Greece
Food Alert!
If nothing changes by the end of 2014 the TAFTA (Transatlantic Free Trade Agreement) will be in force; a catastrophe for those who believe that food and drink are serious issues not to be messed about with so much.
If the agreement comes into force as planned then you will soon be saying hello to genetically modified milk, beef hormones, and chlorinated chicken, not to mention shale gas and oil… And then you will have to say farewell to managed environments, free-range, freedom foods, and a pleasant and green landscape pleasing to the eye as well as our collective conciseness. The influx of products will adversely affect our European food security for what I ask? A populist agenda and cheap shopping!
This project opens the doors to American domination so that they can make by 2029 $0.03 per person with nothing in it for Europeans I venture. The deal will remove trade barriers and tariffs designed to keep safe our own food supply, our own farms and associated businesses. American companies will enjoy commercial equality with our European companies. European jobs will be lost, a new recession is peering at us over the horizon at the end of the decade.
European social structures will be damaged, possibly beyond repair by this agreement. Social standards will be diminished, economic standards will be diminished, industrial, cultural, and personal freedoms will be diminished because this agreement will attack our basic democratic freedoms through an unprecedented level of influence that will be exercised by the American mega-companies vying to control our food supply chains.
What gain for Europe? Well its suggested that Europe will gain 0.5% of total European GDP but its also said that this figure should be treated with scepticism, it might not happen!
There is also the further very thorny issue of energy supply. The agreement allows for free trade across Europe of energy supply but there is no universality of agreement between European states on the status of energy supply. In some countries certain types of energy (shale gas) is illegal. This is without question a massive area of concern not currently addressed by the agreement or the EU. Democratic rights will certainly be trampled under the American free trade boot when it comes to energy supply.
The European project seems to be under threat from our American cousins attempts to sell Europe food and energy that it does not need or want in most cases. Do we honestly need more Americanisms? Our food is currently too fast, more not less McDonald’s cannot surly be a good thing.
Gender Gaps
Christine Lagarde, Director of the IMF, said recently, “In the long race ahead, it makes no sense to simply eliminate half the contestants before the starting gun is sounded. Letting women participate more fully in economic life can yield enormous economic benefits.”
Its probably fair to say that in the developed west that women get a better deal in terms of equality in the workplace than probably anywhere else on the planet. That’s no to say there is absolute equality, there isn’t, but they do experience a much closer to the male experience than almost anywhere else. Of course Asia is probably the most desperate place to be a woman right now but the Middle East offers some hope.
The Middle East is a key region of interest because although increasing numbers of women are receiving a good standard of education, the region still lags behind on the core issue of economic equality. On a global scale, the latest figures from the World Economic Forum‘s Global Gender Gap Report show that although the gender gap in education is 93% closed, the gap in economic equality has closed by only 60%. A problem!
There is plainly a disconnect from the classroom to the workplace. Education will continue to be vitally important generally but it has to be questioned where the focus for women’s education is. What educational support do women need to prepare them for the world of business and work?
Perhaps the Middle East is swayed by overt sexual discrimination? This might be too simple an explanation but nonetheless probably forms part of the explanation. Women entrepreneurs seeking loan capital may have their ideas and suggestions dismissed on the basis of them being a woman rather than straight forward commercial measure of the likely hood of success of the business being proposed. Women’s enterprise then is choked-off at source! The net result is retarded economic growth with only 50% (at best that is) of economically active people partaking in forwarding the economy.
Youth is the key to forward growth and engagement economically. The youth of today shape the future of tomorrow. This despite the political and military challenges facing the region at the present time, youth hold the key.
I am quite sure that each country will need a unique approach, cultural challenges presented by national identities possibly being the most difficult of challenges to overcome, but not insurmountable over time. My assumption is that the majority of countries of the Middle East will face many common challenges, possibly more so than any other region and this then may prove to be the deciding factory in regional success and therefore the model for the rest of the world to follow. Well we can hope I guess.
The exception to the Middle East rule is Israel with an economy broadly speaking similar to developed European and US economies. Although I’m not suggesting that Israel is not without economic issues to overcome, but they are much closer (and in some respects further on) than the close by European economies in respect to equality of opportunity.
