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Transatlantic Trade and Investment Partnership

by A swedish kind of death Thu Jan 16th, 2014 at 01:27:47 AM EST

The EU informs us that the Transatlantic Trade and Investment Partnership that is presently being negotiated under much secrecy will have positive results.

Transatlantic Trade and Investment Partnership (TTIP) - Trade - European Commission

Independent research shows that TTIP could boost:
  • the EU's economy by €120 billion;
  • the US economy by €90 billion;
  • the rest of the world by €100 billion

That should be, according to Dean Baker:

Research by a pro-deal think tank shows that TTIP could in the best case scenario boost:

  • the EU's economy by €120 billion;
  • the US economy by €90 billion;
  • the rest of the world by €100 billion
in the year 2027, in 2027 euros. However it also shows that the more likely scenario is about 50 USD per person and year.

The US-EU trade deal: don't buy the hype | Dean Baker | Comment is free | theguardian.com

As growth policy, this trade deal doesn't pass the laugh test, but that doesn't mean that it may not be very important to a number of special interests and, for this reason, bad news for most of the public. Since conventional barriers to trade between the US and EU are already very low, the focus of the deal will be on non-conventional barriers, meaning various regulatory practices.

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A two-speed model country …

by Colman Tue Jan 14th, 2014 at 07:07:06 AM EST

Fintan O'Toole lays out the Irish situation for Americans and other aliens:

For conservatives, in particular, Ireland is the Tyra Banks of nations: a model country. The only problem is that they can’t quite decide what Ireland is a model of.

For a long time, when Ireland was booming, it was the perfect face of light regulation and low taxes. (With impeccably bad timing, Senator John McCain cited Ireland’s low corporate taxes as a model for the United States in his presidential election debates with Senator Barack Obama in 2008 - just as Ireland was sliding into crisis.) Now, with Ireland tentatively emerging from its long slump, it is being cited as the great exemplar of the virtues of austerity.

As the German finance minister, Wolfgang Schäuble, a fiscal hawk, put it in October: “Ireland did what Ireland had to do. And now everything is fine.” Ireland was a success story when it was partying wildly and it is a success story when it is the Grim Reaper of international economics. Binge or purge, we can do no wrong.

We Irish are eternal optimists, but Mr Schäuble’s belief that everything is fine is a rare example of a German outdoing us in irrational exuberance. It is certainly true that, if you were to walk around the rebuilt Dublin docklands, with their shiny European headquarter offices for Google, Twitter, Facebook and Yahoo, and their slick cafes and hotels, you might conclude that if this is what an Irish crisis looks like, an Irish boom must be quite something to behold.(Irish Times)

It's sort of fun that the commentariat are picking up on the diverging economies with Ireland that I've been muttering about for a while: the economy that's linked to the outside world is doing just nicely. The domestic economy is screwed. Shocking, isn't it? Who could have expected that?

Comments >> (3 comments)

Hungary and the perils of 'upward mobility'

by car05 Tue Jan 7th, 2014 at 09:51:05 AM EST

Some time in the middle of last year, political theorist József Böröcz wrote a blog post regarding the direction of Hungarian society, and it was pretty powerful stuff.

 Arguably, Hungary is showing some powerful symptoms of a fascist transformation. Special thanks for that to the elites--both the right wing and the middle (there is of course no "left" visible in politics in Hungary)--that managed the transformation from a somewhat bureaucratic and perhaps a bit boring, upwardly mobile state socialist society, producing, at its peak, food for twice its population, with better-than-expected scores on the quality of life, culture, health, etc., engaged, at the time of the collapse of state socialism, in bold and extremely creative experimentation in many areas of social and economic life to a small, insignificant, desperate, self-hating, xenophobic, classist, racist, sexist, ageist snake pit with widening social inequalities.

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The horse race is on! (with poll)

by Migeru Thu Jan 2nd, 2014 at 10:42:13 AM EST

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LQD: French Intellectual Melancholia

by das monde Mon Dec 30th, 2013 at 05:16:35 AM EST

The Economist has a provoking article in the Christmas issue on French noir moods. It should stir some discussion here.

ONE of the most perplexing questions of the early 21st century is this: how can the French, who invented joie de vivre, the three-tier cheese trolley and Dior's jaunty New Look, be so resolutely miserable? [...] polls suggest that the French are more depressed than Ugandans or Uzbekistanis, and more pessimistic about their country's future than Albanians or Iraqis ....

