The Great Debate UK
The spoils of EU reform
- Alain Délétroz is Vice President Europe at the International Crisis Group, www.crisisgroup.org. The opinions expressed are his own. -
There is a sumptuous feast happening in Brussels, but some are better fed than others. What to many may seem an indigestible alphabet soup of new EU institutions dealing with foreign policy after the Lisbon treaty, is actually a smorgasbord of patronage, favour and influence.
Britain may feel it has done well to get the spot at the head of the table in the form of new High Representative Catherine Ashton, but in reality the French and Germans seem to be the ones setting the menu.
Currently at issue is an organ called the Crisis Management Planning Directorate (CMPD), which is intended to be at the very heart of Ashton’s External Action Service — essentially the new European diplomatic corps.
from The Great Debate:
Watch banks for clues on Greece
-- James Saft is a Reuters columnist. The opinions expressed are his own. --
As odd as it sounds, concerns about the effects of a euro zone sovereign crisis on Europe's still poorly capitalized banks may prove to be the tipping point that leads to a swifter bailout of Greece.
While discussion of contagion may seem very 2008, the problems with Greece, which faces a huge fiscal deficit, are becoming tougher for euro zone authorities to leave uninsured.
from MacroScope:
Political economy and the euro
The reality of 'political economy' is something that irritates many economists -- the "purists", if you like. The political element is impossible to model; it often flies in the face of textbook economics; and democratic decision-making and backroom horse trading can be notoriously difficult to predict and painfully slow. And political economy is all pervasive in 2010 -- Barack Obama's proposals to rein in the banks is rooted in public outrage; reading China's monetary and currency policies is like Kremlinology; capital curbs being introduced in Brazil and elsewhere aim to prevent market overshoot; and British budgetary policies are becoming the political football ahead of this spring's UK election. The list is long, the outcomes uncertain, the market risk high.
But nowhere is this more apparent than in well-worn arguments over the validity and future of Europe's single currency -- the new milennium's posterchild for political economy.
from Global News Journal:
Does Greece really deserve such a market pummelling?
So there's no question Greece has work to do to improve its bookkeeping.
Not only must it get spending in check, but it needs to be a bit more honest about where its finances stand in the first place. After all, it's not often an EU country says one month that its budget deficit is a little over three percent of GDP and admits a few weeks later that, oh dear, it's actually nearer 13 percent.
Yet it's hard not to have a little sympathy for Greece at the same time.
Its government bonds have been hammered and the price it has to pay to finance its debt has soared as financial markets have relentlessly taken it to task over the past six weeks for its profligacy.
from MacroScope:
The euro gets a warning shot of Greek fire
Juergen Stark , Germany's ECB executive board member, is well known as a true believer in tight fiscal discipline, so his reported comments in Italy's Il Sole 24 Ore about not bailing Greece out of its financial difficulties are not out of character. But the market reaction must have at least given pause for thought to EU leaders wondering how far to go in coddling their wayward child.
Within moments of Stark's reported musings that markets were "deluding themselves" if they thought member states would "put their hands in their wallets to save Greece", hitting the foreign exchange rooms, the euro was on a tumble. It hit a low of $1.4285 from a day's high of $1.4371 -- which doesn't sound like a lot, but is, especially over a very short period of time.
from Commentaries:
A camel for EU president?
A camel, says an old Middle East joke, is a horse designed by a committee.
The European Union is in danger of getting camels for its two new leadership positions -- president of the European Council and foreign policy High Representative -- because of the dysfunctional appointment process created by the Lisbon Treaty.
The secretive horse (or camel)-trading by which EU governments choose the 27-nation bloc's top office-holders seems designed to deter strong candidates and produce lowest-common-denominator outcomes. Some of the most able potential contenders would rather stay at home than take the key jobs to Brussels.
from Breakingviews:
EU looks lonely on climate high ground
Negotiations to save the planet from catastrophic climate change are heading for trouble, five weeks before a crucial U.N. conference in Copenhagen.
The European Union has been at the forefront in pressing for binding, internationally monitored reductions in greenhouse gas emissions, and funding from industrialised countries to help developing nations switch to clean energy.
from Commentaries:
Mr Who for EU president? EU seeks anyone but Blair
Who will be the first president of the European Council of EU leaders? Anyone but Tony Blair. That is the only clear message to emerge from a European Union summit, where the appointments of the EU's two new senior office-holders is not on the agenda but is on everyone's mind.
The appointment process is typical of the surreal way in which the 27-nation bloc does business. The job is poorly defined in the Lisbon treaty reforming the EU's institutions, which is expected to come into force in the next few weeks. But it is clear that most leaders are looking for a consensus-building summit chairman rather than a high-profile president of Europe.
from Commentaries:
Ireland puts the EU show back on the road
The EU show is back on the road. Sixteen months after Irish voters brought the European Union's tortured process of institutional reform to a juddering halt by voting "No" to the Lisbon treaty, the same electorate has turned out in larger numbers to say "Yes" by a two-thirds majority.
This is an immense relief for the EU's leadership. After three lost referendums in France, the Netherlands and Ireland, and a record low turnout in this year's European Parliament elections, the democratic legitimacy of the European integration process was increasingly open to question. The Irish vote will not completely silence those doubts. Opponents are already accusing the EU of have bullied the Irish into voting again on the same text, and of blackmailing them with economic disaster if they did not vote the right way this time.
from Commentaries:
Germans vote for change; will they get it?
Germans have voted for change. A centre-right government with a clear parliamentary majority will replace the ungainly grand coalition of conservatives and Social Democrats that ran Europe's biggest economy for the last four years.
This should mean an end to "steady as she goes" lowest common denominator policies, and at least some reform of the country's tax and welfare system. The liberal Free Democrats, who recorded their best ever result with around 14.7 percent, will try to pull the new government towards tax cuts, health care reform, a reduction in welfare spending and a loosening of job protection in small business.
