande. However, vacation time is over, and Hollande is facing some major issues, including the crisis in Syria, the announcement of major layoffs at Peugot, and riots in the city of Amiens, as I discussed on the BBC last week:


Hollande was criticized for going on vacation during a time of crisis in France and across Europe, but he is jumping right back into the fray, with a meeting with German Chancellor Angela Merkel on Thursday http://www.reuters.com/article/2012/08/20/us-france-hollande-challenges-idUSBRE87J0IV20120820

Although expectations are low for the meeting, it comes as data on the European economy come out, which are expected to show that the European economy is stalled, or even shrinking.  This data will impact European Central Bank deliberations as noted in the Wall Street Journal "The European Central Bank meets in a little over two weeks, and the surveys are among the last top-tier data officials will have in hand as they weigh interest-rate cuts and new steps to stabilize Spanish and Italian bond markets."

Angela Merkel is also facing major pressures at home and related to the Euro crisis. She has faced the greatest pressures, due to Germany's key role in managing the crisis, but she has also faced an unraveling coalition at home as noted in another article from the Wall Street Journal "German Chancellor Angela Merkel faces one of the toughest choices of her career in the coming weeks: whether to risk the unraveling of the euro zone, or her government."

Another top issue is Greece - the next few weeks may decide whether or not Greece will remain in the Eurozone.  Hollande and Merkel will each have meetings with the Greek Prime Minister this week, as Greece struggles to meet it's debt reduction commitments and Samaras tries to convince his European partners that they should continue to provide bail-out funds:
http://ca.news.yahoo.com/greeces-euro-fate-hangs-over-merkel-hollande-meet-032859601.html

What's going on in Europe? (besides the Euro crisis)

Denmark elected a left government last Fall, a historic election for the new woman prime minister (article).  However, as Denmark completed its 6 month Presidency of the European Council,  things were not looking as good for Thorning-Schmidt, as her far left coalition partner was angered over a deal on taxes with the center right (Economist). Another Danish politician, Pia Kjaersgaard, today decided to step down as leader of the Danish People's party, which has declined in influence since the election. The anti-immigration party had a strong influence over Danish governments beginning with the 2001 election, supporting the minority right-wing government, but the right suffered defeat with the fiscal crisis, despite the fact that Denmark is not part of the Euro zone.

On the immigration front, this has been a difficult time for immigrants in Greece. Armed gangs have been patrolling parts of Athens where immigrants live, often assaulting people. The government is detaining and preparing to deport large numbers of illegal immigrants, as Syrian refugees stream into Turkey and then try to make their way across the Greek-Turkish border. Greece is sending more border patrol agents, trying to stem the flow (Greece to deport 1600 in immigration crackdown).

In Sweden, a gathering by far-right anti-Islam groups from the U.S. and Europe was considered a flop, with estimates of only 100 to 200 in attendance (article).

Finally, the Olympics in London can only be described as a big success, despite the concerns in advance, and the empty seats the first few days.  There has been drama, heroism, and amazing performances.  It's just what the world needs in a time of great economic and political uncertainty.

Euro Crisis grinds along

Three years ago I started off my class on Western European Politics saying that the Euro crisis was going to be like watching a slow-motion train wreck. Three years later, those words still hold true.  I took a couple of months off from blogging as I was working on some book projects, and I have to say that trying to follow developments in Europe is often a bit tedious, although necessary, as it's not clear when some critical event is going to tip the balance and lead to some major cascade into disaster.  In any case, I need to get back into the swing of things before the semester starts in a few weeks so here are some of the latest headlines:

Don't let the Eurozone Debate Turn Nasty

In Euro Crisis, Every Player Has His Own Agenda

Euro Falls as Italy's Monti Warns of Euro

More to come!