Women in the workplace, women in business… it simply makes no sense to eliminate half the contestants before the starting gun is sounded. Letting women participate more fully in economic life will yield enormous economic benefits.
Related articles
- Women gain as gender gap narrows (updatednews.ca)
- Mind the gender gap: it’s shrinking (one.org)
- Gender gap narrows globally in 2013 – Report (ghanabusinessnews.com)
- UAE closing narrow gender gap (gulfnews.com)
- Canada ranks 20th on global gender inequality index as world gap narrows (business.financialpost.com)
- World Economic Forum Global Gender Gap Report 2013 (economicvoice.com)
- Global Gender Inequality Narrowed in 2013 – Bloomberg (bloomberg.com)
- Women gain as gender gap ‘narrows’ (bbc.co.uk)
- The Global Gender Gap Index. Do you know how big or small is this gap in your country? (keepitpureandsimple.wordpress.com)
- India ranked 101 in global gender gap report (thehindu.com)
Sunday Shopping – France
In France since 1906 Sunday has been protected as a day of rest by statute with just a few exceptions; fishmongers, florists and those businesses that are closely associated with tourism. Businesses that break this law are subject to a fine of €6000 (about $8000).
However, France as are many European economies, is facing higher that desirable levels of unemployment, presently running at a jobless total of 10.5% with what can only be described as feeble economic strength with reducing consumer spending. So there are voices within France who are saying that Sunday trading should be more liberalized in an effort to boost consumer spending. Indeed public attitudes seem to be suggesting that they want Sunday trading and shop workers would also like Sunday trading as well. So why not?
Those who oppose the extension of Sunday trading; Unions & the Roman Catholic Church argue that it is important to keep the 35-hour week and Sunday as a day of rest and relaxation. That change would be Anti-French.
Laws about Sunday trading vary greatly right across Europe, German still largely supports the notion of no Sunday trading while the UK has very liberal laws. The UK broadly speaking allowed open Sunday trading with sweeping changes introduced in 1994. Greece and Italy who both have struggling economies have both recently changed their legal frameworks to allow Sunday trading in an effort to combat the very poor economic conditions they are facing. France too has gone some of the way with changes introduced in 2009 under the previous right-wing President Nicolas Sarkozy who gave Mayors the authority to designate specific Sunday trading areas.
Commercial tensions are running high though. In recent court rulings DIY stores Castorama and Leroy Merlin were ordered to close on Sundays following a complaint from their commercial rival Bricorama. These rulings have not quelled the demands of those who what Sunday trading, indeed they have added fervor to the cause for Sunday trading. But traditionalists still maintain and defend the importance of balancing work with leisure time which to any outsider appears central to the French way of life.
Nonetheless the evidence does support the majority view that people want to shop more, they want to spend more and those who work in shops want to work more.
Now that France has a Socialist President in power the argument just got a lot more trickier for all concerned. Further loosening of the Sunday trading laws is unlikely, Labour Minister Michel Sapin has not indicated that he is inclined to make further changes. In addition to this, prominent Mayors like Paris’s Bertrand Delanoe, a Socialist, has refused to extend Sunday commerce zones.
The political tensions are sure to be heated to boiling point on this issue as Mayoral elections are due to take place in March 2014. Conservative candidate for Mayor of Paris Nathalie Kosciusko-Morizet has proposed expanding Sunday shopping as part of an effort to defend France’s title as the world’s most-visited country. By contrast the Socialist contender Anne Hidalgo, on the other hand, has maintained that Sunday should remain a day of rest for people to spend time with family or do charity work.
Politicians on the far left have threatened to run against Anne Hidalgo if she changes her stance on Sunday trading potentially splitting the left vote and allowing in the Conservative into the Mayors job.
March in Paris should be fun for those who watch French political maneuverings.
