Friday, November 29, 2013

Germany, Ukraine and Immigration in Thanksgiving weekend headlines

German parties finalize coalition agreement
Looks like some interesting compromises have been made - including offering dual citizenship to Turks and others born and raised in Germany!

"Despite loud criticism from his party’s rank and file, Mr. Gabriel said he was confident that his members would back the agreement when the party vote concludes Dec. 14. Only then will the new cabinet ministers be named."

Commentary prior to this week's negotiations was rather pessimistic about the possibility of a coalition agreement being agreed to by the SPD rank and file:
Merkel’s Quest for Consensus
Titelbild

Ukraine's Battle for Europe

Summit Flop: EU Needs New Russia Policy after Ukraine Debacle

 
Cameron's commentary comes in the context of frustration over immigration policy change
 
Influx of EU workers sparks surprise rise in net migration


From the NY Times: Dispute Over Immigration Widens Between Britain and E.U.

 

 
 

Sunday, November 24, 2013

Nuclear Deal Reached with Iran, German Parties continue Coalition Negotiations

Iran nuclear deal tops the headlines on a cold and blustery Sunday in Austin, Texas:

Major Powers Reach Deal With Iran To Freeze Nuclear Program 



Catherine Ashton has played a key role in the negotiations
 
 

U.S. Secretary of State John Kerry (3rd R) hugs European Union foreign policy chief Catherine Ashton after she delivered a statement during a ceremony next to British Foreign Secretary William Hague (L), Germany's Foreign Minister Guido Westerwelle (R) and French Foreign Affairs Minister Laurent Fabius at the United Nations in Geneva November 24, 2013. REUTERS-Denis Balibouse
Meanwhile, Germany moves closer to a coalition deal, after the Bundestag election last September
 
 
Representatives of the Social Democratic Party (SPD) and representatives of the Christian Democratic Union (CDU) and of the Christian Social Union (CSU) attend coalition talks at the CDU headquarters in Berlin, November 21, 2013. REUTERS/Thomas Peter

Monday, November 4, 2013

"Can the Eurozone be Saved" Conference at the LBJ School of Public Affairs - Sessions 1 through 4

The first panel of the conference, "Is the European Crisis Over" was predictably pessimistic.  The consensus is that the crisis is definitely NOT over and that we may just be in the eye of the storm at the moment.  There is still the possibility of an end to the Euro, and current policies (or lack thereof) are exacerbating the crisis.  Panelists discussed issues surrounding the regime of the Eurozone and the inability of the EU countries to respond "snatching defeat from the jaws of victory" by pursuing neoliberal policies. Issues discussed included the lack of a Treasury partner, Iceland's much quicker recovery because of their ability to devalue their currency and that they did not bail out their banks.

The second panel, which I participated in, focused on issues related to labor, politics and the impact of austerity. Damon Silvers of the AFL-CIO discussed the situation for labor and labor unions.  He has observed that German leaders are dealing with the moral politics of the crisis within Germany, and that they don't care necessarily about their trading partners on the European periphery, they care more about China. He noted that, "countries that are doing the right thing are nonetheless going over the cliff" - and shouldn't we look at whether or not they are actually doing the right thing? This has been a recurring thing throughout the conference, and was emphasized by the macroeconomic data presented by Gustav Horn, who argues that current policy has been a failure in producing the desired outcome, reducing debt burdens.  Unemployment levels are unsustainable, and Greece has lost 25% of it's GDP since the crisis began. George Stathakis made a similar point, that the idea that "You can pay back your public debt through austerity" has been proven wrong. Greek unions no longer have collective bargaining. Later speakers would note that reducing wages might improve exports, but at the cost of domestic markets. The young and the unskilled have borne the brunt of loss of employment.

Yves Leterme of the OECD gave the keynote during lunch, talking about the need for reform in education, labor markets and training. In general he was more upbeat than other speakers about the future of the Eurozone, he feels that we are past the crisis and have reached a point of stability, given that the ECB has said that it will do whatever it takes to maintain the Eurozone.

