Blog
28 february 2015, murder of moscow
The brazen murder of boris nemtsov, opposition stalwart, on the eve of a rally that might just have opened up popular criticism of the war in ukraine, does feel a little like an end of the world as we know it moment. Not a sudden drop into the abyss, more like the lobster being boiled alive in slowly heating water. There is a definitive moment when it dies, and historians may look back on today as the end of the collectively-willed pretence of russia as democratic, rationalist and not totalitarian. From that other consequences also come. To alexei devotchenko, natalia estemirova, alexander litvinenko, sergei magnitsky and anna politkovskaya then, we can add boris yefimovich nemtsov, former deputy prime minister, scientist, statesman and outspoken critic of vladimir putin. Just days ago a strident anti-maidan movement was formed in russia; it may already have its first victim. That such a thing was even conjured into being does underline the basic rationale for the whole ukrainian war being about not allowing such a protest movement (in kiev last year) with a pro-european/nato stance, to sweep to power and see success. That message to russia would be far too close to home and so must be stopped at all costs, and indeed stop it, is exactly what putin has very successfully done. An engaging election across the whole country, a strong new government, rapprochment with the west, opening borders and economic success are not exactly the image we have today of poor wretched ukraine. Stopping the lifeblood of hope from outside and cutting down the agents of change from within (putin called nemtsov part of a fifth column) are part of the same strategy. Slowly the rest of the world needs to realise the consequences of the lengths (see 17 april 2014, and the beast goes on) to which the russian leader will go.
21 february 2015, le demos nouveaux et arrivé !
Greece has folded this hand, but the poker game continues into next week, the summer and beyond. Behind the "who stands to lose more" gamble though, the bigger prize of democracy looks like it is being utterly eroded. Long after matters are somehow settled and greece gets enough help from its european partners to avoid collapse, the inability of its electorate to change anything, despite an overwhelming desire to do so, will be the salient outcome of this crisis. The basis of the last weeks' drama turns on the age old dilemma of a creditor insisting a debtor stick to the deal it made to get money in the first place. Whilst some blame and risk for making the loan rests with those that made it, the most part rests with an inept, unbalanced and corrupt economy that chose to lock itself into a bigger one and then needed the loan. Unlike the irish, portuguese and spanish, which were essentially problems of liquidity, greece was insolvent. There was no way around the many years of fat leading now to many of lean. An alternative eurozone strategy of keynesian stimulus would have helped greece, but at a price, given its governance, of avoiding necessary economic restructuring and, more potently, with no way of stopping the floodgates of equal treatment opening to portugal, spain, italy, france et al, which very quickly moves from an affordable stimulus, germany's great, and justifiable, fear. Where though does that leave the greek, and by implication other eu, electorates. Actually in the same place as most electorates: in the thrall of the majority. Just like the strong anti-austerity of scotland's electorate cannot at all change the policy of the overall uk government, which is supported by a majority of its parliament, so the electors of the greek corner of europe cannot change the contrary policy espoused by the european majority. It is rather vicious to see unfold, and not at all understood, but the great european democratic deficit question of our age is actually being answered before our eyes. Here is the european demos, laid bare, fittingly enough, by the greeks.
1 february, tw3
I do try to avoid laundry lists, but it was an interesting week. Tuesday was holocaust memorial day, and my youngest was home from school with a virus. We listened together to my other half singing live on national radio (27th) with her choir. It went very well indeed, and gave an appropriately wide meaning to the day, which I ended at a private dinner with the chinese consul-general. My brother's wife's grandma is a wonderful woman, and holocaust survivor, who last week was given the freedom of the city of london, and featured in several newspapers. Wednesday, I was down in london, and friday night my other half and I were invited out to listen to the manchester camerata play at the cathedral. I had the honour and great pleasure of a private coffee in the morning with the conductor, gabor takacs-nagy. He is driven, philosophical, obsessive and generally all-round artist. The performance was literally (being in a cathedral) heavenly and took both of us to places music hasn't for quite some time, reminding me of the power of place and live performance that is too easily forgotten. We are now instant fans and will be seeing much more of this exceptional chamber orchestra. It also spurred us to do rather more to introduce the kids to the classics, which we have perhaps neglected a little. I finished the week booking us all into several performances, though I'm not sure any will live up to the soaring heights of the takacs tchaikovsky. The week was rounded off by the valedictory of my constant companion, the economist's editor of nine years, a great condensed read with which I agree wholly, though perhaps am a paranoid pessimist rather than his optimist; but that's for another week.