Related articles
- France retail giants defy Sunday trading ban and open for business (euronews.com)
- France to examine laws curbing Sunday shopping (miamiherald.com)
- French stores defy Sunday trading ban (news.com.au)
- Cartoon: Sunday Shopping (englishblog.com)
- WA shopping hours could extend further (news.theage.com.au)
- French stores rebel against Sunday trading ban in bitter row (menafn.com)
- Barnett says no WA trading change soon (bigpondnews.com)
- Shopping Sunday (eatsdrinksandthinks.com)
- Rest, damnit! (thisclimbingbean.wordpress.com)
- Stocks nosedive (thedailystar.net)
They were called Gypsies
Europe has a long and diverse history so far as the Roma or Gypsy are concerned. The Roma population is not homogeneous in nature, it is divided through the events of history and the passage of time.
The Roma populations right across Europe share common parts of their language and expressions but the stories they tell are very different indeed.
In France the first record of Roma is from the Bohemian populace and dates from the Middle Ages. In Romania, Moldovia and Wallachia there could be found a very high concentration of Roma peoples linked to the often found enslavement of these people. Slavery was abolished in the 1850’s and it was recorded that in Romania they had over 200,000 Roma in a total population of 4.4 million people.
Today there is presently around 10 million Roma right across the European Diaspora and notably about 14 million world-wide, so a European issue really. Roma peoples in Central and Eastern Europe account for anything up to 10% of the populace. In Western Europe the story is very different. In France for example there are 250,000 Roma derived from the group formally known as the ‘nomads’; these were people engaged in itinerant occupations recorded in ‘The Plan of the Nomads’.
Spain and Portugal also have very defined groups with a very strong sense of identity. After the Great Plague of 1347 in the Middle Ages people migrated from Graeci, Albanasi and Cingari to Southern Italy, Spain & Portugal. In Spain the Roman Catholic Monarchs practiced against the Roma in the same way they practiced against the Jews; conversion or death. This policy led to a concentration around Andalucia where the Flamenco culture comes from. Back in France Roma collected in the Catalan towns of Marseille and Montpellier living a sedentary lifestyle.
Today the reason for Roma movement is driven by the factors of economic activity and a place to live freely.
Roma populations are broadly speaking right across Western Europe rejected, but this is nothing new. In France there have been many notable attempts to purge the Kingdom of the Roma. Into the 19th century the Roma had a much better time of it and were tolerated in France. This changed in 1907 when things turned very violent, the policing of the wandering risk , the abject race as they became known. By 1930 most Western States had made legal arrangements to control the Roma, to record who they were, where they were and what they were doing.
In 1940 the French State went further in requiring full assimilation of the Roma. They were no-longer allowed to just drift and to have an independent identity. They were either French of not French. But things relaxed some in 1969 when the Roma with no fixed place of residence were given the name of traveler.
In the modern era life for the Roma is once again becoming difficult through social and cultural mistrust. The political climate is again moving against the Roma. But there is confusion; the Roma from Southern France, Spain, Italy as well as Central Europe share a common identity. The Roma from the UK, Northern France, Switzerland and the Scandinavian Countries are not joined by a common heritage. The status of these Roma is still and shall remain subject to national identities. The proposed French administrative system of travelers permits is perhaps a way of dealing with the activities, movements and work arrangements but will rely on some level of European integration or assimilation.
One of the central European dreams is freedom of movement of people and the Roma typify freedom of movement, its just that the national administrative systems cannot hope at present to keep up with the movements of the Roma. Non-the-less the total movement of people is near to 15,000 across Europe so nothing like the 250,000 people who made their way into France in the Middle Ages.
Protection of the rights of the Roma is important but the stateless sense of the Roma people has got to be addressed. The Roma bring mistrust among local populations, crime and localized environmental issues to be addressed. The Roma cannot be allowed to become stateless and therefore free from tax liability, free from social accountability and free from cultural inclusion but they must be allowed to maintain their very essence.
Of course the effects of the travelers from Northern Europe are all together a different matter. These Roma are not ethnically identified, they are people who have chosen to adopt a life-style, something short of homeless. They have a home, they have a national identity, they do not need assimilation, they do not form part of a Diaspora, they bring social, cultural and legal difficulties and they contribute little in the way of economic or societal contribution.
To understand the Roma is to understand their history and who they actually are.