[...] Le Monde ran three pages under the title "Liberté, Égalité, Morosité", in a bid to decode its fellow countrymen's "persistent melancholy". France, it turns out, has the highest suicide rate in western Europe after Belgium and Switzerland. An American psychiatric study showed that, among ten rich countries, the French were the most likely to have a "major depressive episode" at some point in their life. Even the French language seems to be particularly well stocked -- morosité, tristesse, malheur, chagrin, malaise, ennui, mélancolie, anomie, désespoir -- with negativity.

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Transformation of an economy

by Frank Schnittger Fri Dec 27th, 2013 at 03:09:50 AM EST

Since 2007 the number of people employed in the Irish economy who do not have a secondary education qualification has reduced by 50%. The numbers of people employed who do have only a secondary educational qualification has reduced by 20%.  But the numbers of people employed with a tertiary educational qualification has increased by 12%.

Many will view this as confirmation that Ireland is being transformed into a knowledge based economy. Another way of looking at it is that the working class in Ireland has been devastated by the recession, whereas the middle class has (relatively speaking) prospered.

There are many factors at play here: The devastation of the Irish construction sector since 2007; the rise in participation rates in tertiary education; and the growth of the mostly foreign owned multinational companies in the ICT, pharmaceutical and services sectors.

Many employees who did not have a third level qualification in 2007 will have retired from the workforce or have achieved a third level qualification since. Most of the new entrants into the workforce since 2007 will have had a much higher level of education than previous cohorts, and some of these will have come from a working class background.

However the educational system is still overwhelmingly the mechanism by which the middle class can propagate itself:

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Citizen ET in Lithuania - EYCA Conference (1)

by Bjinse Fri Dec 20th, 2013 at 04:14:52 AM EST

So let's unpack this step by step.

The EYCA Policy Recommendations for improving EU citizenship form the end product of the European Year of Citizens Alliance (EYCA). They were presented to the European Commission last Friday, December 13. The EYCA was formed, as previously explored, in 2011 through the bundling of 'civil society organisations' and the liaison of the European Economic and Social Committee, a consulting body for the EU. The over 60 members of the EYCA represent numerous national and internationally active organisations. The initiative itself was started, and funded, by the European Commission with the aim to "foster citizens' participation in the democratic life of the European Union".

Thus, an exercise initiated by the European Commission, through an alliance funded by the European Commission, resulting in a report predominantly written by NGOs under the auspices of the EU-funded umbrella organisation.

The word missing in this summary is, of course, citizens.

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Happy Bailoutmas

by Colman Fri Dec 13th, 2013 at 09:56:23 AM EST

Ireland officially leaves the EU/IMF bailout today, heralding a new era of irish sovereignty and so on and forth … (The Irish Timeshave a mini-site if you really want a flavour of the bullshit being spewed here.)

So far, the highlight is Noonan saying "We can't go mad again", followed by talk about tax cuts (for the sake of jobs and growth, naturally), the sale of the semi-State gas company and only 2 billion in cuts in the next budget. I'm feeling saner already.

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LQD: A Way Out of Austerity

by ARGeezer Mon Dec 9th, 2013 at 11:16:36 AM EST

How to Exit Austerity, Without Exiting the Euro  Rob Parenteau  New Economic Perspecitves

First of all, if a government stops having its own currency, it doesn't just give up `control over monetary policy'...If a government does not have its own central bank on which it can draw cheques freely, its expenditures can be financed only by borrowing in the open market, in competition with businesses, and this may prove excessively expensive or even impossible, particularly under `conditions of extreme urgency'...The danger then is that the budgetary restraint to which governments are individually committed will impart a disinflationary bias that locks Europe as a whole into a depression it is powerless to lift.

So wrote the late Wynne Godley in his August 1997 Observer article, "Curried Emu". The design flaws in the euro were, in fact, that evident even before the launch - at least to those economists willing to take the career risk of employing heterodox economic analysis. Wynne's early and prescient diagnosis may have come closest to identifying the ultimate flaw in the design of the eurozone - a near theological conviction that relative price adjustments in unfettered markets are a sufficiently strong force to drive economies back onto full employment growth paths.

Rob Parenteau notes that countries caught in the deflationary vise brought about by the EMU and the associated policies would face a high cost for exiting the Euro and proposes an alternative.
(Corrected name for Syriza leader)

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Nelson Mandela RIP

by Frank Schnittger Fri Dec 6th, 2013 at 02:09:57 AM EST

I first became aware of Nelson Mandela in a personal way, when, as a 17 year old undergraduate student, I came in contact with South Africans who had been banned by the Apartheid regime for their political activities and who were now campaigning for an end to Apartheid throughout Europe.