Attached File: City of London.pdf
24 january 2015, n-n-n-n-nineteen
Apart from a set of estonians and the larger san marinos, I did have a full set of euros coins - yes I even have two sets of vatican ones. My greeks may yet become collector's items, though I don't think so. The greeks indeed could do worse than look to lithuania for some lessons, as they became the 19th country to join monetary union, meaning there's a whole new set I'm after. I visited lithuania several times in earlier days, not least to try and retrace some of the steps very many of my ancestors will have trodden, though even had I known what they were, there is very little of it left. For all its battering, the euro remains strikingly popular in lithuania, with 63% favouring it, up a quarter from last year. This in part will be due to the established way the currency is now introduced, I say with a slight twinge having helped design that but never applied it to my own country. No doubt russia's not too distant rumblings have also had a psychological effect in making any further westward integration more welcome, but another country's embrace of the euro, in a robust and stringent manner (I recall well when they failed the tests in 2007), is also a vote of confidence in the currency, which though small should not go unoticed.
Attached File: vilna shuell.pdf
15 january 2015, greece is the word, again
Many are the doom mongers scenario-planning various outcomes of the imminent greek election, spreading that worst of ailments, uncertainty and panic, around the markets at the possibility of a grexit from the euro. We have been here before (14 may 2012, the unthinkable exit; 16 june 2012, the greek election) and got through, but past performance, as every investor will tell you, is no guarantee of the future. The general relaxed attitude, given that the new greek government seems likely to push for debt forgiveness, seems borderline complacent. My ex-boss lbs provides a very cogent analysis in the ft about why greek debt isn't, or shouldn't really be, a worry, but little market or especially political behaviour has much to do with grounded reality. Its national debt of 175% gdp, he points out, is hardly unprecedented and anyway sovereigns never pay back their debt, they just refinance it and actually greece doesn't need to issue any new debt for quite a while, largely because they've stocked up through the bailout on 30-year maturity. The debt, he concludes, is more sustainable than many other eurozone countries. As was the case at the other end of the crisis (see 7 feb 2010, bring in the imf), greece's central problem remains its economy's competitiveness. The euro is neither the problem's creator nor its solution: that lies, still, in greek hands.
2 january 2015, disaster of the year
2014 was, sadly, another year with many contenders. Close to home, fellow-city glasgow seemed specially cursed, suffering three tragic incidents, of a bin-van and helicopter killing several and its treasured art school, which I never saw, burning down. Of a bigger order, perhaps three thousand would-be immigrants drowned in the mediterranean trying to get to europe. Further afield, dozens of students were abducted and murdered in mexico and hundreds of girls in nigeria were kidnapped from school, still months later missing. Trouble is rising from lawless belts across the world, the middle east probably the worst, with isis crossing several lines of barbarity in syria and iraq, a vicious crackdown in egypt, itself provoking a backlash and libya descending into warlordism. That pretty much describes parts of pakistan too, which had its own even more horrific school murder incident in peshawar. Ebola of course deserves special mention, although the death toll of around 8000 pales beside the 300000 killed by malaria, and double that by tuberculosis. Runner-up for me is the summer's gaza conflict (see 12 july 2014, so many wrongs) and the needless lives lost through the inability to sit down and make something function, in which we the rest of the world have a vital role to play. This particular war may yet come to be seen as the moment the wax set and a two-state solution finally became impossible. Another war though took not just more lives, perhaps 5000, but had more global significance in its slow pace shattering of the post-war world order, which once broken cannot easily be reassembled. Russia invaded crimea with impunity, and the world accepted it. Its military and political succour to manufactured rebels in eastern ukraine destroyed both the ukrainian economy and any chance of a modern, peaceful state growing from a young population wanting to build, and stay in, its own country. For europe, it was a startling break from the post-war norm of diplomacy and international systems settling territorial disputes rather than violent military action - an utter disaster that will have consequences for years to come.
20 december 2014, ttip of the iceberg
One of the many prongs of the european populist uprising (see 26 may 2014, eurosclerosis) is protest against globalsation, the cutting edge of which is ttip: the transatlantic trade and investment partnership. The basis of this treaty is relatively simple: easier trade between nations creates efficiency and raises productivity, so increasing gdp. As europe and the us are still the world's biggest trading blocs, and involved in a majority of world trade, easing trade restrictions would help both, raising eu gdp by around 0.4%. Most restrictions are simply down to different standards and testing regimes. Harmonisation would make things both cheaper and, in theory, better, as the best method should win out. For europe there's a bigger game, in holding back the tide of the adage that the mediterranean is the sea of the past, the atlantic of the present and the pacific of the future. If the eu and the us agree standards, it's very hard but for the rest of the world to follow. Indeed this is precisely the sort of "soft power" (see the big softie) that the eu's whole place in the world rests on. And yet, to american puzzlement, europe is dragging its feet, as fears over chlorinated chickens, privatised health care and dispute resolution hog and clog the few moments the public mind puts to this. Behind it all though lurks that basic fear of the consequences of global free trade. There is now a new trade commissioner in town; let's hope her "fresh start" can overcome the growing antipathy to what's basically the good idea that's made the world turn these last centuries. History suggests retrenchment and autarky lead only to wars.