Related articles
- French minister defends Roma remarks (bbc.co.uk)
- French interior minister defends call to kick out Roma people (wakeupfromyourslumber.com)
- French minister defends policy of expelling Roma (star-telegram.com)
- As Economic Conditions Stagnate in Europe, “Gypsies” Come Under Fire (valuewalk.com)
- France Seeks to Extradite Roma Immigrants Back to Bulgaria, Romania (novinite.com)
- French Minister Valls Defends Call for Roma Expulsions (amren.com)
- European Union warns French minister over Roma comments (theguardian.com)
- Brussels Raps France Over Roma Row (french-news-online.com)
- Ethnic Cleansing: The Roma (Gypsies) in France (southweb.org)
- Expulsions, harsh words for Roma in France draw scrutiny from EU and rights group (vancouverdesi.com)
Stolen Future, Stolen Past
Right so the Easter Holidays are over and its back to work and the news just gets… well worse actually.
Official figures published by Eurostat Statistics Agency earlier today (Tuesday 02 Apr. 2013) showed the number of unemployed people in the Euro-Zone had risen by 33,000 between January and February 2013, putting unemployment in the Euro-Zone at a staggeringly high 12% or 19.07 million people of working age and able to work. this is just an average as well.
Among states within the Euro-Zone, (not including the UK), the highest increases in unemployment compared with a year ago were in Cyprus (10.2% to 14.0%), Portugal (14.8% to 17.5%) and Spain (23.9% to 26.3%). So the bail-outs worked? No!
Worse still youth unemployment (the under-25’s) rose to 23.9%, up from 22.3% a year ago. But the stark contrast happen when you compare Germany with the others. German youth unemployment 7.7%, Italy 37.8%, Portugal 38.2%, Spain 55.7 and the winner is… Greece 58.4%. This is not good, German style austerity is NOT making jobs in those countries that most need them.
That’s the old-style bail outs.
The new Cypriot style bail out, you know the one where the Government is forced to agree to a levy of up to 60% on savings over €100k (this looks like theft to me), well they are going work a treat don’t you think? No, I didn’t think so either. The Germans have come over all happy that national debt problems, national banking problems are not going to be dealt with at the cost of the German tax payer. I’m sure they are very happy with this arrangement, they all join a big jolly club, make like they’re all big pals but as soon as the going gets a little tough Oh no, nobody’s wants to help.
So here we have it; Countries in the Euro-Zone that fall foul of banking failure or spiraling national debt who thought they could rely on their partners actually cant. But not only that what help that is on offer comes with a hefty long term price to pay. No jobs for the foreseeable, definitely no jobs for the youth and anybody who had a will to save for the future well they gonna take that as well. Genius idea! Stop the poor from earning a living and stop the wealthy from enjoying the benefits of their labours.
Can I venture that the actual effects of all this austerity and levy’s and joblessness might actually lead to the long-term deterioration of Germany?
The Germans have enjoyed really low interest rates for a looooooong time, they have a manufacturing industry still in tact and sell to the rest of Europe. So far so good, good products sold to those who want them. Trouble is, those customers of the German manufactures were borrowing money from each other to buy these goods and now the Germans want everybody to pay up. The German success is built on the very shaky foundations of everybody else’ debt.
It just cant be me that can see the flaw in the plan can it?
The Germans are going to have to face up to their dilemma at some point. Either start playing along a bit and helping those others who’ve got them selves in a bit of spot or go it alone and collapse the European project altogether.
New Model EU
By the end of Monday this week, The UK FTSE 100 had closed down 0.2%, the German Dax down 0.5% & France’s Cac dropped 1.1%. later in the day New York, the Dow Jones closed 0.5% lower.
Why?
The agreement between Cyprus and EU Finance Ministers, that’s why!
Under the agreement finally made in the early hours of Monday morning, people who have more than €100,000 in Cypriot banks will have to contribute directly to the €10bn rescue package. The Dutch Finance Minister Jeroen Dijsselbloem said later that the approach could form the basis of a new model for stopping the collapse of European banks, rather than asking taxpayers to bail them out.
The reality of what Mr. Dijsselbloem is saying is that there is apparently no conceivable reason why anybody would want to have more than €100,000 in savings in a European bank. Not a single reason as far as I can see. This wont be a problem for the vast majority of European Citizens and especially those in Cyprus because they soon wont have any money anyway if the EU carries out this plan (threat).