Basil Moore, author of an anthology of Black Theology which included a contribution from Steve Biko had been banned for campaigning against Apartheid in his role as General Secretary of the South African University Christian Movement.  He lived under house arrest, his neighbours hung and strung up the the family pet from a lamp post outside their home, and he eventually escaped by sneaking across the border into Zimbabwe. Eva Strauss was banned for marrying a black man (and also perhaps for her outspoken political and feminist views). Colin Winter, Bishop-in-exile of Namibia had been deported for his opposition to Apartheid in Namibia and support for striking migrant workers.

All spoke with a moving personal touch. Politics was no longer some remote political struggle thousands of miles away. It wasn't just a cerebral and ideological battle: It was about how you lived your own life; it was also about the struggle against racism here at home. It was about the structures of international capitalism which made Apartheid possible, and which could also be part of its downfall.

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The long run... US agriculture and immigration

by Metatone Thu Dec 5th, 2013 at 10:44:38 AM EST

A few hopeful signs that this period we live in, where a large pool of labour has entered the world economy and as a by-product put "capital" in an incredibly strong position can come to an end:

Farmers Face Labor Shortages As Workers Find Other Jobs

FRESNO, Calif. -- With the harvest in full swing on the West Coast, farmers in California and other states say they can't find enough people to pick high value crops such as grapes, peppers, apples and pears.

In some cases, workers have walked off fields in the middle of harvest, lured by offers of better pay or easier work elsewhere.

The shortage and competition for workers means labor expenses have climbed, harvests are getting delayed and less fruit and vegetable products are being picked, prompting some growers to say their income is suffering. Experts say, however, the shortage is not expected to affect prices for consumers.

But farmworkers, whose incomes are some of the lowest in the nation, have benefited, their wages jumping in California to $2 to $3 over the $8 hourly minimum wage and even more for those working piece rate.

The shortage - driven by a struggling U.S. economy, more jobs in Mexico, and bigger hurdles to illegal border crossings - has led some farmers to offer unusual incentives: they're buying meals for their workers, paying for transportation to and from fields, even giving bonuses to those who stay for the whole season.

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Prudent financial management

by Colman Mon Dec 2nd, 2013 at 05:06:57 AM EST

German politician Peer Steinbrück – one of the fiercest critics of Ireland’s tax regime – used Irish letter box companies when finance minister to try to balance the German budget through financial engineering.

Mr Steinbrück – an unsuccessful candidate in the recent German election – and his Social Democratic Party (SPD) have been particularly vocal critics of Ireland’s tax laws.

He used the recent election campaign to attack failed finance market alchemy and condemn “tax oases” such as Ireland and the Netherlands. According to this morning’s Der Spiegel magazine, Berlin began doing business in Ireland to tap into pension funds of Germany’s post office, which was privatised and broken up in 1995 into three companies for telecoms, post and post office bank. (Irish Times)

I believe the declension here is: I manage my finances prudently, you engage in tax optimisation, he is a tax cheat.

This is, of course, pretty much the same sort of financial engineering as Italy and Greece engaged in to hide bits of their deficits.

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Prominent French economist says Germany should leave the euro

by afew Thu Nov 28th, 2013 at 02:42:20 AM EST

In a memo that we saw here, French bank Natixis' chief economist Patrick Artus, a well-known pundit on French media, describes Germany as a misfit in the single currency area, and outlines the macroeconomic case for D-exit.

This is a quick rundown of his points. The memo, in French, pdf, is here.

With the disclaimer that other fields than macroeconomics may be involved, Artus offers the following reasons for Germany to leave the euro:

  • asymmetry of cycles between Germany and Rest of Euro Zone (ROEZ)
  • weakening economic links between Germany and ROEZ
  • structural asymmetries between Germany and ROEZ
  • different foreign exchange needs between Germany and ROEZ
  • impossibility for ROEZ countries to carry out internal devaluations

Cycles: absence of asymmetrical cycles is a condition for a shared currency. But GDP growth and the unemployment rate show strong asymmetry:

(Real GDP, annual change in %)

(Unemployment rate)

The asymmetry stems from structural differences (see further down), and differences in how credit supports demand:

(Credit to households and business, annual change in %)

The result of this asymmetry is that common monetary policy is not adapted to the whole of the Euro area. Between 2002 and 2007, it was too restrictive for Germany, too expansionist for ROEX; since then, it has been the reverse:

(Repo rate and nominal GDP)

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Some thoughts about secular stagnation

by Cyrille Mon Nov 18th, 2013 at 05:35:10 AM EST

Via Paul Krugman, I saw that Larry Summers had given a presentation on the topic of secular stagnation at the IMF conference (admittedly, I wasn't invited this year, well, the letter must have been lost in the post ;-) ). If you'd rather read than watch, Krugman's summary is a nicely written one, and adds a few comments which can be interesting in themselves.

