Blog
25 august 2012, eur in or eur out
In my frankfurt days, the financial times was the indispensable daily coverage on europe, but it was the economist I read for everything else, and which was the last (even now) to resist my falling into the internet, even if reading it all, once a job done by saturday lunchtime, may now take weeks. I remember when the charlemagne column started, and how I compared my own meagre effort to it, occasionally beating them to it. Over time, it has become considerably less brusselsphere and more anglo; a shame. I must admit though that a few weeks ago it struck a chord, reflecting how the euro, intended as the step to cross the no-going-back rubicon in bringing member states closer together, has actually ended up by more strongly differentiating them: "the euro has now set the convergence machine in reverse". It name checks a report (for tomasso, my old boss, see 25 october 2009) of an old colleague, now at hertie (which I went to) and bemoans the "one size fits none" interest rate and judges the euro a failure. This is harsh. As much as its first decade lauded as all-conquering triumph was an exaggeration, so its second as inevitable decline and collapse is similarly overblown. The euro will survive, and in due course thrive. The strategy is the right one, and well conceived, even if the tactics have been poor and inconsistent, to say the least. Europe has survived sclerosis before and will do so again, though that won't stop this being a fraught decade for all.
23 august 2012, I go driving...
A side effect of my other half being in budapest with the kids, is that I get to drive to work rather than my usual bike-train combination (26 september 2010). Not that I'm complaining; in fact I'm rather proud of both the health and public transport aspects of my norm (13 and 2 december 2009); but things are definitely easier with my resource burning, expensive car park using, single passenger citroen picasso. My northern think tank friends brought out an interesting paper on this today, showing that contrary to uk public perception, motoring has actually got cheaper over the past 20 years - even as the cost of public transport has risen by over 60% in the last 10. This is surely ludicrous when policy should be getting people out of their cars. The paper comes up, though a little irritatingly guardedly, with the obvious route, road charging, which simply won't be accepted here, despite being the norm in most of europe, as we experienced last week driving up and down rather nice spanish highways. It surely makes sense for those using the roads to pay for them rather than receive public subsidy better invested elsewhere. Above all I am a believer in rewards and incentives, and until people are priced out of driving alone in a car and the alternatives, like cycling and public transport, are sufficiently cheap and convenient, the carbon will keep on flowing, and the roads will keep on expanding. They paved paradise...
16 august 2012, homage to homage to catalonia
During the earlier part of our stay, I got through one of the few george orwell novels I have never read. Perhaps I was waiting for this occasion, as it made it so much more exciting to read of the paving stones of la rambla being torn up and thrown into barricades one day, and to be treading over them the next. Evenings with the book was history and the sarcastic culture of war, which complemented wonderfully the sights and sounds that filled my days. If it isn't his greatest work (apart from the obvious, that would be burmese days), it makes up for it in vivacity and the acuteness of its chronicling of a unique period in a unique place that has always fascinated me. It's very readable, and I thoroughly enjoyed it. As I did two from my current favourite author, paul auster: invisible and winter journal. The first showed patches of his best (the book of illusions, or perhaps the country of last things), and the latter touched me quite profoundly. So, as orwell said of his journey home, away from the mountain and the vine, back to the meadow and the elm.
9 august, barcelona etc
So - I'm on holiday; and apart from a few kid-parent arguments, its all going very well. Barcelona is a fantastic city, and we tried valiantly to see the best of it in 4 days: the amazing architecture, la pedrera, guell parc and the sagrada familia, the most amazing cathedral I have ever seen in my life. It quite makes manchester's own modernist temple - old trafford - look like the poor collection of plastic and metal it is; indeed the city as a whole can't hold much of a candle to the size and depth of this wonderful city by the sea that is such a masterpiece of style and scale. It is also close to the mountains, and right now we are at the end of a few days away, first driving through the pyranees to andorra, and now a couple of days over the french border in perpignan; still though all very much catalan. Tomorrow, we drive back along the mediterranean coast for a few days at the beach, and then back to the heart of the beast for a final few days of gaudiville. Having a wonderful time.
24 july 2012, y viva espania
My first exposure to spain was probably the song, a british phenomenon of my early childhood; and it then bounded around asterix and never being able to work out why rain should fall on a plane. I have only actually ever been there once, a short weekend in barcelona, when I was working in a building with students and never even got out to see the place. Fifteen years on, I'm finally going back, on our family summer holiday, and so as well as looming large in my thoughts on europe - will it be the straw that breaks the euro's back - it is also now in the forefront of my personal life, as we check out beaches, museums and restaurants. Though I've still a week and a half to go, my mind is already slipping into holiday: a fortnight based in the catalan capital, with a little excursion in the middle, to perpignan in france, and to andorra in the middle, a tiny principality nestled in the pyranees. I thought that was one of the only two sets of euro coins (of nineteen) I don't actually have, but it turns out to be monaco and the vatican. Oh well; can't wait.