Naturally Germany (Ms Merkel) is happy with the deal in the Cyprus case. They were less than impressed by Cypriot reliance on Tax Haven status, an over-reliance on the banking sector (I wonder what other EU country relies heavily on banking? The UK perhaps?).
Its not that I disagree that EU countries should have balanced economies, not overly reliant on any one sector but, like all things Austerity speed is of the essence it would seem. The Cypriot economy may only take 2 or 3 years to bounce back but living standards are likely to be affected for more than 10 years, and that’s a long time to be unhappy at treatment by those who you don’t know.
Balanced economies are a good thing and are a step (probably bigger than we realize) towards integration. If all economies are acting in the same way then why not integrate? No reason at all, in fact economies of scale will come into play and off we go. Balanced economies with a centralized homogenized government will in all likelihood put the EU back into the game on the world stage, maybe.
So, do I think this will happen? No, of course not.
What I think will happen is that local, national priorities will take precedence. 10 years to recover, not improve, just recover living standards is not a winning pitch in my view. Its a recipe for silo thinking, self pity (I have some sympathy here) and maybe even separatism so defeating what the EU is supposed to be all about.
The Germans are a bit like the Incredible Hulk, you wont like them if they get angry, but they really need to work on some chill-out therapies. It seems for the time being they are getting their own way but I have fear that they’ll get used to it. The Greeks and Italians are very unhappy bunnies and only just missed the boiling pot. Who next I wonder?
Well it doesn’t take a village idiot to work out that at some point the UK is going to come in for a bit of close financial inspection and when it does who knows how badly they will react. After all the Brits can hardly be described as fully paid up members of the European project, skeptics at best! No, I think that the EU should draw back a bit and see if there are any more localized workable alternatives. They may take a bit longer to work through but will probably get much better buy-in from those directly affected.
Net result: local solutions to local problems and no tears in the European JV.
Coffeeeeeee!
I’ve been to Africa countless times and there are plenty of reasons that I can see that the Continent should not be in the position it finds itself. I’ve met a multitude of talented, ambitious, thoughtful and yes entrepreneurial people. In fact there are parts of Kenya or Tanzania or Uganda I would happy settle and make my life.
The reason Africa is dependent on aid is really a very simple one. Less than 20% of African exports are manufactured, value added goods, the other 80% are raw materials. But 65% of the continents imports are manufactured goods. Africa therefore is a producer of what it does not consume and a consumer of what it does not produce. The irony of this perverse situation I’m sure isn’t lost.
In Uganda for example coffee is grown in small quantities by about a million households. In fact Uganda is the 5th largest producer of coffee beans, but it doesn’t have any capacity for processing those beans. Frankly I was amazed when I read that stat! This means that less than 1% of the retail value of coffee originated in Uganda is retained by the very farmers who produced the beans. But here’s the real kick in the proverbials, go to any large hotel in Uganda or Kenya or pretty much any other East African nation and see what brand the coffee is that you get served in a hotel. My bets are that you get Nescafe and not much else.
Don’t get me wrong here, Africa is blighted by Big Man Politics. But even this cultural bent is related to how the old colonials left the continent. For the most part European countries carved-up the continent in search of raw materials, installing a small but well armed band of so called Diplomats & Governors to run the countries they invented (Africa is a continent of nations who do not have socially natural boundaries check it out there are just too many straight line borders for this to be deniable). What they didn’t do was educate. So when the countries found freedom from colonial rule they just didn’t have the educated elite to run the country that was left. Nett result; a few rose to power and were quickly corrupted.
So we now support Africa with endless aid. In fact the continent now has a chronic dependence on aid and I don’t see how it actually contributes to or acts to stimulate sustainable economic growth. The powerful donors have tied the aid to concessions, making the leaders of African nations more accountable to corporate America and EU than to their own people. In short the structural inequalities generated in the 1950’s & 60’s are perpetuated, promotion of labour exploitation ensures that the export of primary commodities remains central to the bare survival of those in power.
How to correct this situation?