In fact many are touting the success of austerity measures while unemployment is still rising and the young are being told that they must accept the loss of solidarity measure and lower their expectations. It remains to be seen if this will lead to a revolt by the young...

Here's the latest opinion piece by Wolfgang Munchau of the Financial Times:  http://www.ft.com/intl/cms/s/0/1ceb7c36-42e1-11e3-8350-00144feabdc0.html#axzz2jiJ1ZBNQ
File photo of the euro sign landmark outside the headquarters of the European Central Bank (ECB) in Frankfurt on September 2 2013

Saturday, October 12, 2013

Eurozone still in crisis...

Italy's government led by Prime Minister Enrico Letta survived a challenge from Silvio Berlusconi, but is still faced with budget deficits and is looking to sell off prime properties to raise funds:
http://www.dailymail.co.uk/news/article-2455543/Italy-sell-50-historic-sites-try-pay-government-debt.html
Historic: Orsini Odescalchi castle in the lakeside town of Bracciano, 27 miles from Rome, is up for sale

Hunger is becoming an issue for many who have lost jobs due to budget cuts:
http://www.presstv.ir/detail/2013/10/10/328709/43-million-people-lack-food-in-europe/
and some Greeks are living in caves:
http://www.euronews.com/2013/10/10/what-would-socrates-think-of-homeless-greeks-in-caves-today/
However, Ireland is set to exit the international bailout program:
http://www.abc.net.au/news/2013-10-13/ireland-poised-to-exit-eu-imf-bailout-program/5019064

More sad news as another ship filled with migrants from Africa sank near the island of Lampedusa:
http://news.yahoo.com/boat-believed-carrying-migrants-sinks-off-sicily-173055026.html;_ylt=A2KJ3CZkBFpSYjQAggTQtDMD

Will the Euro crisis lead to support for anti-EU parties in the 2014 EU Parliament elections?  The National Front in France appears to be surging:
http://euobserver.com/political/121724

Sunday, September 15, 2013

German Elections - Will the Free Democrats survive?

As Germany enters the final week of the election campaign, Bavarian state election gives the CDU/CSU a boost, but the FDP's poor showing may foreshadow national level issues:
http://www.nytimes.com/2013/09/16/world/europe/strong-showing-for-merkels-conservative-allies-in-bavaria.html

The Wall St. Journal focuses on the possibility of a grand coalition: http://online.wsj.com/article/SB10001424127887323527004579077163110377446.html

image

The Economist magazine endorses Merkel in advance of the September 22nd election: http://www.economist.com/news/leaders/21586343-german-voters-should-re-elect-angela-merkel-their-chancellorand-europes-leader-one-woman

Thursday, September 12, 2013

Germany and the EU, Barroso and the Tories, Syria

Analysts find that Germany doesn't have a clear strategy for moving Europe forward through the crisis - "muddling through":
German policy on Europe lacking say some experts | euronews, world news

But Commission President Barroso finds signs of economic recovery in the latest figures:
http://www.euronews.com/2013/09/12/barroso-figures-show-start-of-economic-recovery/
European Commission President Jose Manuel Barroso told MEPs that Euroscepticism could lead to the same divisions that sparked the Great War


Barroso had a tough exchange with the leader of the UK Conservatives in the European Parliament after his speech on the State of the European Union:
http://www.ft.com/intl/cms/s/0/07b0e41e-1acd-11e3-87da-00144feab7de.html

British Prime Minister David Cameron also had a few things to say about Barroso's comments regarding the Tories and UKIP:
http://www.reuters.com/article/2013/09/12/us-britain-europe-row-idUSBRE98B12D20130912Britain's Prime Minister David Cameron speaks at the Conservative Party's annual Spring Forum, in central London March 16, 2013. REUTERS/Suzanne Plunkett

Syria remains at the top of the headlines as the U.S. and Russia begin talks in Geneva regarding the disposition of Syria's chemical weapons, and Vladimir Putin writes to the American public:
http://www.bbc.co.uk/news/world-middle-east-24072799


http://www.nytimes.com/2013/09/12/opinion/putin-plea-for-caution-from-russia-on-syria.html?pagewanted=all&_r=0

