Comments on: In 2013, the great global unraveling Tue, 30 Sep 2014 12:44:03 +0000 hourly 1 By: danuta_huebner Thu, 24 Jan 2013 15:04:19 +0000 As you remark, the EU economic governance story may see interesting twists and turns over the coming year. It is still hoped that a more integrated banking framework will ultimately do more good than harm to Europe’s single market. What seems inevitable at the moment however is that this framework will also strengthen the road towards a two-tiered Europe. This is an EU with a strong core composed of euro zone members and member states outside the common currency. Here however, a distinction must be made between the UK and the remaining non-euro members. The boundary of this core is likely to be drawn by the adherence to the upcoming single supervisory mechanism. Many unknowns loom on the horizon and future developments will be radically shaped by the final form of the banking supervision deal and the remaining components of the banking union structure, namely deposit resolution and deposit guarantee scheme.

The question whether globalisation will take a backseat in 2013 remains open. From the EU’s perspective, increasing global integration is still a reality which needs to be dealt with. This was also highlighted in a Commission Communication released in late November 2012 on the future of the EU. The document envisages a single representation of the euro area in international organisations such as the IMF and outlines potential steps for achieving this. At the same time, the EU is considering a trade agreement with the US, as stated during the 2011 EU-US summit statement and confirmed by the ongoing work which has been taking place between the two parties ever since.

Turning specifically to the US, while the 2012 presidential campaign was largely dominated by domestic concerns, Mr Obama will also have to stand up to emerging global challenges. One of these is posed by the new Chinese leadership, personified by Mr Xi Jinping. The China-US relationship will be particularly interesting to follow in the realm of foreign policy, on issues such as Syria and Iran, which have revealed tensions between the two parties in the past.

Looking at the bigger picture, we must remember that the dynamics of the global order do not ensue out of thin air, that they are driven by political and economic decisions. Global action is required if we are to have a say about the direction in which the global order is heading. This is why we need to generate the capacity to cooperate. Whether this capacity exists remains an open question. We have seen willingness for the establishment of productive relations in a number of cases, one is the current transatlantic relationship, but this impetus is for the time being not strong enough. More fuel is needed if a genuine cooperation at the global level is to ensue.

Let me also point out a number of other topics which could take an interesting turn during the year ahead:

European Prospects:
-2013 will also bring along the German Parliamentary elections; the elections will decide Angela Merkel’s political trajectory and will impact the management of any upcoming economic governance reforms
-a number of European countries are likely to be in the spotlight once more:
• the Troika will keep its eyes closely on Greece, which recently received a disbursement from its second aid package and has been abiding by its programme commitments, time will tell whether it will be able to stick to this path
• upcoming Italian elections will decide whether technocrat Italian Prime Minister Mario Monti has gained sufficient popularity in order to become the country’s new democratically elected Prime Minister. The elections outcome could be decisive for Italy’s borrowing costs and for its future economic outlook
• Spain is likely to be once more in the spotlight, given the 39.5bn EUR disbursement agreed by the Eurogroup in early December for the purpose of bank recapitalisation
• following David’s Cameron’s speech in London on January 23, the question of whether a flexible EU membership for the UK is possible will emerge
-with negotiations ongoing on the future single banking supervisor, a deal is expected in the spring of this year. An agreement would bring along with it the possibility of direct bank recapitalisation via the ESM, a development which promises to bring about a number of significant shifts on the European policy scene

Global prospects:
-the recent crisis situations in Mali and Algeria have already turned the attention of political leaders towards Africa; this move is likely to prevail at least throughout the first half of 2013 and bring terrorism concerns to the foreground once again
-global monetary policy has been extremely loose over the past few years. This has been helpful in getting credit flowing to the real economy and has stimulated borrowing and consumption in difficult economic times. We have however started to notice a global trend towards higher inflation. This may also strike Europe in the near future and would in turn lead to a tightening up of monetary policy. Higher interest rates may dampen growth prospects, at a time when higher growth rates are critical.

By: Harmonize Thu, 03 Jan 2013 11:28:10 +0000 the unraveling is designed to bring in world govt ‘out of many one’ … unregulated capitalism is unhealthy , the govt is elected to protect its people without infringing on individual freedoms so its always a balancing act socialism an capitalism are 2 sides of coin… social security, medicare, welfare all part of usa with free markets an free enterprise and individual freedom, currently the balance has shifted to the 1% through deregulation and greed since the early 80’s. read ‘decline of the west’ spengler

By: 123456951 Wed, 02 Jan 2013 15:06:56 +0000 The more power, the more corruption. The US government is the world’s most powerful. Beware…

By: lawgone Tue, 01 Jan 2013 17:08:18 +0000 One of the main reasons if not the reason for the world being in such a tumulus state is there are not enough jobs to go around. Its mathematics, if X (population) is larger than Y (jobs), there is going to be a problem. When people are hungry and have no shelter, they literally have nothing to lose. Enter unrest and war, every year more and more people enter the job on the planet, however, the # of jobs either remain the same or become less. I don’t know what the answer is to fix the unbalance…

By: EStern Tue, 01 Jan 2013 01:39:00 +0000 @OneOfTheSheep,

I totally agree with you. For a young idealist or romantic, leaning to the left is as natural as eating and drinking. But when I meet middle-aged and elderly people, espousing socialism, I inadvertently get the feeling that their censure of capitalist system is merely a symptom of a personal failing – failing to feather their own nest amid such wealth and opportunity. These homegrown Socialists not only lack economic resources, intellectual capacity or credibility, they are profoundly deficient in what one might call ‘a true Socialist experience’. They pay 10-35 % income tax rates and enjoy inalienable rights to life, liberty and private property; add to that riddance of the rich and greedy bourgeoisie, they argue, and you’ll get the proletariat paradise. Well, I’m sorry to be so blunt – you will not get one, at least, not in the way they think. As the private increasingly becomes the collective in such a paradise, one may safely forget about his meager 10-35 % taxes altogether as well as private property and civil liberties.