My suggestion is 3-fold:
- Transfer of knowledge, train the people in how to manage their environment to best effect
- Provide the technology to do the jobs; this of course is linked intimately to point 1
- Build institutional capacity; this is the really difficult one actually. Good governance, good banks, good savings schemes… the things we probably take for granted
There are without question no shortage of entrepreneurs in Africa, all you have to do is visit Nairobi or Lagos or… you will be accosted with people selling their wares. No, no shortage here. The real question is access to funding. About 3% of adults in sub-Saharan Africa can access funding, the other 97%+ are on their own.
The key to this lock I believe lies with the Western Supermarket Chains. It wouldn’t take that much effort I’m sure for them to go to Africa, seek out those producers who can make what they need, invest some of their vast wealth in creating capacity and give a listing to those producers who make the grade. I have no doubt that many will, make the grade that is and I would not complain if I had to pay a penny or two more to get great value, high quality products knowing that a farmer or a producer or co-operative somewhere in Africa is able to feed itself, educates itself, and looks after its own health care. Now that to me sounds like a win-win all-round.
Its a well used phrase but Trade not Aid is to the point and accurate. All we have to do is find the will to want to change how Africa is run, how we can economically engage with the vast wealth talented people. I make but a few suggestions and I’m sure there are people cleverer than me with greater insight than me who can shed much more light on what appears to be a complex problem but actually is quite simple, just immense.
EU Oh Oh!
The most powerful trading bloc in the world today, the EU and the UK is in it but for how long? The UK’s relationship with the EU can be tetchy at times it has to be said, in fact its utterly hostile at times.
The EU in the UK is painted as the source of horror; out of control red tape, completely over the top human rights laws and to top the lot immigration (inward to the UK that is). Its these overstated negatives that have influenced the group think in the public at large moving towards a view that EU membership should be put to an in-out vote.
Public and popular concerns are often stated in terms of un-thinking rashness summed-up in a handy sound-bite. If its not short, punchy and to the point (often wide of the mark actually but you get the drift I’m sure) its not worth making it. Its actually the responsibility of Government, that would be from all parties, to put the benefit of membership and of the obvious self-interest of remaining a member. Grandstanding, sabre rattling, shouting about in-out referendums will bring nothing but contempt from our EU/EEA partners.
Bill Clinton put it as “it’s arithmetic!” A market that’s 500 million people with a GDP of around £11/€13 trn, no tariffs, customs duties and right next door has got to be the opportunity of a life-time, several life-times actually for jobs, business, prosperity and safety.
Around 3.5 million jobs are directly & indirectly linked to EU/EEA in the UK. So basically a massively compelling reason to stay put, not rocking any boats of any kind. The economic fortunes of the UK are undeniably linked to the EU/EEA.
Business has been absolutely consistent in supporting continued membership and really cannot understand the uncertainty created by the prospect of a referendum. Who in their right mind would want to invest in the UK knowing the prospect of trade with the EU/EEA is almost certain to get more difficult in the future I ask you? A No vote in 2017 and you can close the City of London; financial trading will move to Paris or Frankfurt.
We are already on the outskirts having passed on the Euro and the Schengen Agreement. We have an opt-out on the Working Time Directive and point blank refused to sign-up to the Charter of Fundamental Human Rights or the presently proposed Banking Union.
No-wonder then that our European partners are frosty sometimes. They must be exhausted with our constant hedging of bets. Change is best effected from within, we all know this but we stand firmly outside staring in, complaining bitterly that its not they way we would do things; childish tantrums. As a position of influence its doomed to failure, often does fail as well.
And what happens after we’ve left? the next day? who would be our partners then?
The US has made it more than clear that we are only important in the EU. Any perceived ‘special relationship’ over, immediately. The Americans have questioned the exit strategy and found it wanting.
So what about the Commonwealth? Lord Howell of Guilford, father-in-law of George Osborne recently said “The Europeans are our neighbors, the Americans our friends, but the Commonwealth is our family.” Regrettably he was looking out over the Commonwealth wearing his very special rose coloured glasses. And how do I know this? Well India is buying £12/€14.5 bn worth of French fighter jets instead of the UK (Commonwealth partner) jets despite the millions of pounds of aid that the UK has continued to contribute to one of the fastest growing economies on the planet. I don’t get a sense of family here!