13 december 2014, justice delayed but not denied
I spent a large part of the intellectual capital channelled through youthful angst and indignation about the world's patent unfairness and all other things wrong considering macro-level human rights, both legally, with a particular interest in the icty yugoslavian tribunal at the hague (probably the most startling and successful international law enforcement of all time) and at the un, where I spent a memorable summer ingesting the universal declaration. The worst abuses are still with us, indeed "we" are guilty of them ourselves, and not just in the past. From the successful model of justice being dispensed to the worst war criminals of the yugolsav conflict came the broader international criminal court, born in the teeth of opposition from america, russia, china and others in the very summer I spent in geneva. I have rarely felt as proud to be british as the moment their swing vote broke from the "permanent 5" pack and the rome statute was adopted. Twelve years on, the court, which also sits in the hague, is approaching maturity, but has hardly covered itself in glory, having cost over a billion dollars and convicted just 2 people. However, that is just journalistic bombast, as justice costs money and the court is a driver at the centre of an intricate process of international law that militates every day against the worst criminals in positions of power acting with impunity. It stiffens the resolve of national courts, politicians and organisations and covers parts of the world which are inaccessible, corrupt and where state abuse is public and ingrained - but no longer as invisible and untouchable as it once was. That it is so focused, especially on africa, may yet be its undoing. The hague and what it stands though is an important pillar of our future world we would all be poorer and less safe without.
9 december 2014, peaceful parastine further away than ever
Palestinian liberation had two basic phases: violence, characterised by gross massacres such as the avivim school bus bombing and munich and negotiated settlement, of which oslo was the apex. As that froze and fizzled, the palestinians zig-zagged between the two tactics; the hamas gaza break-away kept violence in continuous competition for leadership with the mainstream's ever dwindling returns from diplomacy. A big chip was palestinian statehood. Yasser arafat stayed his hand for promises never delivered (see 16 april 2011, signing palestine's birth certificate), but more recently his successor, mahmoud abbas, made remarkably transparent, sustained and consensual progress (see 1 december 2012, yet another small step to parastine). When decade-long talks collapsed this spring (see 4 april 2014, timecheck: quarter to trouble), a key contributor to the barbarity of this summer's gaza conflict, the push for statehood was renewed. The pressure not to undermine negotiations long kept pro-independence sympathies bottled up. Now they seem set to explode, the push coming strongly from europe. The now-fallen swedish government went first, followed by the veritable british parliament, the irish, spanish, danish, belgian and european parliament itself. The rationale is sound: supposed supporters of a two state solution must support israel being a state, and support palestine becoming another. It needs to come into being the same way the state of israel itself did, or more recently kosovo. Time, the settlers' rise and the israeli-only infrastucture and security that surrounds them have viciously and remorselessly cut away at a realistic prospect of a palestinian state alongside an israeli one, forcing both sides to seek alternatives. The proposed jewish state law that broke the israeli coalition was exactly part of that emerging rightist stream of thought: listen to naftali bennnet, its leader. With the most right-wing government in israel's history now in (caretaker) power until next march, these are perilous, perilous times, with all signs, on all sides, pointing in the wrong direction.
15 november 2014, common consolidated corporate parking
Common consolidated corporate tax and base are not words to send a surge of excitement through journalists or their reading public, but that is what is behind the ever-bubbling stories about amazon and their like's taxpaying habits, recently attached to now-european commission president juncker. Given that everyone best plays the system they find themselves in, his deflection to the european question is not unreasonable. The basic argument (heard both nationally and at european level) is the merits of tax rate competition versus harmonisation. However, we cannot even have that debate because of the massive variance between national tax frameworks. Comparing ireland's headline 12.5% corporate tax rate against germany's 30% is apples and bananas. Whichever way the competition v. harmonisation cookie crumbles, ccctb, as it is lovingly known, is a precondition and brings significant transparency benefits. Achievable is a single cross-border ("29th") regime, available to companies operating in at least two member states, enabling them to calculate group taxable-income on one common set of rules. Tax receipts would be divided between governments, according to each company's weight there. This would significantly reduce compliance costs, for some companies, by 500% - aren't we supposed to be obsessed by "reducing the costs of doing business here" ? - and reduce double taxation problems, as well as helping with transfer pricing. It would massively increase taxation transparency, helping eliminate tax distortions, administrative burdens and so, probably, the amazon issue. A dozen or so member states are in favour. However, while ccctb doesn't necessarily mean loss of national sovereignty, that is the perception - and it certainly leads to that possibility, currently excluded by opacity. A value-adding europe would be asking whether this is best achieved just for the eurozone through the new lisbon procedures or for all members through enhanced co-operation. In reality, the issue/opportunity is parked. Tants pis. Reverting to my european law days, I know of course it is not so simple: lisbon probably don't stretch to it and enhanced co-operation may be excluded (though I think not) because of the unanimity requirement for council decisions on taxation and with the eu only being able to act where necessary for the proper functioning of the single market - but now, as on so many matters european, I feel I am losing you...