But you can't have a coordinated European effort if Europe's biggest economy not only refuses to go along, but heaps scorn on its neighbors' attempts to contain the crisis.
I think the same can be said about Europe politically. Until the day Europe speaks as one (if that ever happens), then the U.S., Russia, China, and other nations will be able to play one European nation off another and keep the region handicapped.
As Krugman points out, "America and the European Union have roughly the same G.D.P." Sure taken as a whole, but the nation states of European Union are not really united — at least compared to the states in the U.S.A. or even the provinces of Canada.
A united Europe would be an economic force to be reckoned with and a true rival for the U.S. dollar. Maybe the hollow American and British economies will help accelerate the push to unite Europe? It seems unlikely. Maybe in a generation or two Europe will be united, but not today.
Diplomatically war has already started, in the form of interference in the EU process - ask Ireland - and a constant stream of anti-EU (also anti-French and anti-German) 'news' in the business press.
It's not a hot war, but the US still sees the EU as a set of more or less compliant vassal states, and not as a true competitor.
That won't change for as long as that's also how the EU sees itself. And the US is more than willing not just to allow that self-image to continue, but to exploit divisions within the EU to make sure closer integration is unlikely.
Not that it makes a huge difference because the US elites and the EU elites are very similar.
But a social-democratic EU combining soft capitalism with bottom-up democracy and some measure of cultural cool would be a very bad thing for the US self-image.
As I see it, Europe is more likely to have a civil war than a war between the US and EU. Europe still has many currencies even within the EU and each nation state has its own economic policy. While the policies are constrained, somewhat, by the EU, that doesn't bode well for unity.
So when it comes to Europe, why wouldn't the US, China, Russia, or any other country play one European country off another? That seems to be what Europe does to itself.
European nations are in competition with each other as well as the rest of the world. From my perspective, Europe isn't comfortable with a united and common diplomacy, currency, economy, military, or leadership.
Then again in the US, the American states are still competing with each other too. As is evident by the failed US automaker bailout. Southern states with non-union, foreign-owned manufacturing, blocked the bailout of unionized, American-owned manufacturing of the Northern states. So, we may see a disintegration of the United states before we see a United Europe.
But of all the states interfering, the US is the most overt and obvious and the most damaging.
I don't see that as part of any grand strategic masterplan, so much as a dinosaur reflex - interfering in other countries and preventing bottom-up democracy is what the US does by default. It doesn't need a clear goal or strategy because for the US establishment in its current form, interference - political, diplomatic, rhetorical and military - is the only tool it believes it understands.
interfering in other countries and preventing bottom-up democracy is what the US does by default
If it is any consolation, we do this to ourselves too.
What Europe has, argues Mark Leonard in his provocatively titled book, Why Europe Will Run the 21st Century, is a model, one centered around a new understanding of power and embodied in the institutions and norms of the European Union. The EU exerts an irresistible attraction on the countries around it, Leonard says, drawing them into its orbit, embedding them in its legal and economic framework and changing them from the inside out. Next to this "transformative power," the United States' military might, which can change regimes but not societies, and whose application is necessarily fleeting, seems a weak instrument indeed. Increasingly, Leonard tells us, we'll see more regional groupings emerge bound, as the EU is, by mutual self-interest and common values. It's in this sense, he argues, that Europe--or, more precisely, the "European way"--will dominate the 21st century. Leonard is Director of Foreign Policy at the Center for European Reform in London, where he works on transatlantic and EU-China relations. He recently spoke with Mother Jones by phone from the UK. Mother Jones: As we're forever being told, the United States is the most powerful country in the history of the world and is likely to remain so, even as China rises, for the foreseeable future. But you're arguing that this view rests on a minsunderstanding of power. How so? Mark Leonard: My book isn't about Europe so much as it's about power, and how you go about getting your way and acting in the world. I'm not arguing that Europe will be the most vibrant economic bloc in the world or that it will have the biggest army; I'm saying that the European way of doing things, the European model, will change the way the world works. What we're coming to realize is that the classic 19th century idea of power is coming unstuck in an interdependent, globalized world. In this world, military power is still important, but it's becoming less so, and the price for using it is much higher than before, as the US has found in Iraq. MJ: So what kind of power does Europe have, by contrast? ML: Europe has what I call "transformative power," the power to change countries from within. First of all, the EU is not a superstate or an empire; it's a sort of decentralized club. It has developed the biggest single market in the world, and it can offer other countries trade and aid and all the carrots that major powers have been able to dangle in the past. Secondly, the EU projects power not by threatening to invade other countries but by threatening to exclude them from its benefits--either from being members of the club or from being engaged with the club in some way. And thirdly, the power of the EU is embedded in law. To join the European club you have to adopt 80,000 pages of laws, stored in 34 volumes, which govern everything from human rights and the protection of minorities to the composition of tomato ketchup. And that sort of legal power allows you to transform not just the regimes in other countries but the whole of their societies. You can see that with countries like Turkey and the Balkans, which are completely changing the way they're governed so as to meet EU membership criteria. That's very different from military power, which lasts only as long as your troops are on the ground. http://www.motherjones.com/news/qa/2005/10/mark_leonard.html
Leonard is Director of Foreign Policy at the Center for European Reform in London, where he works on transatlantic and EU-China relations. He recently spoke with Mother Jones by phone from the UK.
Mother Jones: As we're forever being told, the United States is the most powerful country in the history of the world and is likely to remain so, even as China rises, for the foreseeable future. But you're arguing that this view rests on a minsunderstanding of power. How so?
Mark Leonard: My book isn't about Europe so much as it's about power, and how you go about getting your way and acting in the world. I'm not arguing that Europe will be the most vibrant economic bloc in the world or that it will have the biggest army; I'm saying that the European way of doing things, the European model, will change the way the world works.
What we're coming to realize is that the classic 19th century idea of power is coming unstuck in an interdependent, globalized world. In this world, military power is still important, but it's becoming less so, and the price for using it is much higher than before, as the US has found in Iraq.
MJ: So what kind of power does Europe have, by contrast?
ML: Europe has what I call "transformative power," the power to change countries from within. First of all, the EU is not a superstate or an empire; it's a sort of decentralized club. It has developed the biggest single market in the world, and it can offer other countries trade and aid and all the carrots that major powers have been able to dangle in the past. Secondly, the EU projects power not by threatening to invade other countries but by threatening to exclude them from its benefits--either from being members of the club or from being engaged with the club in some way. And thirdly, the power of the EU is embedded in law. To join the European club you have to adopt 80,000 pages of laws, stored in 34 volumes, which govern everything from human rights and the protection of minorities to the composition of tomato ketchup. And that sort of legal power allows you to transform not just the regimes in other countries but the whole of their societies. You can see that with countries like Turkey and the Balkans, which are completely changing the way they're governed so as to meet EU membership criteria. That's very different from military power, which lasts only as long as your troops are on the ground.
http://www.motherjones.com/news/qa/2005/10/mark_leonard.html
Are 80,000 pages of laws the best way to adapt to a planet with a changing climate? Or does it lock Europe into a regulatory hell that prevents it from being able to adapt? (For example: standardized vegetables and sanitary factory farms in Poland.)
What would be interesting is if the "transformative power" would be extended to say North Africa, Southeast Asia, or Latin America. And then how really is "transformative power" much different from a reboot of tweaked colonialism?
EU's membership "transformative power" seems limited to its neighbors not rich or powerful enough to go it alone.
Well of course, what neighbouring country could "go it alone" today ? Even the US is realising it needs friends.
I still am waiting to see how well Club Europe embraces its Roma and Muslim populations. Whether EU regulations tilt to favor corporations or small producers.
OK, so you're waiting; in the meantime it might help if you read the whole article, e.g.:
ML: I don't think there's a universal move against immigration. Over the past few years there's been an attempt to create channels for legal, economic migration. There has been a backlash in some countries, and especially in countries where there have been terrorist attacks. It is a problem for Europe that, unlike the US, the idea of being a nation of immigrants isn't part of the national myth of any of the member countries, but there are hopeful signs. If you look at the big metropolises, like London, there is a very high level of integration, and most people see that diversity as a source of strength. And other countries, such as Ireland or Sweden, you've gone from having a very homogeneous population to an extremely heterogeneous one, without a big backlash. I think a lot of it depends on public policy and how you manage it -- what kind of stories politicians tell, what kind of policies are used to integrate people, give them language tuition, work with citizen education, and so on.
Well we've seen what hell a lack of regulation created in the US and spread to the rest of the world:
MJ: It also assumes the countries outside the system are actively choosing to change, rather than having change imposed upon them. ML: Exactly. One of the key reasons the EU is less threatening than great powers in the past is that when it deals with diversity, as in so many other areas, it's reacting violently against many of its own mistakes in the past. It's a post-imperial superpower. During the imperial period, Europeans did have this idea that there was a single sustainable model of human progress, and they sought to impose it forcibly upon people around the world. The EU has a way of accommodating and nurturing diversity in a liberal way. It has a set of norms that are essentially about respecting difference--the rule of law, human rights, etc., which it embodies in its relations with other countries. MJ: You write in the book that a key factor in the EU's success is its "invisibility," the fact that it's virtually never experienced directly. ML: Yes, it works through national parliaments and national governments. The central bureaucracy of the EU is skeletal; it's smaller than most city councils. And all the policies are implemented by national governments or sub-national governments--local councils and regional bodies--rather than by the EU itself. That has meant that people generally haven't felt that the EU was some sort of imperial project that was destroying their national governments or their country as a national entity.
ML: Exactly. One of the key reasons the EU is less threatening than great powers in the past is that when it deals with diversity, as in so many other areas, it's reacting violently against many of its own mistakes in the past. It's a post-imperial superpower. During the imperial period, Europeans did have this idea that there was a single sustainable model of human progress, and they sought to impose it forcibly upon people around the world. The EU has a way of accommodating and nurturing diversity in a liberal way. It has a set of norms that are essentially about respecting difference--the rule of law, human rights, etc., which it embodies in its relations with other countries.
MJ: You write in the book that a key factor in the EU's success is its "invisibility," the fact that it's virtually never experienced directly.
ML: Yes, it works through national parliaments and national governments. The central bureaucracy of the EU is skeletal; it's smaller than most city councils. And all the policies are implemented by national governments or sub-national governments--local councils and regional bodies--rather than by the EU itself. That has meant that people generally haven't felt that the EU was some sort of imperial project that was destroying their national governments or their country as a national entity.
His general point is this type of model is likely to spread more widely:
That has meant that people generally haven't felt that the EU was some sort of imperial project that was destroying their national governments or their country as a national entity.
Except for the British. ;-)
And so people have started to ask more questions about its legitimacy--partly mistakenly, I think, because while it is important, obviously, for political systems to be legitimate, it's wrong to compare the EU with a nation state, because you're never going to have to pay taxes to it. The amount of money that goes to the EU is barely one percent of European GDP, compared to 40 percent or more for EU countries. And nobody's ever going to have to fight in a European army, or die for it, so it's wrong to think it should have the same standards of legitimacy that the British government or the French government have. But at the same time, as we've seen in France, Spain and the Netherlands too many people have a sense that Europe is something that's done to them rather than something they can control. MJ: How can the EU counter that perception? ML: What has always helped the EU are crises, when people are afraid of losing what they have at the moment. The EU isn't the result of a brilliant plan for the future that everybody signed up to. All of its energy has come from negative events, to escape from the Second World War and the Holocaust, above all, of course, but every significant step along the way has stemmed from a more minor failure. In terms of the EU's relationship with its citizens, things like the defeat of the French and Dutch referenda are a powerful wake-up call to national governments that they can't really afford to continue making decisions in the way they have been. There's a good quote in the book from Douglas Hurd, a former British foreign secretary, who said "What we do is we act now and legitimate it later." The EU acts and sometimes forgets to legitimate it at all. I think that model of European integration has run its course.
MJ: How can the EU counter that perception?
ML: What has always helped the EU are crises, when people are afraid of losing what they have at the moment. The EU isn't the result of a brilliant plan for the future that everybody signed up to. All of its energy has come from negative events, to escape from the Second World War and the Holocaust, above all, of course, but every significant step along the way has stemmed from a more minor failure. In terms of the EU's relationship with its citizens, things like the defeat of the French and Dutch referenda are a powerful wake-up call to national governments that they can't really afford to continue making decisions in the way they have been. There's a good quote in the book from Douglas Hurd, a former British foreign secretary, who said "What we do is we act now and legitimate it later." The EU acts and sometimes forgets to legitimate it at all. I think that model of European integration has run its course.
Do I have to read the whole bloody thing for you ? :-)
Yes. It helps. :)
Anyway... regarding this particular passage:
What has always helped the EU are crises, when people are afraid of losing what they have at the moment.
Isn't that the mechanism used with disaster capitalism? So what tempers Europeans from the full neoliberal shock doctrine practiced by the U.S.?
Is there some meme of European exceptionalism developing?
When a new crisis takes place, government acquires new functions. Arguably government should lose those new functions when the crises has passed, but on the other hand you want to retain the ability to tackle the same kind of crisis should it happen again in the future.
The problem with the neoliberal shock doctrine is not the use of crises as an opening to achieve political objectives, it is that the ideology behind the push and the objectives sought are toxic. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
We have government to deal with crises, which is when coordinated action is necessary.
Personally, I think it is a failure of government that allowed this financial crisis in the first place. The financial system is within their control and they shirked their responsibility and created a situation that ended in crisis.
So the response all depends on the motivation of those in government? In the U.S. model, people aren't the ones to be helped in a crisis. Rather the U.S. government is protecting some favored corporations and the rich.
European governments are, I take it by the comments, doing something substantively different, I suppose.
Which brings me back to the quote I originally pulled. At least as I read Krugman's essay, the European governments aren't acting in concert and that is part of the problem.
Instead, some countries are looking to go their own path. Whether or not this is to gain from the financial mismanagement or misfortune of other nations isn't the point, I think, but rather it defeats the idea of European union or, perhaps more importantly, solidarity.
Oh, that goes without saying. When you hand the government to people who don't believe in government for 30 years, bad things are bound to happen. They actually applied the "we don't need government until there's a crisis" argument. And the crisis was a colossal failure of banking regulation. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
what i wonder is what would happen if the rest of europe saw the wisdom of the german model and all started to back off the bubblicious, and start saving again.
for sure some of the economy would temporarily contract, but denial about that phase of economic cycles (if they exist, lol!) is what caused the problem in the first place.
i also don't like the scorn heaped, it will provoke the kind of national complex that will leave germany angry, hostile, and BIG.
historically, this is not a pretty prelude to anything good for europe.
saving more is good for banks, and since the rest of society's need seem to rotate around theirs anyway, what's not to like?
if banks do their job, and don't devolve into corrupt casinos, then savings are invested into solid, sustainable projects like J's windfarms, evryone wins, as is proved by the smaller, non-delusional banking industry, which is thriving, as it should, under justice for all.
i really hope obama gets this.
i equally really fear he doesn't. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
Which brings me back to the quote I originally pulled. At least as I read Krugman's essay, the European governments aren't acting in concert and that is part of the problem. But you can't have a coordinated European effort if Europe's biggest economy not only refuses to go along, but heaps scorn on its neighbors' attempts to contain the crisis. Instead, some countries are looking to go their own path. Whether or not this is to gain from the financial mismanagement or misfortune of other nations isn't the point, I think, but rather it defeats the idea of European union or, perhaps more importantly, solidarity.
I'm not going to do the reading for you if you're just going to ignore it and start repeating yourself. OF COURSE not all EU governments agree about everything, not even about major issues like the current crisis. THAT IS TO BE EXPECTED; THEY DEVELOPED INDEPENDENTLY OVER CENTURIES AND, GIVEN THE DIVERSITY THE MODEL ALLOWS, THEY HAVE DIFFERING PARTICULAR INTERESTS. But, given that long and often bloody history, the co-operation already achieved is remarkable and the model (even though not perfect) is likely, for the reasons he gives - see QUOTATIONS above - to be more successful than the US's neo-imperialist one. Now let's try to go on dialectically - to higher levels - rather than just repeating yourself - and making me do so - till it sinks in :-) Maybe it's because I'm a Londoner - that I moved to Nice.
Interference from the EU keeps wrecking good systems Norwegians have had for years, and the EU is therefore viewed by many as an 'empire' whose rules we are forced to follow.
The present battle is about the guarantees on bank deposits. Norway is now asked (forced?)to reduce their present level (2 mill. NoK, which has been in place since the bank crises in the 90's) to the level recently set by the EU countries.
No wonder the 'no' side in Norway does not even have to do anything to see their numbers grow :-)
Link? Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
EU-parlamentets finanskomité gjør det enda vanskeligere. EU-parlamentet vedtar denne uken etter alt å dømme et forslag fra EUs finansministre om et nytt direktiv som setter et tak på slike innskuddsgarantier på 100.000 euro. Det kan bety at den norske regjeringen må kutte i sin garanti på 2 millioner kroner, tilsvarende 225.000 euro, når direktivet tas inn i EØS-avtalen.
EU-parlamentets finanskomité gjør det enda vanskeligere.
EU-parlamentet vedtar denne uken etter alt å dømme et forslag fra EUs finansministre om et nytt direktiv som setter et tak på slike innskuddsgarantier på 100.000 euro.
Det kan bety at den norske regjeringen må kutte i sin garanti på 2 millioner kroner, tilsvarende 225.000 euro, når direktivet tas inn i EØS-avtalen.
I'll look for an English version, but here is the front page of Dagens Næringsliv. A veto is suggested...the minister is fuming...
Directives don't apply to EEA countries, and they don't lower standards.
I call eurosceptic bullshit press reporting. I'll check the EU Parliament Finance Committee website in the meantime. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
If a European bank fails, citizens' savings should be guaranteed up to €100,000, said the Economic and Monetary Affairs on Monday, endorsing a Commission proposal to raise the deposit guarantee to this amount. The committee also proposed that holders be given faster access to their deposits in emergencies and that a mechanism be established for cross-border cooperation in the event of another economic crisis. The committee approved a report by Christian Ehler (EPP-ED, DE), which, if approved by Parliament in plenary session, would amend existing legislation on deposit guarantee schemes and raise the guarantee level in the event of deposits being unavailable. The report also modifies the deadline for payouts and proposes setting up an emergency fund. Agreement to raise the deposit guarantee level Committee members approved the Commission proposal to raise the level of guarantee to at least €50,000 when the new legislation enters into force and to €100,000 by the end of 2009. They considered the current level of protection, set at €20,000, to be inadequate for a large number of deposits in the EU. The committee nonetheless amended the proposal so that the increase will take effect unless a Commission impact assessment, to be ready by April 2009, suggests it is not financially viable for all Member States. Faster payouts and an early warning system for future crisis The committee also agreed to reduce the payout period, in the event of deposits being unavailable, from three months to 14 days. MEPs also called for a payment of at least €1,000 to be made available to the depositor for emergency needs within three days. MEPs asked the European Commission to propose, by the end of 2009, a series of measures and procedures to ensure co-ordination among all Member States in the event of another cross-border financial crisis. This proposal should include provisions for a more effective early warning system for risks, they add. If the new legislation is endorsed at Parliament's Strasbourg plenary session and subsequently by the Council, Member States will be required to bring it into force by 31 December 2008 at the latest.
The committee approved a report by Christian Ehler (EPP-ED, DE), which, if approved by Parliament in plenary session, would amend existing legislation on deposit guarantee schemes and raise the guarantee level in the event of deposits being unavailable. The report also modifies the deadline for payouts and proposes setting up an emergency fund.
Agreement to raise the deposit guarantee level
Committee members approved the Commission proposal to raise the level of guarantee to at least €50,000 when the new legislation enters into force and to €100,000 by the end of 2009. They considered the current level of protection, set at €20,000, to be inadequate for a large number of deposits in the EU.
The committee nonetheless amended the proposal so that the increase will take effect unless a Commission impact assessment, to be ready by April 2009, suggests it is not financially viable for all Member States.
Faster payouts and an early warning system for future crisis
The committee also agreed to reduce the payout period, in the event of deposits being unavailable, from three months to 14 days. MEPs also called for a payment of at least €1,000 to be made available to the depositor for emergency needs within three days.
MEPs asked the European Commission to propose, by the end of 2009, a series of measures and procedures to ensure co-ordination among all Member States in the event of another cross-border financial crisis. This proposal should include provisions for a more effective early warning system for risks, they add.
If the new legislation is endorsed at Parliament's Strasbourg plenary session and subsequently by the Council, Member States will be required to bring it into force by 31 December 2008 at the latest.
Here you can check all the steps of the approval of this directive amendment. As I said above, I'd be shocked if the existing Norwegian deposit guarantee were compatible with Directive 94/19/EC and not with the amendment. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
Now, if the Norwegian guarantee of €225k was compatible with the existing EU legislation mandatind a €20k guarantee, it must be compatible with an amended legislation mandating a €100k guarantee, surely?
Yes, you should think so, but that is not the message Ms Halvorsen got in Brussels. And she is not amused.
The European Commission has put forward a revision of EU rules on deposit guarantee schemes that puts into action the commitments made by EU Finance Ministers on 7 October. The new rules are designed to improve depositor protection and to maintain the confidence of depositors in the financial safety net. Under the new rules, the minimum level of coverage for deposits will be increased within one year from €20,000 to €100,000, and initially to €50,000 in the intervening period. Individual Member States can choose to add to these minimum levels. In addition, the payout period in the event of bank failure will be reduced from three months to three days. The proposal now passes to the European Parliament and the Council of Ministers for consideration.
3. This Directive shall cover depositors who are natural persons and small and medium-sized enterprises. This Article shall not preclude the retention or adoption of provisions which offer a higher or more comprehensive cover for deposits.
So, the possible loopholes I identified in the explanatory memorandum and the "whereases" were actually closed by the Ehlers' proposal.
Now, in the Amendments to the proposal there is the following:
(2a) While the Directive 94/19/EC currently allows considerable scope for Member States to develop systems which are best suited to their market conditions, differences between the guarantee levels afforded to depositors across the Member States create difficulties under crisis conditions, inter alia because they cause competitive distortions and destabilising effects as regards the need to ensure a high level of financial stability within the European Union.
(2b) In the event of a cross-border EU banking crisis, full harmonisation at EU level as regards coverage level is required in order to avoid depositors facing different levels of protection. Such harmonisation would also avoid competitive distortions between banks, while maintaining depositor confidence.
(3) ... In order to maintain depositors' confidence and greater stability on the financial markets, the minimum coverage level should be increased to a fully harmonised coverage level.
It is important to get a full harmonisation of the coverage level in order to prevent arbitrage and more market distortions.
By 31 December 2009, coverage shall be increased to EUR 100 000 and fully harmonised, in the event that a Commission impact assessment, submitted to the European Parliament and the Council by 31 March 2009, concludes that such a harmonised increase is required and is financially viable for all Member States in order to ensure consumer protection and financial market stability.
The question is whether these amendments passed. The EP's Legislative Observatory has a version of the text dated December 10 (2 days after the committee meeting) which I therefore presume is the version that will be put to a vote before the parliament and I can find no trace in it of "full harmonisation". Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
... Therefore, the Directive should be revised in three key areas: Increase of the minimum coverage level Reduction of the payout delay to a maximum of 3 days Termination of co-insurance
5.3. Coverage level The current minimum coverage level is set at EUR 20 000 with the option for Member States to determine a higher coverage. However, this does not reflect the current average deposits of approximately EUR 30 000 per EU citizen. In order to maintain depositors' confidence, the coverage level should be raised significantly. The Council of the European Union agreed on 7 October 2008 that all Member States would, for an initial period of at least one year, provide deposit guarantee protection for individuals for an amount of at least EUR 50 000, acknowledging that many Member States determine to raise their minimum to at least EUR 100 000. Therefore, the minimum coverage level should be first raised to at least EUR 50 000 and, after one year, to at least EUR 100 000. According to estimates, about 65% of eligible deposits are covered under the current regime. The new amounts would cover an estimated 80% (with coverage of EUR 50 000) and 90% (with coverage of EUR 100 000) of deposits. Changes of the coverage level should be subject to the standard comitology procedure. However, in emergency situations, prompt action, coordinated across the Community, would be needed to increase the level of coverage to address any sudden loss of depositor confidence. Therefore, an emergency comitology measure is critical. Such emergency measures should be restricted to 18 months.
There is some potentially worrisome language in the "explanatory memorandum":
There is evidence suggesting that the competitive distortions created by different national measures are having a real and disturbing impact on deposit taking.
(12) Since the objectives of the proposed action, namely the harmonisation of coverage levels and payout delays, cannot be sufficiently achieved by the Member States because it requires the harmonisation of a multitude of different rules existing in the legal systems of the various Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.
The €225k limit might be construed as a competitive distortion with an impact on deposit-taking.
That is what the article claims the EU is afraid of. Ireland is mentioned, of course.
You could not have EU citizens putting their money in Norwegian banks, could you...?
So maybe the minister is raising a stink to make people aware that Norway does have a higher deposit guarantee and to attract deposits to Norwegian banks. Irish bank executives went on UK radio to brag about their new government guarantee and encourage people to move their deposits.
So, the Norwegian minister might actually be engaging in a bit of market manipulation since she couldn't expect that i would go and actually read every version of the friggin' legislation to prove her wrong. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
She is not that type of person - a (very) left wing finance minister with a strong sense of fairness is my impression.
Migeru:
So, the Norwegian minister might actually be engaging in a bit of market manipulation since she couldn't expect that i would go and actually read every version of the friggin' legislation to prove her wrong.
Market manipulation? In that case she has failed miserably...it has not even been mentioned in the English speaking press.
I am sure that on her part it is about not reducing the rights Norwegians have had for a long time. It is as simple as that, I believe.
We shall see when it gets to vote in the EU parliament - she said it was too early to talk about a veto, but I would not rule it out if the decision there goes in the wrong direction.
Norwegians would not take a reduction in bank guarantees lightly. It would create a very difficult political situation.
It borders on a pro Euro religious fanaticism diametrically opposed to the anti Euro fanaticism discussed in this thread.
She said
"Norwegians would not take a reduction in bank guarantees lightly"
That is a fact. She did NOT say there had been one, and is full of admiration at Migeru's forensic ability at getting to the truth of it.
Nor is the minister "full of shit", I think, but she is trying to ensure that Norway's position is not compromised. The article makes clear that nothing has been decided.
Pick on somebody your own size, Jerome. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Solveig also put her character judgement of the minister over my forensic evidence, by all accounts in this thread so far.
There is no pro-Europe fanaticism in this thread. Bullshit was called on the press and the politicians, and evidence was presented to back the call. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
Halvorsen forsvarer innskuddsgarantien (Makro og politikk )
I Norge har man mye bedre garanti for innskudd enn i de fleste EU-land. Etter finanskrisen har det nylig gått opp for EU at dette kan skape konkurransefortrinn for enkelte banker. Grunnen til dette er at innskyterne ønsker å plassere penger i banker med god sikkerhet, skriver Dagbladet.
- to make sure that the Norwegian guarantees would not have to be reduced.
This is called 'participation in the process', I believe. She did not say that they will be lowered, but that she was there to make Norway's views heard.
The article I first linked to does not state that a decision has been made on the guarantees. (But there is a hint that particularly the Swedes would like to see a cap on these - there are many Norwegian banks in Sweden, of course).
I seems that both you and Jerome have an uninformed view of the Norwegian main stream press. It is not particularly anti-EU. The papers I read tend to be on the 'Yes' to EU side.
I don't think the Norwegian attitudes towards the EU are all that different from the Danish or Swedish ones, by the way. And even the pro-EU press in EU Member states consistently misreports the EU political process, especially when the "national interest" gets involved.
Finally, you might want to do us the courtesy of doing a rough translation of Norwegian press snippets when you post one. I can probably read Norwegian at the level of a 4 year old, but most others on the site are not so fortunate. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
You asked for a link, and I looked for an English version, but could not find one. I would have translated if I had known where it would lead...:-).
Normally, as you know, the few times I do make a comment, I find an English version for the benefit of non-Norwegian speakers.
A reminder that zero ratings should be used very carefully - see the FAQ:
The main use of the system is to hide comments from trolls, i.e. needlessly provocative, insulting or personal, and NOT to go into silly ego wars when commenters downrate each other. Remember, ratings should not be used to express disagreement with a comment, but only to flag aggressivity or provocative words.
The use of zero ratings in this thread has been unwarranted (a 2 would have sufficed in making your feelings known), especially given that others challenged the tone of some comments without resorting to abusing the ratings system, and that an apology has been given. Ad astra per aspera
Interference from the EU keeps wrecking good systems Norwegians have had for years, and the EU is therefore viewed by many as an 'empire' whose rules we are forced to follow. The present battle is about the guarantees on bank deposits. Norway is now asked (forced?) to reduce their present level (2 mill. NoK, which has been in place since the bank crises in the 90's) to the level recently set by the EU countries. No wonder the 'no' side in Norway does not even have to do anything to see their numbers grow :-)
The present battle is about the guarantees on bank deposits. Norway is now asked (forced?) to reduce their present level (2 mill. NoK, which has been in place since the bank crises in the 90's) to the level recently set by the EU countries.
there is the weasely "is viewed by many" for the empire claim, but there is no such qualification for EU "keeps wrecking good systems": I think my words were even tamer than what Solveig used.
Look, it's fine to be euroskeptic, just don't expect any sympathy when you bring up stuff which is obviously false, or that basic research, as demonstrated by Mig, can easily prove to be wrong, especially when you hide behind "but she's someone I like" as a defense.
I'm sure you'll say that there are other real examples of EU imposing horrible rules that are destroying the way of life of the Norwegians. But it's so easy for a small country to freeride on the EU and then moan that its very independance is threatened at every turn. All I can say is: enjoy the luxury, don't expect sympathy. In the long run, we're all dead. John Maynard Keynes
Jerome a Paris:
when you bring up stuff which is obviously false, or that basic research, as demonstrated by Mig, can easily prove to be wrong, especially when you hide behind "but she's someone I like" as a defense.
If you read the thread, Mig has not proved anything that was not already in the article I unfortunately did not translate - it states that the final decision has not yet been made - and that is the conclusion Mig came to, as well, if I read him correctly.
I also linked to another article on the topic from 4 December, where it states that the minister was in Brussels to make sure Norway can keep its guarantees - in other words, she went to participate in the EU decision-making process. Why would she bother about travelling to Brussels if there was no possibility Norway could be obliged to reduce its guarantees?
especially when you hide behind "but she's someone I like" as a defense.
Here you go again, Jerome: you assume things about me - in this case that `I like her'...
For your information: I do not `like' or `dislike' people I do not know. But I do observe. With regard to politicians, I look at their policies, and the way they conduct themselves in the public sphere. In the case of this particular minister, I have observed her for several years, and she has done a decent job without meeting too much criticism from any political faction. For a (very) left wing finance minister, that is a feat, I would say.
From what you write in many of your articles, I believe you would approve of how she handles the Norwegian economy given the constraints within which she must act. In fact, from what you write, it seems that many of the economic policies that you promote are similar to the ones the Norwegian government has in place, or follows.
In other words: many of the policies you promote for the EU - for instance, routine nationalisation of delinquent banks - are for a large part in place in Norway.
To me, it is ironic to read your EU policy suggestions on the one hand, and experience your fierce antagonism when I argue that some of the EU policies Norway has agreed that it will follow IMHO are negative for the country.
I'm sure you'll say that there are other real examples of EU imposing horrible rules that are destroying the way of life of the Norwegians. But it's so easy for a small country to freeride on the EU and then moan that its very independance is threatened at every turn. All I can say is: enjoy the luxury, don't expect sympathy.
Yes, Jerome, you are right on this one: I could mention several `horrible rules' (although I would not express it in that way) that Norwegians would rather be without. For instance in relation to property rights, ownership of public assets, and private sector access. Ironically, they are more or less exactly the same as those you wish the EU to change!
When you mention 'freeride', I think you are on thin ice. The EEA agreement is certainly not free, either in money terms or in societal/community terms.
And be sure about one thing: I do not expect 'sympathy' for my views. I do, however, expect a civilised dialogue - particularly on matters upon which we do not necessarily fully agree. It is my view that there is a distinct absence of that on ET, whenever an unconventional or outside view of the EU is expressed, even lightly in an Open Thread, as in this case...!
Apology accepted, and I apologise for the harshness of the last sentence in my previous post...
Secondly, I wonder what you really know about my prejudices? I'm sure I have some, but you do not know me well enough to point them out.
Many of the EU policies I believe you would like to see, have been embedded in Norwegian society for a long time. When I read some of your 'laments', I agree with you, and I am glad Norway still have half a chance to keep what is best in their society. But we can only hope to do that outside the EU in my opinion. Inside, we would be swamped.
Lastly, re your statement about the minister - you obviously know nothing whatever about her, her views, policies or capabilities.
(They tell different lies in different markets.)
There is one interesting twist about straight bananas that so amuse British Eurosceptics. Apparently the Spanish oranges which are too deformed or small to be sold as 'Class A' or whatever under EU rules get shipped to Croatia. I don't want to know how crooked or undersized the bananas they get are. One of the benefits of EU accession for Croatians will be that the quality of their imported produce will improve, or the crap we sell them now will have to be marketed as sub-standard. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
I'm waiting for somebody to post a Daily Mail article about Britons forced by Brussels to eat curly bananas and undersized oranges in Croatian holiday hell.
That would make an excellent April Fools' Day story... Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
It is a problem for Europe that, unlike the US, the idea of being a nation of immigrants isn't part of the national myth of any of the member countries, but there are hopeful signs.
That's just so false. In the long run, we're all dead. John Maynard Keynes
I still am waiting to see how well Club Europe embraces its Roma and Muslim populations.
Europe does not have "Muslim" populations. It has North African, Turkish, African or East Asian immigrant groups, with wide variations within. These arrived over the past 30-40 years, so it's hard to expect them to be fully integrated already, or to have elected members already, given htat their adult age representatives are often poor uneducated immigrants.
And it's just plain false that no European country does not have a history of immigration - and successful integration. France comes to mind...
Tell that to Mexico. Don't forget that Spain, Portugal or Greece were not seen as "normal" European countries 25 years ago. That they are part of the core is not unsignificant and not a minor achievement. The same is happening now for Poland et al, and the next round will happen with all the other countries clamoring to get in
Are 80,000 pages of laws the best way to adapt to a planet with a changing climate?
What's the alternative to commonly agreed rules? Armies?
Or does it lock Europe into a regulatory hell that prevents it from being able to adapt?
Because regulatory hell is so what we are suffering from right now.
You mean like the ACP agreements? Or GSM standards? Or the fact that all these countries demand closer relationships with the EU? In the long run, we're all dead. John Maynard Keynes
how to deal with that, i don't know, and am hoping someone here has some bright ideas.
so far not much...
i can relate to the roma, btw, in their distaste for institutions, but i'm not crazy about how they act it out. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
Your comments seem to reflect the anti-EU brainwashing of the English language press more than anything else.
Sorry.
If my thoughts "reflect the anti-EU brainwashing of the English language press more than anything else" than I'm not surprised. I can read only English and thus get my information from brainwashers.
I post here to have my ideas challenged. I'm here to learn and share, not to exasperate you or anyone else.
What surprised me is that you did not just quote an article: you wrote these things about Europe I've highlighted. You're over here on ET quite regularly, and we rail about these things all the time. I guess it's just depressing that the volume of information against us is so overwhelming that it's hard to even make a dent with people that are sympathetic to what we say. In the long run, we're all dead. John Maynard Keynes
