Week 9 and 10, March 31+April 7
Unelected technocrats...
Unelected technocrats...

Week 6+7, 
March 10+March 17 
Populists
are narrowing governments’ options

February 24 and March 3
Is the West up to the challenge?

February 3 and 10
The Greek Election and its Repercussions for the Future of Europe

January 27
Elections in Greece


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Klaus Kinzler
 

Faculty Member 
with
SciencesPo Grenoble

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Readings of a Worried Franco-German European
Can France reform? We dout it but European leaders look the other way...  
The Economist, Peter Schrank, March 1
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MARCH 2015    


ECB: QUANTITATIVE EASING

Europe’s Easy-Money Endgame Project Syndicate, March 26, by Hans-Werner Sinn, Professor of Economics and Public Finance at the University of Munich; he is President of the Ifo Institute for Economic Research and serves on the German economy ministry’s Advisory Council. He is the author, most recently, of The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs (2014).

"(...) There is a risk that Japan, China, and the US will not sit on their hands while the euro loses value, with the world possibly even sliding into a currency war. (...)

Moreover, the southern EU countries, instead of leaving prices unchanged, could abandon austerity and issue an ever greater volume of new bonds to stimulate the economy. Competitiveness gains and rebalancing would fail to materialize, and, after an initial flash in the pan, the eurozone would return to permanent crisis. The euro, finally and fully discredited, would then meet a very messy end. One can only hope that this scenario does not come to pass, and that the southern countries stay the course of austerity. This is their last chance."


FRANCE: REFORMS ? NO THANKS... (2)

A COLLECTIVE PREFERENCE FOR MASS-UNEMPLOYMENT

Chômage : comment l'État décourage le travail FigaroVox, March 26, by Christophe de Voogd, ancien élève de l'École normale supérieure, docteur en histoire, il enseigne à l'Institut d'études politiques de Paris. Il collabore au blog de la Fondapol: "Trop libre".
"(...) La préférence française pour le chômage ou la «tyrannie de la majorité»: comment en sortir?
Il faut bien admettre qu'il y a une «préférence française pour le chômage».
Elle est aussi inavouée dans le débat public qu'elle est avérée par l'ensemble des études. Elle se traduit par de nombreuses réalités qui conjuguent leurs effets négatifs: lourdeur ubuesque du code du travail, fiscalité confiscatoire et poids des charges sociales, dysfonctionnements du système éducatif, formation professionnelle dévoyée dans son contenu et ses destinataires et régime d'indemnisation du chômage qui dés-incite à la reprise d'activité. 
Sans oublier les insuffisances de Pôle emploi, submergé par la tâche. Autant de facteurs qui expliquent le haut niveau du chômage structurel en France, en particulier celui des jeunes et des seniors, et sa montée depuis désormais 4 ans, avec une accélération depuis mai 2012, alors même tous les pays de la zone euro, sauf la Grèce, voient leur situation s'améliorer depuis 18 mois.
Consensus inutile
Le consensus est quasi-unanime et alimente notes, rapports, et autres recommandations depuis des lustres, sans que le système soit corrigé, sauf à la marge. (...)
Tentation conservatrice
Faute de quoi, c'est une autre hypothèse qui pourrait se réaliser: inquiets devant leur perte de statut et de revenus, les différents groupes de la majorité sociologique risquent de se repasser le mistigri de la crise, se disputant les ultimes lambeaux de l'État-Providence, au risque du déchirement complet d'un tissu social bien fragile. La multiplication des revendications catégorielles ou régionales depuis deux ans montrent que le scénario n'a rien d'hypothétique.
Cette «tentation conservatrice» est bien réelle. Elle transcende les clivages politiques, la gauche rivalisant particulièrement avec le Front National pour ne rien changer. Le refus de la première de toucher à son socle électoral, le secteur public au sens large, en faisant porter «l'ajustement» comme disent joliment les économistes, sur le secteur privé et les chômeurs, réduit à néant sa prétention à combattre «les inégalités». À ce «social-conservatisme», d'autant plus fort que l'on est plus «à gauche», répond le «national-conservatisme» de l'extrême droite
Il serait peut-être temps de s'aviser, lorsque l'on veut combattre la montée du FN, que sur tous les sujets, que c'est ce national-conservatisme qui le définit. 
Mais le conservatisme traversant tous les partis, y compris à droite, ils rechignent tous à faire un tel diagnostic du «principal ennemi», car ce diagnostic pourrait bien leur revenir en boomerang…

"UMPSFN"? REFORMS ? NO THANKS... (1)

CONSENSUS IN FRANCE BETWEEN MAINSTREAM PARTIES AND FAR RIGHT

They’re All the National Front Now Wall Street Journal March 24,OP-ED John Vincour, former executive editor of the International Herald Tribune. (PDF file 117,67 in My Daily Readings)

"Socialists and Gaullists share the far-right Marine Le Pen’s aversion to the reforms that France needs"