Hanging out in DC - Updates on Europe

I'm in my second week in DC as a fellow at the Woodrow Wilson Center. While here, I'm working on finishing up writing a book on antidiscrimination policy and doing research on a book on comprehensive immigration reform.  My first day here in DC was spent at a conference on "The end of Multiculturalism" run by the Wilson Center's European Studies Program - the webcast is here, I'm in webcast 2 at the 37 minute mark: http://www.wilsoncenter.org/event/the-end-multiculturalism-europe-migrants-refugees-and-their-integration.

Today I attended a talk at the Atlantic Council by Dr. Josef Ackermann.  He spoke on "The Euro: A Dim and Dismal Future?"  The talk was broadcast on C-Span and can be watched here: http://www.c-span.org/Events/Outgoing-Deutsche-Bank-CEO-Discusses-Europes-Future/10737431213/

Key points included Ackermann's firm conviction that it can't be the end of the Euro. He believes that everything will be done to avoid the chaos and destruction of the Euro would being.  A Greek default would cost at least $500 billion and the spillover effects could double the cost.  He believes everything will be done to keep the Euro zone the way it is.  He noted that it was the (unnecessary) Greek election that brought things back to the point that they were at in December of 2011.

Akcermann pointed out that a fragmented Europe would have no way for self-determination -- only a united Europe can negotiate with the U.S. and China in the global marketplace.  He argued that European leaders need to explain the challenges and benefits of Europe.  There is no real leader of Europe, and peace is no longer a vision for young people who have no memory of war.  This may be the first that that Europe jointly solves a problem. Markets need to be patient and give Europe time to make the needed changes, which have in fact been caused by market pressures.

I came out of the talk feeling much more confident about the likelihood of Greece staying in the Euro zone, but I still think domestic politics are the wild card.  European leaders may want to keep the Euro zone together, but I worry that they may stumble into a situation where there's no other option (it's how Europe got into wars in the past).  Strong leadership is needed to chart a course through these choppy waters.

Possibility of a Greek exit from the Euro increases daily

With the failure of Greek political parties to form a government, new elections will be held on June 17th.  According to current polls, the party likely to come out on top (although without a majority) is the leftist Syriza party, which is against fiscal austerity measures that would ensure the ongoing bailout.  Analysts have varying takes on what might happen if/when a Greek exit (aka "Grexit") occurs:

From the Economist: http://www.economist.com/node/21555567

The FT reports on the new caretaker government and the upcoming elections: http://www.ft.com/intl/cms/s/0/e18e27e6-a012-11e1-90f3-00144feabdc0.html#axzz1v8ps1Oj3

The UK Guardian's front page ran a headline stating that a Greek exit would cost over a trillion dollars: http://www.guardian.co.uk/global/2012/may/16/cost-greek-exit-euro-emerges

CNN contemplates the possibility of a Greek exit: http://edition.cnn.com/2012/05/17/business/greece-euro-exit/index.html?hpt=ieu_t2 and also reports on multinational companies making preparations, while politicians avoid the topic: http://edition.cnn.com/2012/05/16/world/europe/europe-grexit-planning/index.html?hpt=ieu_c2

Storm clouds on the horizon...

France's new president, Francois Hollande will be sworn in on Tuesday, and will be entering office during one of the most perilous times for the Eurozone.  http://www.eubusiness.com/news-eu/france-vote.ggu

A perspective on the upcoming meeting between Hollande and Merkel on Tuesday from the UK Guardian: http://www.guardian.co.uk/business/2012/may/13/eu-leaders-showdown-eurozone-crisis
Greece has been unable to form a government, and is likely heading for new elections, putting in doubt the government's ability to implement new austerity measures required for their bailout. http://news.yahoo.com/greek-efforts-coalition-flounder-131813794--finance.html

Economist Paul Krugman sees few options for the Eurozone - http://krugman.blogs.nytimes.com/2012/05/13/eurodammerung-2/?smid=tw-NytimesKrugman&seid=auto

But economist Barry Eichengreen sees difficulties for countries that want to leave the Euro, comparing the current situation in Europe to the historical situation with the gold standard he states, "Yet I am reluctant to believe that things will turn out the same way this time. Four differences lead me to believe that maybe – just maybe – the euro will survive.": http://www.project-syndicate.org/commentary/is-europe-on-a-cross-of-gold-