Well, I have not usually been inclined of late to say nice things about Larry Summers, although that was probably more about Summers the political persona. His academic research deserves more credit. So, much of it is interesting, although some of the conclusions he derives (and here Summers the neoliberal may be showing, for instance when he suggests that proper financial regulation may be a bad thing in the context of stagnation, which is bonkers) appear to either be there purely for provocation sake, or to be pre-conclusions looking for a justification. Still, I would have a few things to add, and I believe that the conclusions fall short in a couple of ways.

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Little austerity poster child is all growed up

by Colman Thu Nov 14th, 2013 at 07:08:35 AM EST

In wonderful news for our austerian overlords, their great success story, Ireland, is to leave bailout mode on December 15th without a precautionary line of credit.

Whoo-hooo. Use this thread to list your favourite statistics showing what a successful economy Ireland is now.

Comments >> (13 comments)

Green Primary

by afew Tue Nov 12th, 2013 at 05:06:11 AM EST

The European Green Party is organizing a primary for the two posts of leaders of the cross-Europe campaign for the European Parliament elections next year. (Twitter hashtag #GreenPrimary).

Greens select four candidates to run in primaries ahead of 2014 elections | EurActiv

Four Green MEPs [in fact 3 MEPs and one ex-MEP - note by afew] are entering the race for two top positions in the EU elections campaign ahead of the vote in May 2014. 

On Thursday (7 November), the European Green Party (EGP) announced the four contenders who will take part in the primaries: French MEP and syndicalist José Bové; Italian MEP and co-chair of the European Green Party Monica Frassoni; German MEP and co-chair of the political group in the European Parliament Rebecca Harms; and German MEP Ska Keller.

Bové is arguably the most well-known among the contenders, but all contenders have a strong support in their home countries, party sources said. Ska Keller carries the nomination of the Federation of Young European Greens and has a profile that appeals to young participants in the online vote.

The candidates had to seek a nomination from a member organisation of the European Greens, as well as support of at least four member parties, to participate in the upcoming online vote. Frassoni got the support of five member parties, Harms and Keller from seven and José Bové secured the highest support with eight endorsements. [For lists of supporting parties, go here - afew].

The EGP requires the two candidates to come from different national member parties. This rules out having Rebecca Harms and Ska Keller runing as a tandem. Although the Greens traditionally have a man and a woman sharing lead positions, this is not a requirement, and the duo to lead the campaign could very well be two women.

Harms, Bové, Frassoni, Keller

What's this about? The Greens ran the first cross-EU campaign for the EP elections in 2009, and will do so again, with the added attraction of this primary open to all sympathisers. This is also a step towards designating their candidate for Commission President. On this point see:

EUobserver.com / Political Affairs / EU Greens launch US-style primary elections

European parties hope to reverse this trend with trans-national campaigns and lead candidates who run for the top post at the European Commission, a novelty introduced by the Lisbon treaty.

But EU leaders recently poured cold water on hopes that the top candidate of the most popular party will automatically land the commission job.

German Chancellor Angela Merkel said she "sees no automaticity" between the election results and the post.

For his part, EU council chief Herman Van Rompuy warned against parties raising "false expectations."

Don't forget, the only "automaticity" is that Germany decides.

Should that make you want to go crazy and vote in this primary, the place to go is GreenPrimary. There's a FAQ here. You'll need to give an e-mail address and a mobile phone number, and check a box that says you sympathise with the values of the Greens.

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Eurozone Aims For Mars

by afew Fri Nov 1st, 2013 at 05:34:28 AM EST

The most striking recent economic news item was Wednesday's US Treasury FX Report's denunciation of German policy.

U.S. Accuses Germany of Causing Instability - NYTimes.com

WASHINGTON — The United States Treasury singled out Germany for criticism in a report released on Wednesday that said Berlin’s reliance on exports was holding back its struggling partners in the European Union.

The criticism echoes longstanding complaints from European economists and international banks. But it was notable because it was included in an unusual forum: a semiannual report that usually focuses on currency manipulation. The timing may reflect the United States’ wish to influence German economic policy as Chancellor Angela Merkel forms her new government after recent elections.