"Marine Le Pen's right-wing extremist National Front widely outpolled France's governing Socialists in nationwide local elections Sunday, scoring a bit under the potentially record levels that pollsters had projected. Beyond the numbers stood a jarring and less obvious political fact.
The campaign, fought largely on national issues, showed that Ms. Le Pen's party and its Socialist and Gaullist-conservative political rivals share the same negative reflexes when it comes to taking decisive action that could propel France out of its pit of decline.
Disregard Ms. Le Pen's calls for France's exit from the European Union and a return to the French franc as preposterous campaign loss-leaders.
More important, it turns out that the National Front resembles its democratic mainstream counterparts when it comes to avoiding the central measures -- their need so strongly emphasized by economic stagnation and homegrown Islamist murderers -- that could truly change France. "

FRANCE

RULES IN THE EURO ZONE ARE RULES, EXCEPT WHEN THEY ARE NOT...

The Economist March 14
"AMONG the few certainties in this short life are death, taxes, and a wink from the European Union whenever France flouts its fiscal rules. This week France secured its third reprieve in six years, when EU finance ministers granted it two extra years to get its budget deficit below 3% of GDP, the limit enshrined in EU law. Inside the euro zone, serial rule-breakers are supposed ultimately to face the prospect of hefty fines. But despite its plan to run a deficit of 4.1% this year, France’s punishment was altogether milder, amounting to stern words from the European Commission (which monitors the EU’s fiscal rules) and an instruction to tighten the fiscal screws a little more. (...)
The EU’s image as a political club that put laws above politics may be the most romantic ideal of bureaucracy the world has known. But it does not always survive encounters with reality, as the French example showsHypocrisy alone is no mortal sin. But rules without political commitment may breed tension and mistrust. Some situations call for a strict application of rules, others do not. Alas, there is no rule to tell them apart.


TRUST BETWEEN EUROPEAN PARTNERS IS RUNNING OUT

Germans turning sour on Greece, opinion poll shows  Ekathiminerini (Greece, English Version) March 13

More than half of Germans believe debt-stricken Greece should leave the eurozone, according to a poll published on Friday amid a war of words between Athens and Berlin.

And 80 percent believed Greece is not acting in a reliable manner in its negotiations with eurozone partners, found the Politbarometer survey released by public broadcaster ZDF.

The proportion of respondents who think Greece should stay in the currency union has fallen to 40 percent from 52 percent two weeks ago, while 52 percent now believe it should leave, up from 41 percent.


GERMAN AND GREEK PRESS DO NOT AGREE

Berlin and Athens wrangle over reparations European Press Review, Eurotopics, March 12

The German government on Wednesday dismissed demands by the Greek prime minister for reparations for Nazi crimes committed during World War II. Speaking to the the Greek parliament on Tuesday, Tsipras had called for billions of euros in compensation. The Greek leader is once more going way out on a limb in the debt crisis, some commentators complain. Others praise Tsipras for holding up the mirror of history to Germany.

Frankfurter Allgemeine Zeitung March 12

"Since the Two Plus Four agreement of 1990/91, officially the Treaty on the Final Settlement With Respect to Germany, the question of reparations claims has been settled, in the view of the conservative daily Frankfurter Allgemeine Zeitung: "Basically everyone was in agreement at the time that such demands on the basis of indisputably terrible crimes were obsolete in the context of today's peaceful order. German and European courts, as well as the International Court of Justice, decided not to reopen the reparations issue for good reasons. ... Germany has always acknowledged its responsibility for the irreparable wrongs it committed - and paid for them. But anyone who tries to pull out this card again today must know what they're doing. Not only has the matter been settled from a legal point of view, it is also dangerous nonsense at a time when Germany would actually be entitled to respond even to justified claims from Athens with a hefty bill of its own." (12/03/2015)


"The Greek Justice Minister Nikos Paraskevopoulos wants to allow the seizure of German property in Greece pending an agreement on Greece's demands for war reparations. Blogger Pitsirikos concludes that Athens is going on the offensive: "For the first time in many years the German government is having to take a defensive stance with regard to Greece. This game is called 'politics'. ... For the first time Greece is officially demanding reparations because for the first time it has a government with which the Germans can't just do what they want. ... Germany has made a big mistake. It put too much pressure on Greece, and in doing so it forced the Greeks to vote out the politicians and parties that Germany had under its control. And in so doing, the German government has lost this game." (11/03/2015) 


IS THE EURO ZONE A "MONSTER"?

Der Spiegel Interview March 10
"SPIEGEL: European governments have tried to avert the crisis by implementing numerous reforms. What do mean when you refer to impenetrable political instruments?"
"Piketty: We may have a common currency for 19 countries, but each of these countries has a different tax system, and fiscal policy was never harmonized in Europe. It can't work. In creating the euro zone, we have created a monster. Before there was a common currency, the countries could simply devalue their currencies to become more competitive. As a member of the euro zone, Greece was barred from using this established and effective concept."