The bleak outlook in the media is punctuated by protests, like those this weekend in Spain:
http://edition.cnn.com/2012/05/12/world/europe/spain-protests/index.html?hpt=ieu_c1

...and the dominoes continue to fall in Germany: http://www.nytimes.com/2012/05/14/world/europe/in-rebuke-to-merkel-social-democrats-win-german-vote.html?hp

Why attention needs to be paid to French legislative elections in June

The outcome of the French presidential election this past weekend was not a surprise, although Sarkozy did indeed close in on Hollande at the end, but it was not enough to give him a second mandate.  There have been many analyses of the election and what it means, but little attention has been paid thus far to the upcoming French legislative elections in June.  Although the French Assembly has little power compared to the President, the June legislative election is critical for Hollande's ability to govern.  He will need a majority of leftists in the Assembly, otherwise, if the right can manage a majority, he will be faced with a divided government, and "cohabitation" as happened under Mitterrand and Chirac, who had to work with Prime ministers and majorities from the opposition.  As Jim Bitterman notes in a CNN report, Sarkozy set to work on Monday to strategize on getting a legislative majority for the right. (http://globalpublicsquare.blogs.cnn.com/2012/05/07/after-the-french-election-will-divisions-remain/)

Bitterman also notes that there were 2 million blank ballots cast, while Sarkozy lost by 1.2 million votes.  This fact will be critical to the right's calculations as they look forward to the legislative elections.  Marine Le Pen may hold the key -- as I have written in my book on the Radical Right (Voting Radical Right in Western Europe) parties in France tend to use the first round of the two-round legislative election as a sort of primary.  The top candidates from the left and right will move forward, and candidates who come in behind them will usually agree to drop out, in order to give the top candidates a better chance of winning.  In past elections, the mainstream right has said that they would not cooperate with candidates from the National Front, which cost them seats.  It is yet to be determined what will happen in the upcoming election, now that Marine Le Pen has shown that she controls a large number of votes, which is concentrated in particular departments (see electoral map http://media.rtl.fr/online/image/2012/0423/7747131778_2012-les-cartes-du-premier-tour-le-vote-le-pen.jpg).  If the mainstream right agrees to coordinate with the National Front, it could mean that they could win several seats, potentially impacting Hollande's ability to get a majority. As has oft been said during this economic (and now political) crisis in Europe - chaos could ensue.

More Analysis:
From Steven Erlanger of the NY Times - on the same track as my comments above: http://www.nytimes.com/2012/05/08/world/europe/sarkozys-party-assesses-2-paths-after-loss.html?_r=1&pagewanted=all

http://globalspin.blogs.time.com/2012/05/07/after-winning-the-french-presidency-what-will-francois-hollande-do-next/

http://www.businessweek.com/news/2012-05-06/hollande-defeats-sarkozy-in-shift-of-power-to-french-socialists

Elections and Austerity - voter push-back

Sunday's first round of the French presidential election was a clear rebuke to France's Nicolas Sarkozy, but it is also worrying for EU officials that the far right National Front (FN) candidate, Marine Le Pen received the highest percentage of the vote ever for an FN candidate (18%) - a protest vote against EU policies? Along with elections coming up in Greece, and today's resignation of the government of Mark Rutte in the Netherlands (which will precipitate new elections), the EU's fiscal pact could be put in jeopardy. This will also have an impact on the growing debate between growth and austerity.  I expect election campaigns in all three countries to focus on the growth vs. austerity issue, as well as immigration, assimilation, and Muslims in Europe.