23 july 2012, still waiting
Three months after the london riots of last year, justice was being efficiently and deservedly meted out to many rioters and looters; but the wheels seemed astoundingly slow for the potentially worse crime that sparked them off. Almost a year on, and we're still waiting to find out who killed mark duggan (26 november 2011). One verdict at least is in, on the death of ian tomlinson, a passer-by struck for no reason by a policeman managing crowds demonstrating against the g20 in 2009. He subsequently died, one of 1,433 people since 1990 who have either died in police custody in the UK or following other contact with the police. The policeman, simon harwood, was cleared of manslaughter last week. The jury, as is the system, was not aware he had been investigated a number of other times for alleged violence and misconduct. The responsible body (whose scrapping is yet again being called for) wasn't even going to investigate until a compelling video came to light. Meanwhile, there seems no timetable on the mark duggan case. Justice delayed is justice denied.
22 july 2012, back to the balkan future
A few short years ago, the prognosis for balkan countries joining the eu was good. In the enlargement report of 2006, croatia was on track to join by the end of the decade, macedonia was lining up to be a few years more down the line, montenegro and serbia were making progress, and even albania, kosovo and bosnia were treading a serious long-term path. How times have changed (25, 26 may 2011. Romania and bulgaria joined in 2007, but have since been the leading case for why to go no further. Slovenia made it in 2004, redefining itself from balkan to central european, and croatia, still kind of on track, has not joined yet, and much will continue to slow it down and stop the rest: the battle against turkey made all defences keener; greece, once the poster child for balkan integration is now an utter disgrace; and the crisis it caused has swept all before it. Enlargement, at best, is a distraction. Their best route may in the medium-term may be the emergence of a uk-anchored outer (non euro) ring, which in better times, becomes a champion. Meanwhile, the solution doing the rounds is for a "balkan benelux", with albania, kosovo, macedonia and montenegro building new "mini eu" structures that will one day enable them to join the real thing together. Meanwhile, the virtues of a common market of 8 million people can bring rather more immediate benefits . This is a good idea, although the deep irony is that the benelux took inspiration from the (albeit coercive) "best in class" pan-nation state shared sovereignty model of its time: yugoslavia.
12 july, 2012, tale of two cities
Between home, work and the trust, I have been absolutely submerged these last weeks, hardly able to breathe. The effect was amplified as my hungarian niece has been staying, and so we filled our weekends first with a long-planned trip to paris, and then an impromptu one to london. The french spur was a very good session I had at the oecd, and then the family was reunited for a sunny long weekend as unashamed tourists climbing the eiffel tower, taking a boat up and down the seine, visiting notre dame and eating ice cream on the ile de la cite. The kids loved the place but less the touristy bits, so on the last day we split and I went to science city, which was actually very interesting and fun. London was much the same: up the london eye, along the thames, parliament, hampstead, the natural history museum, for them the tower of london, cocktails and the mousetrap, and for us legoland and in particular, their latest obsession, the new star wars exhibition which was less exhibition, more shop, so didn't get away scot free. And lots of rain. All quality time though, great fun, but absolutely exhausting weekends between exhausting weeks - and we're off again this weekend, although to the closer shores of crosby beach. Time really at a premium.
6 july 2012, the bank-lash begins ?
LIBOR is something rather obscure I had the pleasure of using back in my days as a corporate lawyer; me and other thousands involved in the $400 trillion or so of contracts that use it as a reference. There are now many explanations of what it actually is and how its calculated, but it's actually quite a banal index that is used by many parties, including the banks, in contracts with each other. There seem to be two issues. In the first phase, some traders might have been trying to fix it for their own gain. They could conceivably have budged it, but only by the merest margins, although on the volumes traded, that might still have added up to a tidy sum. This is dishonesty, as deserving of prosecution as any other falsehood. The second phase though seems to have a macroeconomic element, in that no-one wanted to report the rates they were really borrowing at, as it would suggest they were in trouble, which in the febrile atmosphere after the lehman collapse would quickly have become a self-fulfilling phrophecy. Although the evidence is only now seeping out, there seems to have been senior management knowledge of this, and understanding, if not even encouragement, from the bank of england, who were desperate to avoid any further big banks going under. If anyone suffered, it would have been pretty evenly spread, as everyone uses libor as a reference, both debtor and creditor. It is unclear whether laws were broken, and I suspect we won't see successful prosecutions. Reputationally though, this is yet another disaster for the banks, whose credibility is absolutely shot to pieces; and maybe we will finally see the fight against them really taken on. They have few defenders.
25 june 2012, hot potato
When public money is increasingly tight, welfare payments inevitably come under scrutiny; as now in the uk. Work on the main political parties' manifestos for the next general election, which will take place on 7 may 2015, is underway, and with the conservatives convinced that welfare reform, as well as reducing immediate costs, is a vote winner, the prime minister has floated a wide variety of ideas. My experience of unemployment includes my father, in manchester 25 years ago, and my other half, in frankfurt about 5. While one got a very small amount and was basically left alone, for many years, the other got real training she needed to get work (german lessons) and also two thirds of her (very good) salary, but only for a year or so, after which it would have gone down in stages - a real motivator. There's also salutary experience from scandinavia (generous) and the us (not), where bill clinton's major "workfare" reforms of the 1990s led to cases of the vulnerable slipping through the net, but in vastly greater numbers also shrank the massed ranks of the unemployed. Their strong economy and a transparent wage subsidies scheme (like tax credits) helped, but the drop in unemployment was so large that workfare clearly played a major and positive role. All of which goes to show that floating ideas is good, and debate is positive, but few things are as illuminating as facts and comparators, in this case of other countries' systems, successes and failures. I look forward to reading much more on this in the coming months to help understand what has the highest chances of working, and what less so.