Monday, August 29, 2011

Mixed Feelings on Mid-Crisis EU

Behind the euro crisis is a crisis of confidence, felt differently but to similarly intense degrees throughout the Continent. 

Northern countries have been feeling taken advantage of, with the common refrain echoing a feeling that the southern EU countries have spent with abandon the considerable benefits received from their neighbors. But "the feeling is mutual," reports Global Post, and in the case of Spain, many feel they have exchanged cash for compromised protections of rights, crisis-time mismanagement, sacrifice of national sovereignty, and kowtowing by Prime Minister Jose Luis Rodriguez Zapatero toward demanding eurocrats in Brussels. 

Nobel laureate Robert Mundell said on August 26, "I don't think the euro is on the verge of collapsing."

Alan Greenspan, the former head of the US Federal Reserve, said on August 24, "The euro is breaking down."

Eschewing with the "United States of Europe" idea, Romanian Mircea Cărtărescu favors a union centered around the "European mind" and a federation "not solely focused on the issue of economic survival." He says: 

"Present-day Europe relates to the United States as Athens once did to ancient Rome. And although at one point Athens sought to emulate Rome, I can see no reason why modern Europe should seek to emulate the United States."
German ex-foreign minister Joschka Fischer counters that "we need to work toward the United States of Europe now."

In Estonia, a slightly but definitely more optimistic note can be heard in the public opinion of the country's lot as it relates to the EU, again reported by Global Post. Says Swedish Prime Minister, Carl Bildt, 

“I remember the days when the counters of the shops in Tallinn were empty and the people were starving. The economy more or less had to be rebuilt from scratch... If you had asked people on Aug. 20, 1991 whether in 20 years “Estonia, Latvia and Lithuania would be seen as economic success stories in Europe, would be full members of NATO, full members of the European Union,” Bildt asked, “if anyone had said yes, that person would have been seen as a fairly likely candidate for lunacy.”
But such a public, party-line voice is bound to be tempered by ordinary citizens, in this case from Tallinn, the Estonian capital:

"Nineteen-year-old Katrina Ulbeerte, bopping along with her younger sister, laughs when asked what she knew about Soviet times before she was born. In American slang, she said her parents have told her that life then was difficult. “They told about special lessons about, like, communists and, like, all kinds of military stuff. I’m happy I don’t have to go work in a factory!”

"But 55-year-old Ieva Inauska, who couldn’t speak English but conveyed her thoughts quite clearly in broken German and hand gestures, doesn’t see much of a change. “Soviet Union? Bah. European Union? Bah. The European Union bureaucracy is even bigger than the Soviet Union’s!” And, she indicated, she preferred the latter."

Friday, August 19, 2011

EU, Texas Economics: Language, Money, Mobility

The Wall Street Journal compares, of all things, EU economics to Texan ones:

"Arguably, the heart of the euro zone's problem isn't a matter of culture or governance or remaining barriers to trade in goods. Rather, it's the huge hurdle that has always existed: Europe's multiplicity of languages. The fact that few Greeks or Portuguese have enough German to take on professional or even semi-skilled jobs in Germany removes the sort of safety valve that properly integrated federations rely on.
A case in point is the Texan economic miracle, the subject of considerable debate in the U.S. right now. Texan politicians make strong claims for the state's performance relative to the rest of the U.S. during the recovery. Doubters point to the fact that Texan unemployment remains high.
But a close reading of the data by Matthias Shapiro on his Political Math blog highlights something very interesting. Texan unemployment belies the strength of the state's economy because it has had considerable population growth during the past couple of years. Texas's strong employment growth has inspired people to flock to the state—so much so that the actual proportion out of work hasn't come down as fast as it might have done otherwise.
Since the start of the recession in December 2007, Texas's labor force has grown by 6%, astonishingly quickly for such a large state—more than twice as fast as the next-fastest state. When people are hit by hard economic times in one part of the U.S., they pack their bags and move to where the jobs are. The same doesn't happen in Europe.
For instance, the economically active population in Germany, Europe's economic powerhouse, has shrunk by about half a percentage point during the same time Texas has boomed. This is why Germany's unemployment rate has fallen much faster than that of Texas even as unemployment remains at stratospheric levels in countries like Spain.
Even in the years before the financial crisis, immigration to Germany from other European Union countries was equivalent to only about 0.4% of Germany's population, and most of that in the form of cheap labor from neighboring Poland.
Because it's harder for people from poorer euro-zone countries to move to the core, where there are jobs, fiscal transfers are crucial to address imbalances between the economies. But there's currently very little scope for these in Europe. EU spending as a percentage of GDP is less than a tenth of the U.S. federal government's.

Thursday, August 18, 2011

Consummate Citizens: Turks Defend Turf in London Riots

Thought I'd break the silence with my first post in way-too-long with this unusual piece on Turkish shopowners taking matters into their own hands during the London riots. 

Al-Jazeera reports a groundswell of local action against the looting and lawlessness currently plaguing London. With PM David Cameron pondering curfews and many in Europe wondering whether the unrest will spread to the Continent -- endemic of the same recession-related problems of unemployment and ever-tighter strains from austerity -- in the coming days. 

Interviewees expressed a surprising common theme of pro-Turkish sentiment, specifically concerning the question of the integration of Turkish-descended European citizens and, by extension, Turkey's accession into the European Union. The best bits of the Al-Jazeera piece are below.

"Our local shopkeeper refused to close. He said 'we are Turkish' as explanation," said one post. Another added: "Reports of heroic scenes on Dalston High Street. Turkish families lining the streets to oppose riots. What great Londoners."
Another, along similar lines, read: "Upper Dalston looks busier than a Saturday night with all the Turks on patrol! Thanks for Keeping Dalston safe!" followed by: "Who needs riot police when you’ve got Turkish shop owners."
One posting characterised the showdown between the Turkish restaurateurs and their masked adversaries as "baklavas versus balaclavas," while another summed up prevailing sentiments with "Say what you will about letting Turkey getting in the EU, they’re there when we need them."
Perhaps extrapolating the policing skills of London's Turks somewhat implausibly to the level of international diplomacy, one post mused: "If only Turkey can bring to Syria in the next few days what they've brought to Dalston and London in the last few."