Election night results in France

It was no surprise that Nicolas Sarkozy and Francois Hollande advanced to the second round of the French presidential election today, however, polls did not predict the nearly 20% of the vote received by the candidate for the French National Front, Marine Le Pen.  This is much higher than her father received even in the second round of the 2002 presidential election.  Without seeing detailed survey data, it is hard to know whether this was more of a protest vote against Sarkozy, or a vote for Marine Le Pen, but it is clear that this was a rebuke to Sarkozy, who had been trying to court far right voters with a tough stance on immigration policy during the last few weeks of the campaign. Voters chose the candidate with the tougher stance...this may eventually have an impact on policy, depending on the results of the French legislative elections in June. The latest word is that Le Pen will decide on May 1st if she will endorse a candidate.

These results may also give heart to far right politicians in places like the Netherlands, which is expected to call a snap election, and the UK.  The far right has been on the rise since at least the 1990s, so this is not a totally new trend, but the results for Le Pen may indicate increasing support, at least in France.

This vote will give a boost to the National Front as it heads into the legislative campaign, with the possibility that they may be able to get a few candidates into the French Assembly in June.  The election was a disappointment for Jean-Luc Melenchon, who was predicted to get as high as 15% of the vote, but only received approximately 10%.  Overall turnout was strong at 80%.

Early polls suggest that Francois Hollande will get 54% of the vote to Sarkozy's 46% in the second round on May 6th.  The next two weeks will be spent with the two candidates fighting for far left and far right votes. 

Websites with up-to-date information on the election:
New York Times: http://topics.nytimes.com/top/news/international/countriesandterritories/france/index.html
UK Guardian:
http://www.guardian.co.uk/world/french-elections-2012
France 24 - with video:
http://www.france24.com/en/category/tags-th%C3%A9matiques/french-presidential-election-2012

Election day in France

French news outlets were reporting turnout around 70% a few hours before polls were to close.  Here's a link to video from France 24 - http://www.france24.com/en/20120422-france-voters-presidential-election-polling-station-first-round-arrondisement

The main twitter hashtag for election news has been #France2012 but some tweeters are using the hashtag #radiolondres to get around the blackout on reporting election returns before polling stations close. However, Belgium's Le Soir was posting some early results: http://www.lesoir.be/dossiers_speciaux/special2/2012-04-21/decouvrez-les-premiers-resultats-910747.php

The night before the French election

It is unlikely that there will be many surprises in the French election on Sunday, the incumbent Nicolas Sarkozy and his main challenger, Francois Hollande will move on to the second round.  What is interesting, is what the vote will tell us about the French electorate's response to the candidacies on the extremes.  On the far right, Marine Le Pen hopes to at least match the percent of the vote received by her father in previous elections (~15%) and on the far left, Jean-Luc Melenchon's new left party hopes to come in third, giving the party a boost for future elections.  Steven Erlanger of the NY Times provides some context:

The success of Marine Le Pen's father, Jean Marie Le Pen, in 2002 was embarassing for French voters and has had an impact on subsequent elections.  Voters may be less likely to vote for extreme candidates to avoid an outcome where a mainstream candidate doesn't make it into the second round. I describe this as strategic voting in my book, Voting Radical Right in Western Europe. However, with the polls showing Hollande at around 30% of the vote, it is possible that far left voter's may feel that he is safe and vote for Melenchon.  I think it is more likely that voters will strategically abandon Marine Le Pen to give Sarkozy a boost into the second round.

French election, far right and crisis in Spain

The far right in Europe has been able to take advantage of the economic crisis to a certain extent, but this has not necessarily led to electoral success, and it seems unlikely that Marine Le Pen will repeat her father's feat of 2002, getting into the second round of the French presidential election: http://uk.reuters.com/article/2012/04/12/uk-eurozone-populism-idUKBRE83B0UD20120412

As the trial of Ander's Breivik starts this week, there are concerns over the spread of anti-Muslim organizations as described in this article from the UK Guardian:  http://www.guardian.co.uk/world/2012/apr/14/breivik-trial-norway-mass-murderer