Thursday, September 5, 2013

Europe and Syria, German elections

Syria is not only an issue for the U.S. - last week Prime Minister David Cameron who supports military action in Syria lost a critical vote in the UK Parliament.  This week he is criticizing MPs who voted against taking action, pointing to evidence that the Syrian government used chemical weapons against civilians:
Syria crisis: David Cameron attacks MPs who opposed intervention
Mr Cameron said he took personal responsibility for last week's Commons defeat over Syria.

Syria overshadows the G20 meetings in St. Petersburg, with Russia's President Vladimir Putin opposing intervention in Syria:
Divided G20 discusses Syria crisis in St Petersburg

German Election:

To be blunt, this has to be one of the most boring elections I have seen since I started following German elections in the 1990s. However, there have been some moments of interest, as the opposition Social Democrats (SPD) try to gain some traction as the election nears:
Germany's Merkel Taunts Opponents over Euro Crisis

However, the Economist captures the "banality" of this election:
Candidates debate and Germany's election campaign plumbs new lows

Wednesday, July 3, 2013

Notes from the Netherlands

I spent last week in the Netherlands, attending the Conference of Europeanists.  There were many excellent panels, particularly focusing on issues related to immigration, EU integration and the current fiscal crisis.  As I noted in my previous blog post, the crisis is hitting hard in the Netherlands, as can be seen in this representative picture of the shopping district in central Amsterdam:

 Many shops, including high-end designer boutiques, were advertising sales as much as 70% off, or as in this shop, 50% off.  As noted in this report by Bloomberg, the Dutch economy is contracting as consumer spending is down, and they suffer their third recession in four years. http://www.bloomberg.com/news/2013-06-25/dutch-economy-contracts-more-than-initially-estimated.html  The government is implementing an austerity package that will impact employment and retirees. 











On the brighter side, Amsterdam remains a beautiful city, Leaving the University of Amsterdam, I passed by the Hotel de L'Europe where the Amsterdam Treaty was signed. Being in Northern latitudes, the nights were long, but I managed to stay up late to see the lights on the canals.
 
 
At the train station, there was a diverse crowd, Amsterdam is a city of many cultures, including Indonesian -- we ate rajstafel a few times during the conference.
 
The Rijksmuseum is recently refurbished, and is a stunning display of Dutch art and history.


"Night Watch" is perhaps the most famous painting in the museum, and has it's own wall in the "Gallery of Honor"
 
I have a fondness for still life paintings -- this one was my favorite:


I also have a fondness for Dutch ceramics, and the museum had several displays of amazing artistry:




Sunday, June 23, 2013

The view from the Netherlands

I'm visiting the Netherlands for the annual Conference of Europeanists. I am lucky to have a nephew who lives in Rotterdam who hosted me over the weekend, then I'm off to Amsterdam tomorrow for the conference.  The Netherlands recently celebrated the investiture of their new King Willem-Alexander after the abdication of his mother, Queen Beatrix.
King Willem-Alexander and Queen Maxima prepare to leave after their investiture ceremony at New Church on April 30 in Amsterdam. 
The Netherlands has a reputation as a place of tolerance and a high standard of living. However, cracks have been appearing in that facade for a long time.  The Netherlands was once known as a place where multiculturalism was the rule, but the rise of politicians like Pim Fortuyn and Geert Wilders showed that the era of multiculturalism was at an end, as described in an article in Time magazine from 2011: http://www.time.com/time/world/article/0,8599,2080256,00.html


Cracks are also appearing in the Dutch standard of living. Fiscal austerity has hit the Netherlands hard, with small neighborhood businesses and homeowners often feeling the brunt of the budget cuts and loss of value in the housing market.  As noted in a recent article in the Wall Street Journal "With the euro-zone mired in its longest recession in decades, even the so-called core Northern countries are increasingly feeling the pain. ("Euro Zone Core Facing Budget Cuts")

More to come from Amsterdam later this week...