A LEFTISH (CAUTIONARY) FAIRY TALE 

Venezuela’s Currency Circus NYT OP-ED March 6, 
bFrancisco Toro is the founder of the blog Caracas Chronicles. Dorothy Kronick is a doctoral candidate in political science at Stanford.

"In a faraway land, an eccentric king nailed an edict to the door of his palace that said: “Henceforth, $20 bills will be sold here for $1.”  Within minutes, his subjects were clamoring for those cut-rate twenties. So the king posted a second edict: “Each $20 bill shall be used only to buy things abroad.” Then a third: “Whatever you buy abroad with your $20 you must sell in our kingdom for $2.” “This will make me beloved!” he thought. “Foreign goods will be cheap for all.”
But it didn’t work out that way. Soon, the lines for $20 bills were matched by lines at every store that sold foreign goods.
Since nobody saw much point in buying anything abroad to sell for just $2, people mostly pocketed the twenties and the imports never showed up on store shelves. And if any item did hit the shelves, whether it was a $2 box of diapers or a $2 sack of flour, it could be sold for $6 on the black market — so standing in line at the shops became a job.
The king was incensed. A new edict appeared: “Pocketing your twenty and marking up a $2 import are henceforth economic crimes, punishable by imprisonment.”
Riot police officers roamed the queues sniffing out dissent; subjects were recruited as spies. “It must be a conspiracy! A foreign plot to overthrow the monarchy,” raged the king.
If this fable strikes you as far-fetched, spare a thought for the people of Venezuela. For 12 years, their economy has been run pretty much along these lines..."

APARTHEIT IN FRANCE? KIND OF...

L'intégration, un scandale français  Edito Le Point, March 6    
"Les chiffres sont éloquents, le taux de chômage des descendants d'immigrés d'Afrique de moins de 25 ans en France est extrêmement élevé." 
 "Ce rapport-là fait très mal. Une note de France Stratégie (organisme rattaché au Premier ministre) nous apprend que, "sur la population des actifs de moins de 25 ans, le taux de chômage des descendants d'immigrés d'Afrique (Maghreb compris) atteint 42 % en 2012, contre 22 % pour les descendants d'immigrés européens ou pour les natifs".
Un rappel cruel d'une réalité qui colle mal avec le "vivre-ensemble" claironné depuis longtemps. Chiffres à l'appui, France Stratégie remonte le fil de ce désastre : le poids du milieu social, l'échec de l'école, la relégation géographique et l'exclusion de l'emploi. Pis, le rapport précise que le risque de chômage est deux fois plus élevé pour les descendants d'immigrés africains "toutes choses égales par ailleurs, c'est-à-dire même quand on neutralise les effets liés à l'âge, au diplôme, à l'origine sociale ou au lieu de résidence".

ABENOMICS... LOOKS LIKE IT DOESN'T WORK THAT WELL...

Japan Now Spends 43% Of Tax Revenue To Fund Interest On Debt ZeroHedge March 5 

 "This carries over especially into Japan’s economic and financial situation. As a percentage of GDP the government here is carrying more debt than anyone else on the planet. At one quadrillion yen, the debt level is so high that it now takes the government 43% of its central tax revenue just to pay interest this year."


WHERE DOES RADICAL ISLAM COME FROM?
Ibrahim Ahmed, once a radicalized Muslim, now counsels teenagers against joining extremist movements like the Islamic State. “We are so beguiled with ideology, we miss the fact that jihadis and neo-Nazis have a lot in common,” said John Horgan, the author of “The Psychology of Terrorism” and director of the Center for Terrorism and Security Studies at the University of Massachusetts at Lowell. “The similarities of how they get engaged, involved and disengaged in terrorism by far exceed the differences.”

THE POPULIST (and Anglo-Saxon) BATTLE AGAINST AUSTERITY  

Austerity Is Not Greece’s Problem Project Syndicate, March 3          BRicardo Hausmann, former minister of planning of Venezuela and former Chief Economist of the Inter-American Development Bank; he is Professor of the Practice of Economic Development at Harvard University

"But the truth is that the recession in Greece has little to do with an excessive debt burden. Until 2014, the country did not pay, in net terms, a single euro in interest: it borrowed enough from official sources at subsidized rates to pay 100% of its interest bill and then some. This situation supposedly changed a bit in 2014, the first year that the country made a small contribution to its interest bill, having run a primary surplus of barely 0.8% of GDP (or 0.5% of its debt of 170% of GDP).

Greece's experience highlights a truth about macroeconomic policy that is too often overlooked: The world is not dominated by austerians; on the contrary, most countries have trouble balancing their books.

A large plurality of (Greeks) voted for Syriza, which wants to reallocate resources to wage increases and subsidies and does not even mention exports in its growth strategy. They would be wise to remember that having Stiglitz as a cheerleader and Podemos as advisers did not save Venezuela from its current hyper-inflationary catastrophe."


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