A year ago January I hosted a conference on this topic at UT Austin:  http://www.utexas.edu/cola/centers/european_studies/conferences%20and%20workshops/Past-Conferences-and-Workshops/Transatlantic%20Intolerance.php
The panelists examined the development of anti-immigrant and anti-Muslim groups in the U.S. and Europe in particular, and looking at linkages being made between them.  Politicians like Geert Wilders in the Netherlands has pushed for the development of a transnational organization to fight the spread of Islam. Clearly this is an ongoing concern, as highlighted in the report by the organization "Hope not Hate" mentioned in the Guardian article that examines "counter-jihad" organizations http://www.hopenothate.org.uk/counter-jihad/

This headline from the UK Telegraph says it all..."France elections 2012: Nicolas Sarkozy declared most unpopular president in history" http://www.telegraph.co.uk/news/worldnews/nicolas-sarkozy/9205652/France-elections-2012-Nicolas-Sarkozy-declared-most-unpopular-president-in-history.html

Photo: AFP/Getty
Meanwhile the crisis in Spain is on the minds of commentators like Paul Krugman: http://krugman.blogs.nytimes.com/2012/04/15/insane-in-spain/?smid=tw-NytimesKrugman&seid=auto
And George Soros explains the background for the crisis in Europe: http://www.businessinsider.com/george-soros-on-the-eurozone-crisis-2012-4
and I had to add this editorial from Paul Krugman for Monday's Times: http://www.nytimes.com/2012/04/16/opinion/krugman-europes-economic-suicide.html?_r=1&smid=tw-NytimesKrugman&seid=auto
...and Nouriel Roubini's http://www.slate.com/articles/business/project_syndicate/2012/04/the_eurozone_problem_s_will_get_worse_unless_they_adopt_a_growth_strategy_.single.html

This is too much for one day, but will be useful for my class - A nice report from the Economist on Germany's economic model: http://www.economist.com/node/21552567

Spain continues as today's top story - but stocks rebound

Stocks rebounded this morning, as reported in the New York Times: http://www.nytimes.com/2012/04/12/business/daily-stock-market-activity.html?_r=1

Spain's problems seem intractable - this is the first article I have seen that discuss a potential withdrawal from EMU: http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100016130/spanish-epiphany-as-depression-deepens/?utm_source=dlvr.it&utm_medium=twitter

More from Simone Foxman on Spain's troubles: hhttp://www.businessinsider.com/all-eyes-on-spanish-banks-2012-4ttp://www.businessinsider.com/all-eyes-on-spanish-banks-2012-4 

A day of upheaval for European markets

Markets tumbled in Europe today over concerns that Spain's borrowing costs were rising to unsustainable levels as reported in the New York Times: http://www.nytimes.com/2012/04/11/business/global/spain-bond-yields-rise-reviving-fears-of-a-renewed-euro-crisis.html?_r=1&adxnnl=1&adxnnlx=1334105000-daqlGimdCBOFOoG5i9JMZw

...and Business Week:  http://www.businessweek.com/articles/2012-04-10/spain-is-on-the-bleeding-edge-of-a-new-european-crisis

Simone Foxman of Business Insider characterized it as a day the markets got destroyed: http://www.businessinsider.com/european-markets-just-got-destroyed-2012-4

Financial stocks took a big hit: http://dealbook.nytimes.com/2012/04/10/european-bank-shares-take-a-nosedive/?ref=europeansovereigndebtcrisis

U.S. markets also ended lower, after falling on Monday due to a disappointing increase in employment levels.

Meanwhile, in the French election, the far left politician Jean-Luc Melenchon is polling a strong third, and may have an impact on the outcome for the top two candidates, incumbent Sarkozy and Socialist leader Holland: http://www.nytimes.com/2012/04/10/world/europe/in-french-elections-sound-and-fury-from-the-lefts-melenchon.html?_r=1&smid=tw-nytimesglobal&seid=auto

Holland is trying to maintain his lead while Sarkozy is running as an underdog: http://www.economist.com/node/21552246?fsrc=scn/tw/te/ar/climingmoutimprobbable