Tuesday, April 23, 2013

The EU, foreign policy and shrinking defense budgets

When Ashton, a member of Britain's Labour Party, took office three and a half...

Catherine Ashton criticized in new report: http://www.spiegel.de/international/europe/report-criticizes-eu-foreign-policy-chief-catherine-ashton-a-895933.html

NATO Secretary General raises concerns about cuts to defense budgets in Europe: http://www.nytimes.com/2013/04/23/world/europe/europes-shrinking-military-spending-under-scrutiny.html?ref=world

EU Defense ministers met this week to discuss the situation in Mali and to prepare for a donor conference: http://www.euractiv.com/development-policy/eu-ministers-prepare-mali-donor-news-519242

German Defense Minister says UK would jeopardize military standing if it leaves the EU  http://www.guardian.co.uk/world/2013/apr/22/uk-military-eu-german-minister

Serbia and Kosovo came to an agreement on a normalization of relations this past week which will allow the two countries to move forward in consideration for EU membership: http://www.eeas.europa.eu/top_stories/2013/190413__eu-facilitated_dialogue_fr.htm

Some context from Bloomberg: http://www.bloomberg.com/news/2013-04-23/kosovo-deal-shows-the-eu-deserved-its-nobel-prize.html


Monday, April 22, 2013

The Euro Crisis, Populism and Disparities

Beppe Grillo













An article in Public Service Europe argues that populism is making the Euro Crisis "more combustible": http://www.publicserviceeurope.com/article/3363/populism-making-euro-crisis-more-combustible

Meanwhile, a study on wealth in the EU came to the very surprising conclusion that Germans are some of the poorest in the EU: http://www.nytimes.com/2013/04/16/business/global/study-on-wealth-fuels-euro-crisis-debate-in-germany.html?pagewanted=all&_r=0


The Poverty Lie from Der Spiegel : http://www.spiegel.de/international/europe/poor-germany-it-is-time-for-a-debate-on-euro-crisis-burden-sharing-a-894398.html

German Chancellor Angela Merkel argued that the figures cited in the article were distorted: http://www.bloomberg.com/news/2013-04-19/merkel-says-german-wealth-gap-with-southern-europe-is-distorted.html

Meanwhile, the spring meetings of the IMF and World Bank led to calls for Europe to do more to spur growth in the flagging EU economies: http://www.nytimes.com/2013/04/22/business/global/europe-heeding-international-call-to-do-more-to-spur-growth.html

Sunday, April 14, 2013

Death of Margaret Thatcher brings tributes and jeers

Margaret Thatcher passed away Monday, April 8th, after a stroke.  The tributes began pouring in immediately after her passing was announced:
http://www.washingtonpost.com/blogs/post-politics/wp/2013/04/08/obama-and-others-mourn-margaret-thatcher/

The song "Ding Dong the Wicked Witch is Dead" from the movie "The Wizard of Oz" has flown off the shelves since her passing, creating a dilemma for BBC radio on whether they should play the song if it gets to the top of charts - this has led to a variety of responses:

http://www.huffingtonpost.co.uk/2013/04/12/ding-dong-thatcher-row-nigel-farage_n_3067496.html?utm_hp_ref=uk-politics

Meanwhile, the New York Times Editorial Board critiqued the current approach to the Euro crisis:
http://www.nytimes.com/2013/04/15/opinion/europes-bitter-medicine-of-austerity.html?_r=0

And to illustrate the point...a new Euro-skeptic party held its first party conference in Germany: http://www.telegraph.co.uk/news/worldnews/europe/germany/9993551/German-equivalent-to-Ukip-angry-at-Nazi-jibes-from-southern-Europe.html

Sunday, April 7, 2013

Cyprus to Portugal to Slovenia - from one crisis to another

Portugal's Constitutional Court President Joaquim Sousa Ribeiro (4th R) walks in front of members of the court as he arrives to address a news conference in Lisbon April 5, 2013. Portugal's constitutional court announced its ruling on this year's budget austerity measures on Friday. REUTERS/Hugo Correia (PORTUGAL - Tags: POLITICS BUSINESS)