No, the Commonwealth is the place that Brits go for a better way of life; Austrailia, Canada, New Zealand… But I don’t see too many going to India, South Africa or Pakistan, just not appealing.
I’m quite sure that the EU/EEA isn’t perfect and much change is needed, this will be on-going. But standing squarely up to the EU/EEA and demanding change or off we go probably isn’t the best way of going about getting what you want, what’s important. What ever the differences are, no matter how strongly held opinions are consensus is ultimately in the best interests of all; EU/EEA and UK.
Wag the Tail
Germany’s deputy Finance Minister said before the financial world imploded “there was no credit boom in Germany. Property prices remained flat. There was no borrowing for consumption. This behaviour is totally unacceptable in Germany. This is what German people are. This is deeply in German genes. It is perhaps a left-over of the collective memory of the Great Depression and the hyperinflation of the 1920’s”.
Over recent years it should come as no big surprise that power is shifting from Brussels to Berlin and therefore what Berlin values is what Europe values.
German house ownership is about 42%, one of the lowest levels in Europe. In Britain on the other hand house ownership is at the 69% mark. In fact in Berlin house ownership is as low as 10%, so you can see the obsession with house prices and fluctuation just isn’t there. And if it isn’t there its not a source of income to spend on whatever takes your fancy. To illustrate, over the last decade the price of UK houses all but doubled, while in Germany they have risen about 3%.
So the British obsession with remortgaging to generate ‘income’ has been nothing if not a super heated flame applied to the economy. Having capitol generated from housing is not productive!
Angela Merkel the Chancellor remains living in a modest flat. She sets the example that she would dearly love those party animals, the Greeks to follow. The Greeks are ever so resistant to becoming more German and partaking in paying just a few taxes and spending a little less.
The Germans have never allowed the tail to wag the German Shepherd. They make stuff instead of being overly clever with moving money around to ‘add value’. Although the Germans are not afraid of exploiting low interest rates for themselves, selling what are admittedly high quality goods to those they are seeking to bail-out in the olive-belt. The same people and nations they are expecting to pay 4 or 5 times more then they do for borrowing money.
The Germans export! The margins they make on manufactured goods are remarkable; to illustrate, the direct cost of making a BMW 5 Series is roughly speaking the same as making a Ford Mondeo. The BMW will sell for about £10 – £14k more! Point made I’d say.
But please don’t go getting your German phrase book out just yet. The German model cannot be scaled. It only works because the rest of our economies don’t. We just cant all start making stuff and exporting it, where would it go? who would buy it?
The German dream has a course to run and will come to an end. German domestic demand is low, and the average German is not much better off than they were 10 years ago. Real disposable income has fallen over this period by about 7%, compared to Spain where real income has risen about 13% in the same period.
While we partied the Germans had an early night its probably fair to say. They worked hard, saved and they are getting angry that they have to bail-out the olive-belt. The reality is, is that some (but not all) Germans are looking for a return of the Deutschmark, national pride, and nationalist sentiment is on the rise in Germany, they are developing a feeling of superiority I fear.
The truth is that the Germans have looked after themselves very well thank you and are looking to be installed as the new masters of Europe. Well they would be utterly useless in such a position, they are non-intergratory by nature.
The fact is that the economic crisis will run its course and we will come out of it at the end. But for the best outcome the Germans will have to be a bit less German and those of us in those countries where our economies are a work of fiction (Grease, Spain, Italy, Ireland, UK) will have to be a bit more German.
Me, I’m with the French on this kind of matter. They have no aspiration to be at the center of Europe, it makes them nervous. They have learn the lessons of history well and whilst not a shining example of how to do things in all cases they are never-the-less a great (probably the best) example of how to bring together a disparate group of people and instill national pride without the unsavory expansionist leanings of political nationalists.
If Angela gets here way and along with the Spaniards, Italians and Greeks we all save but don’t spend, the crisis will go on for much longer than it need and we will remain miserable, jobless and a burden on the German state.
PD-inspire 