By: OneOfTheSheep Mon, 31 Dec 2012 23:43:47 +0000 @JL4,

The manure you spread so thickly before us with such earnest ignorance gives me the giggles. In France there’s an old saying that: “If you’re young and not a Socialist, you have no heart. If you’re mature and still a Socialist, you have no brains.”

The U.S., like every other world power, protects it’s own interests on the world stage. It is unique, however, in that it has consistently done more to help other peoples achieve and enjoy a better life than any other in history.

Don’t accuse America of seeking undue “access” to the natural resources of other “regions”. You obviously do not know of what you speak.

America defeated the Japanese, a people who had treated our captive soldiers without mercy. Instead of treating them as a conquered race, it helped them rebuild their society as a fully functional DEMOCRACY! Our Marshall Plan in Europe did the same for Germany, Italy and the rest of shattered Europe. We forgave the Arabs (who did everything they could for the Axis), and buy their oil at TOP DOLLAR when we could have simply taken it and dictated our own price.

When third world governments have neither the technology nor the financial ability to develop their natural resources it is America that steps forward with contracts and “joint ventures”, only to see more than a few of them later nationalize such business entities without just compensation. And don’t use the word “Capitalism” as if it were something shameful or dirty.

Capitalism and the mind set that goes with it is America’s “goose that lays the golden egg”. Capitalism’s “magic” is that it harnesses the self-interest of individuals into a force of progress and common good. Get used to it. There is no society of note in history that has existed or CAN exist without economic activity that results in PROFIT for someone.

You would not today be free, nor would your standard of living be a fraction of what it is. if not for the production efficiency and capability of Capitalism. Capitalism and corporations brought into timely existence arms from the arsenal of Democracy so the fighting men and women of Britain and Russia and diverse free soldiers in every theater of WW II could triumph over Fascism and eventually reveal the poison that was the postwar spread of Communism.

America’s home-grown domestic Socialists would gladly destroy America’s businesses of every form if they could. They do not see or understand that it is THEY who would then fall fastest and furthest! Good thing there’s a certain “lack of credibility” when the majority is still living off of their parents or “occupying” our educationa establishment in one form or another.

Fortunately the great majority of them are still living off of their parents or “occupying” the educational establishment. They lack economic resources, intellectual capacity or credibility and so are only taken seriously by each other.

By: JL4 Mon, 31 Dec 2012 16:14:07 +0000 The U.S. has never spread Democracy so that the “poor souls” in the world could enjoy the same “freedom”. BS.

The U.S. has spread Capitalism so that McDonald’s, The GAP and Starbucks (to name just a few) can enjoy more quarterly profits, and access a region’s natural resources, e.g. oil, to name just one.

And as long as corporations invested in jobs here in the U.S., the U.S. population was pretty cool with that. We were happy to let them go wherever they wanted.

But now “Globalization” has become our newest four-letter word because corporations have abused their new freedom by abandoning the U.S. workers in favor of the low wage, tax and regulation standards in other countries.

Corps have a “What’s in it for me THIS quarter?” mentality and spend money investing in the U.S. only as far as filling the pockets of their favorite Congress members.

It has all come home to haunt us. Most of us know this – except the members of Congress whose only mentality is “What’s in it for me this NEXT election?”.

By: usagadfly Mon, 31 Dec 2012 14:20:12 +0000 Why is it that certain people believe world conquest is the only salvation for humanity?

I suppose this is simply the Imperial mindset. Why is individual action bad while collective (military) action is good? Have people forgotten the horrors of war and a police State? We should have never allowed all of those bureaucrats from the old USSR into this country. Now they seem to dominate us. And we have the world’s new gulag right here.

By: boonteetan Mon, 31 Dec 2012 08:34:28 +0000 Today is 31st Dec 2012, the last day of the year. While sending away the old year surreptitiously, I am ushering in 2013 with a rather heavy heart.
For the past 2 decades, I would pen my thoughts practically every new year eve, each time hoping the coming year with bring us a better life and more lasting peace. Yet without fail, it turned out to be just the contrary. The world plunged into deeper economic valley, war carnage perpetrated and spreading, many more innocent people lost their lives without knowing why, the problem of hunger was never solved yet food prices kept soaring. Humans continue to self-inflict without qualm or remorse, creating unnecessary disaster after disaster of magnitude far greater than that from nature.
At 70, I am still perplexed and often confused. Not that I have become more pessimistic, somehow situations in the world do not warrant a brighter 2013. Must things keep worsening? Why can’t humans practice respect and tolerance, shun greed and lust? Nothing can destroy this world except us, likewise, nothing can save it except ourselves. Think, think again, please. There just isn’t much time left, lest we regret forever. (btt1943)

By: EthicsIntl Mon, 31 Dec 2012 05:26:34 +0000 ‘Globalization’ could have been humanity’s savior if it were executed legitimately & ethically, improving the lives of all the citizens on this planet.

Instead, the world’s greedy & criminal elite have used it effectively in enriching only themselves while destroying the lives of ordinary citizens, and bringing today’s horrendous disparity between the rich & the poor.

I wouldn’t be surprised if China, the worst abuser in the past, comes out as the leader in reforms for economic & political equality.