The Portuguese high court has annulled several components of the Portuguese governments austerity budget, leading to a new crisis:
http://www.dw.de/constitutional-court-rejects-parts-of-portugals-budget/a-16724591

As a result the prime minister, Pedro Passos Coehlo, has proposed deep cuts in social security, health, education and public enterprises:
http://www.bbc.co.uk/news/world-europe-22058461

The European Commission issued a statement regarding the situation on Sunday:
http://www.businessinsider.com/europe-issues-sunday-night-statement-amid-new-situation-in-portugal-2013-4

Capitol controls continue in Cyprus, and there are ongoing concerns that they may still end up leaving the Euro zone: http://www.bbc.co.uk/news/business-22002153 

Meanwhile, Slovenia may be the next country needing a bailout, with the small country being compared to Cyprus: http://www.bloomberg.com/news/2013-04-07/slovenia-bailout-signaled-by-worsening-debt-swaps-euro-credit.html

It is a gloomy end to the weekend, and it will likely show in the markets this week: http://www.businessinsider.com/portugal-and-growth-cause-euro-gloom-2013-4

Treasury Secretary Jack Lew heads to Europe to push for growth policy: http://www.nytimes.com/2013/04/08/business/economy/in-europe-lew-will-press-for-more-growth-less-austerity.html 
 and more on Lew's trip:
http://www.cnbc.com/id/100621964

Tuesday, March 26, 2013

More on Cyprus and other blogs...

Yanis Varoufakis will be speaking to my European Politics class in April and I highly recommend his blog:  http://yanisvaroufakis.eu/

Another blog post on Cyprus lays out the good, the bad and the ugly:  http://finance.fortune.cnn.com/2013/03/26/cyprus-the-worst-is-yet-to-come/

An anti-bailout protest in Cyprus

Sony Kapoor looks at the positive side of the Cyprus deal:
http://www.guardian.co.uk/commentisfree/2013/mar/26/cyprus-bailout-eurozone?CMP=twt_gu

In the meantime -- Italian parties are still trying to form a government after last month's election:
http://blogs.wsj.com/eurocrisis/2013/03/26/italian-election-fallout-qa-continued/

Sunday, March 24, 2013

Update on Cyprus

Cyprus has made a last-ditch deal with the EU and IMF:

A report from Sunday night/Monday morning from CNN Money: http://money.cnn.com/2013/03/24/news/economy/cyprus-bailout-eu/index.html

The Guardian UK has updated coverage:
http://www.guardian.co.uk/business/2013/mar/24/eurozone-crisis-cyprus-bailout-eurogroup-meeting?CMP=twt_gu

German finance minister Wolfgang Schäuble talks to the press in Brussels.

Analysis is limited at this point, but the deal was made in such a way that it won't need approval from the parliament in Cyprus.  The deal focuses the "haircut" on deposits above 100,000 Euros, but the percentage is not yet know. Earlier on Sunday, ATM withdrawals were limited to 100 Euros per day, and it's not clear when banks will reopen. The new deal reportedly imposes capitol controls in order to avoid runs on banks.

Russia has many deposit holders in Cyprus, and the government may continue to play a role in the overall negotiations.  Meanwhile, Russians are looking to other options for their offshore holdings, as reported in the FT: http://www.ft.com/intl/cms/s/0/de24fb32-94a1-11e2-9487-00144feabdc0.html#axzz2OWE1ipQZ

Some commentary:

The Wall Street Journal's Simon Nixon:  http://online.wsj.com/article/SB10001424127887324789504578380473415855386.html

A Euro-skeptic perspective from the FT: " A eurozone that compromises countries as diverse as Germany and Cyprus is not sustainable, even if the EU and Cyprus manage to find a last-minute compromise."
http://www.ft.com/intl/cms/s/0/1c481838-92e3-11e2-b3be-00144feabdc0.html#axzz2OZ4Xsn7n

From the Guardian UK:
Will this be the end of Cyprus's problems?
'No. In fact, analysts say it is only the beginning. Cyprus has benefited for years from attracting the deposits of wealthy individuals from around the eurozone. That business model is now broken and the country has nothing to replace it with. Tellingly, the EU gave no economic projections for Cyprus in its statement.

