Europeans on this date in history:

1946 - birth of Udo Lindenberg, German pop music survivor.

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Exclusively Wednesday

I really don't know what to say to this:

Mr Noonan said adopting the treaty will send a signal out to Europe that the Irish are serious, committed people, and committed to the repair job required for the economy.

If we vote No, he said, Europe will move on and we will be left with less than full membership of the eurozone.

Insert golfing joke for his Bloomberg audience.

Wonder if he knows that Irish golf clubs seem to be begging for members at this stage?

Meanwhile, UK Independence MEP Nigel Farage, said ratification of fiscal treaty would result in an unacceptable loss of sovereignty for Ireland.

Why, thank you for coming over here to tell us how to look after our sovereignty.

Mr Farage was speaking as a delegate of the Europe of Freedom and Democracy group who are in Dublin today campaigning against the fiscal treaty.

Europeans on this date in history:

1830 - death of Joseph Fourier, Physicist (b. 1768)

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If you're feeling down in the dumps

How do to deficit reduction:

By the fourth quarter of the year, loans from the EU-IMF programme were €34.2 billion, almost 20 per cent of total liabilities. (Irish Times)

It’s working! In opposite land, the deficit is going down!

On the one hand, the news in Europe at the moment is pretty depressing: the amount of theological propagandra being emitted from our Most Serious Lords and Masters in order to browbeat the Greeks into appointing a suitable government and putting any other possibly rebellious states back in line is incredible. They worship the confidence fairies but they are willing to drastically undermine what confidence is left in the Euro in order to punish the heretics.

On the other hand, the narrative shows possible signs of turning. Hollande’s election, Merkel’s defeats in state elections, the Greek election and the increasing difficulty in hiding the divergence between religious dogma and reality seems as if it may cause the prevailing story - governments have to cut spending to save the economy - to change. When herd behaviours like the conventional wisdom change they often change quickly.

The problem is that even if the narrative does change and we suddenly come to our collective senses Europe will find itself in a very difficult place: face saving solutions that might have been sufficient a couple of years ago will probably not suffice.

Yanis Varoufakis has posted Version 3.0 of his Modest Proposal, which seems as good a proposal as possible for sorting the problems out as is available within the political constraints we’re facing. It has three threads

1. Deal with the banking crisis by creating a single European Banking Area that will directly recapitalise, supervise and resolve banks.
2. Deal with the sovereign debt crisis by turning their Maastricht Compliant Debt into ECB issued bonds.
3. Recycle surpluses through the European Investment Bank and the European Investment Fund funded by ECB bonds.

Which is all far too sensible for the Serious people.

Europeans on this date in history:

1618 - German astrologer Johannes Kepler confirms his previously rejected discovery of the third law of planetary motion

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Sing for your supper

Europe on this date in history:

1931 - Ådalen shootings: five people are killed in Ådalen, Sweden, as soldiers open fire on an unarmed trade union demonstration.

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Today the most populous German state, Northrhine-Westphalia (NRW), is holding snap elections.

The previous elections in 2010 were noteworthy for several reasons, in increasing order of importance:

• the emerging five-party parliament resulted in something unusual for Germany when Social Democrats (SPD) and Greens risked a minority government,
  
• In the campaign, to help her local comrades of the Christian Democrats (CDU), Chancellor Angela Merkel saw fit to employ xenophobic stereotypes against Southern Europeans, setting the tone of public discussion on the Eurozone crisis ever since;
  
• It was after these elections and this CDU loss that Merkel buried the tax cut dreams of her Free Democrat (FDP) coalition partners and chose austerity as both domestic and European signature theme.

Austerity was now a main campaign theme (more below the fold). The snap elections were the result of a mis-calculation by the opposition (see Snap elections in NRW by Katrin for details), as they came when the NRW SPD and Greens soared in the polls. Since then, the situation changed somewhat with the meteoritic rise of the Pirate Party, and a poll bump for the FDP that put them above the 5% limit again. Still, if the last polls are a good indication, red-green is likely to get majority: the SPD is at 37-38%, the CDU at 30-33%, Greens 10-12%, Pirates 7.5-10%, FDP 5-6%, and the losers of the election, the Left Party, at 3-4%. Update [2012-5-13 12:19:17 by DoDo]: exit polls indicate the CDU doing much worse and the FDP even better (see comments for the results).

The likely effects of the election: the SPD will be somewhat emboldened, federal environment minister Norbert Röttgen (CDU) who leads the CDU list will have to bury his dreams to succeed Merkel, and Merkel will 'suffer' another 'Pyrrhic defeat'.

Sunday evening talkaroo

Europeans on this date in history:

1940 - The German army crosses the Meuse as it invades France; Queen Wilhelmina of the Netherlands flees to Britain; Winston Churchill makes his blood, toil, tears and sweat speech to the House of Commons.

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How thumb is your green?

Yesterday (Friday, 11 May), the upper house of the German federal parliament, the Bundesrat, voted down a reform of the feed-in law that included drastic curbs in the feed-in rates for photovoltaic solar power. The law will now be subject to an arbitration between the two houses of parliament.

The Bundesrat decision was unexpectedly clear, with the representatives of several state governments led by the Christian Democrats (CDU) voting against rather than abstaining. This is likely to further diminish the chances of the CDU in tomorrow's snap elections in Northrhine-Westphalia state, with the Social Democrats (SPD) and Greens seizing on the opportunity to attack the CDU's leading candidate, who happens to be federal environment minister Norbert Röttgen.

Europeans on this date in history:

1982 - an ultra-conservative priest attacks and wounds Pope John Paul II with a bayonet in Fátima, Portugal.

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What else?

In his two last blog posts, Yanis Varoufakis (h/t Migeru) looks at two sides of the coin of the use of the Eurozone periphery as an object lesson to back opposing views:

Europe’s potential gains from a silent alliance between Paris and Athens « Yanis Varoufakis

Greece offers Mr Hollande a precious case in point. He can use it as an example of what happens when the EE insists that a bankruptcy is not a bankruptcy, and piles up huge loans and unbearable austerity on a national economy that can, simply, not bear it without collapsing into a heap. He can then argue, convincingly, that ‘staying the course’ is simply infeasible – quite independently of the political will of the local elites (recall how determined the Greek elites where to do so, until they were booted out last Sunday by a despairing electorate). Mr Hollande can conclude, from the Greek case, that Europe must find a new strategy that gives the deficit countries a sporting chance without asking of the Germans to bankroll any of the bad debts or the burgeoning deficits. For ideas of how this can be done, see here, here and here.

Fiscal austerity and structural reforms will drive economies over the cliff before any (hypothetical) positive results may occur. Fair point. But

A one-word explanation on why the eurozone cannot inflate its way out of trouble: Spain! « Yanis Varoufakis

...Spain’s insolvency (and Greece’s, Italy’s, etc.) is still seen by certain German policy makers as a golden opportunity to impose upon France (via the Periphery) their views on how things should be. You don’t need to take my word for this. Jens Weidemann said so in today’s FT piece (that I already quoted above):  “…relieving stress in the sovereign bond markets eases imminent funding pain but blurs the signal to sovereigns about the precarious state of public finances and the urgent need to act.”

Anyone want to be François Hollande?

Europeans on this date in history:

1997 - Deep Blue, a chess-playing supercomputer, defeats Garry Kasparov in the last game of the rematch, becoming the first computer to beat a world-champion chess player in a classic match format.

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