US Treasury Report : Germany has maintained a large current account surplus throughout the euro area financial crisis, and in 2012, Germany’s nominal current account surplus was larger than that of China. Germany’s anemic pace of domestic demand growth and dependence on exports have hampered rebalancing at a time when many other euro-area countries have been under severe pressure to curb demand and compress imports in order to promote adjustment. The net result has been a deflationary bias for the euro area, as well as for the world economy. Stronger domestic demand growth in surplus European economies, particularly in Germany, would help to facilitate a durable rebalancing of imbalances in the euro area. The EU’s annual Macroeconomic Imbalances Procedure, developed as part of the EU’s increased focus on surveillance, should help signal building external and internal imbalances; however, the procedure remains somewhat asymmetric and does not give sufficient attention to countries with large and sustained external surpluses like Germany.

Here are some reactions:

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Can we be your best friends too?

by Colman Sat Oct 26th, 2013 at 01:37:02 PM EST

So, apparently the Germans are sending their intelligence chiefs to Washington for lunch and a giggle with their US counterparts:

Germany is to send its top intelligence chiefs to Washington to "push forward" an investigation into allegations the US spied on its leader Angela Merkel. (BBC)
Meanwhile, the French are all upset too - probably because they're worried their PM wasn't important enough to bug - and they both want a new arrangement with the US:
Observers say they may be seeking an arrangement similar to the 'Five Eyes' intelligence-sharing agreement the United States has had with Britain, Australia, New Zealand and Canada since just after World War II.
So, basically, they want to integrate their signal intelligence with the Americans' and share all their data in the hope that they, personally, will be treated better? Craven fools. The NSA have been caught bugging US Senators. Why would they care about European leaders' privacy?

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Government attempt to abolish Irish Senate defeated

by Frank Schnittger Sun Oct 6th, 2013 at 02:05:48 AM EST

Samuel Johnson made this famous pronouncement that patriotism is the last refuge of a scoundrel on the evening of April 7, 1775, but perhaps it is populism which is the last refuge of the modern political scoundrel. Ever since the Irish economic crash and the failure of the political system to properly regulate, and then resolve the Irish banking industry, politicians and politics have often been seen as the most egregious form of low life in the country.

Seeking to capitalize on this unpopularity, the Irish Prime Minister or Taoiseach, Enda Kenny, decided, almost on a whim, that it would be a good idea and an easy win for the Government parties to propose the abolition of the Irish Senate in a referendum to be put to the people. Despite a range of opinion polls showing large majorities in favour, that strategy has just blown up in his face with a narrow 52 to 48% majority of the electorate voting against his proposal.

The main arguments being put in favour of the abolition of the Senate where that:

  1. The Senate has relatively few powers under the Irish constitution and generally has a significant built in Government majority thanks to the Taoiseach having the power to nominate 11 members.

  2. The lack of a popular mandate. Some Senators are elected by University graduates only, and most of the others are elected by local county Councillors to represent notionally vocational groups but are in practice mostly politicians who failed to win election to the Dail or lower chamber by universal suffrage.

  3. Numerous proposals to reform the archaic nature of the Senate electorate have to date come to nothing.

  4. A small country like Ireland doesn't require a bicameral system of governance.

  5. Abolishing the Senate could lead to an annual cost saving of up to €20 Million p.a., although this figure is disputed and is in any case trivial in comparison to the cost of the public service as a whole.

Nobody on the NO campaign side sought to deny that the Senate was in need of fundamental reform, although proposals for reform varied greatly. But what the NO vote did perhaps indicate was that the electorate wanted more political accountability, not less.

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Golden Dawn arrests in Greece: A quick note

by talos Tue Oct 1st, 2013 at 02:19:32 AM EST

After years of toleration of nazi / organized crime activities the Greek government following the murder of Pavlos Fyssas, acted at last:

(Reuters) - Greek police arrested the leader and more than a dozen senior members of the far-right Golden Dawn party early on Saturday after the killing of an anti-fascist rapper by a party supporter triggered outrage and protests across the country.

The arrests, which are the most significant crackdown on a political party in Greece since the fall of a military dictatorship in 1974, are the biggest setback to Golden Dawn since it entered parliament on an anti-immigrant agenda last year.

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News and Views

 19-21 April 2014

by DoDo - Apr 18, 31 comments

Your take on today's news media

 18 April 2014

by In Wales - Apr 17, 60 comments

Your take on today's news media

 Friday Open Thread

by afew - Apr 18, 7 comments

Let us remember...

 Thursday Open thread

by Helen - Apr 17, 21 comments

Disturb the strange tranquility

Occasional Series
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