Gary Jenkins of Swordfish Research said: "The economy is crushed for the next god knows how many years. As soon as people can take their money out the banks, they will take it out. Confidence has disappeared. Who's going to want to do business with Cypriot corporates right now?"'
http://www.guardian.co.uk/business/2013/mar/25/cyprus-bailout-deal-at-a-glance


Thursday, March 21, 2013

The crisis in Cyprus




An update with an article from the Economist: http://www.economist.com/news/leaders/21573972-bailing-out-cyprus-was-always-going-be-tricky-it-didnt-have-be-just-when-you

The situation is evolving as I write this blog post, but this is a very important and possibly dangerous development in the Eurozone.  Last week's EU summit began with a focus on jobs and growth, but would end with a focus on Cyprus. Reporting before the summit noted there appeared to be little pressure for action coming from financial markets as in an article by Reuters.

Negotiations over Cyprus debt began to hit the news by Saturday morning. Saturday evening, an off the record session of the Brussels Forum on the Eurozone crisis focused on the risk of a breakup of the Euro based on political factors.  The discussion quickly turned to the agreement on the Cyprus "haircut" which would affect all depositors. Some of the same issues which have come up in the media were discussed that evening, and were similar to the comments below:

"The latest proposal of the Eurogroup, regarding the bail out of Cyprus has caused unprecedented unrest that has not been limited to the national or even the European level. The essence of the proposal is for Cyprus to contribute a third of the overall €17 billion financial assistance required via a haircut in depositors’ money, including even the average account holder whose deposits do not exceed €100,000 (i.e. violating the guarantee offered to them in case of bank failure) . In the last Eurogroup meeting, the German finance minister, Wolfgang Schäuble, with the backing of his northern allies and with the blessing of those countries possibly envying Cyprus’s success as an international financial centre, cold-bloodedly blackmailed Cypriot officials with a ‘take it or leave it’ deal. Cypriot officials, though accused by some domestically for their negotiation strategy, at the end of the day had to decide within minutes on accepting a wide haircut on deposits (a red line for Cypriot negotiators, even considered to be a ‘stupid idea’ by the Finance Minister) otherwise the island’s second largest commercial bank would be instantly refused further emergency liquidity assistance and essentially be left to collapse, possibly taking down with it the whole economy."
http://blogs.lse.ac.uk/europpblog/2013/03/20/cyrpus-eurozone-crisis-germany/

It would seem strange that a country as small as Cyprus with a population of 1.1 million people could be the focus of the current crisis, but it has raised many issues around the whole debt crisis in Europe. The Cypriot Parliament refused to support the deal, and now are in a race against time to find a solution to the debt problem - for now banks are expected to be closed through next Tuesday, but there are concerns that people will run out of cash, and even the British government had to send cash for their soldiers, pensioners and diplomatic personnel based in Cyprus. 
http://money.msn.com/business-news/article.aspx?feed=AP&date=20130321&id=16262088&ocid=ansmony11

Concerns about Russian depositors has played a role in the drama, and the Cypriot government has attempted to work with the Russian government to help solve the crisis, but the Russian government has been reluctant to offer funds. There have been discussions of a Russian base or access to gas reserves.

http://www.google.com/hostednews/afp/article/ALeqM5jBrASOxV9_pE5mntSBHRXsozpbyQ?docId=CNG.5bc8b1a45bb0c242f36354fb6e5c6d02.141&index=0

The latest statement from the Eurogroup shows a major shift since last weekend, away from taxing deposits below 100,000 Euros:
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/136435.pdf

Protests have been ongoing since last weekend: