Those are crazy ideas, US!

Free trade with the US?
Sure. Free trade is a good thing and bigger markets to sell European stuff has to be a good thing, right?
Open borders?  I´m in favor, the more circulation, the merrier.
And it is going to bring us tens of thousands of new jobs as well as € 120 bn in cash, I hear.

Still. How exactly will a free trade agreement with the US achieve all that since there are very few barriers in place between the EU and the US in the first place?
As the European Commission puts it: …”the economic relationships between the United States and the European Union can be considered to be among the most open in the world…”

Yep, the US is our biggest trading partner and we´ve done away with most customs and trade barriers ages ago.
The barriers we´ve bothered to keep in place are for our own protection.

For example: The US farmers feed their livestock antibiotics from birth, just in case. This we don´t allow in Europe because we know that people eating the meat off those animals will most likely become resistant to antibiotics and not respond to treatment, should they fall ill.

The US allows growth hormones for animals – the bigger, the more meat to sell! – whereas Europe has put a stop to that, not wishing to have humans stuffing themselves with hormones.

The EU has all sorts of cumbersome hygiene rules for handling chicken and other birds where the US has only one: The birds are dipped in chlorine before being shipped out to stores, so as to kill off all germs and bacteria.
The EU does not allow any chicken dipped in chlorine on its territory (thank god!)

But apart from a few of those life style choices, Europe is pretty much an open market for any American goods or services.
So I can´t think why these very same European rules and regulations keep popping up in documents on the negotiating of a future Free Trade Agreement with the US.

“…most importantly, regulatory differences for goods and services act as greater impediments to transatlantic trade and investment flows…”

Yes, they do that, act as impediments. This is how we want them to act. No chlorine chicken here, please!

“…can result in additional burdens for EU and US businesses.”

Obviously. But for a good reason. So let´s take them off the table at the outset, OK?

The bulk of US exports enter the EU market at very low tariff rates and the EU services market is already very open. Therefore, the US is likely to aim at achieving its objectives by concentrating on the remaining tariff peaks (mainly for agricultural products) and on certain aspects of regulatory measures…”

OK, right. So the US may want to use the negotiations to make us remove these “impediments”.
But we don´t.
Remember, we have the upper hand here. The EU has had a surplus in its trade with the US for years. A surplus of €92 bn only last year, for example.
(Well, what can you do, that´s capitalism for you. We must be selling better stuff to them than they to us – the market forces rule.)

Also, did you notice that trade to the US is falling?
“Between 2000 and 2011, while EU exports of goods to the world increased at an average annual growth rate of 7.6%, EU exports to the US only grew by 1%. Meanwhile, the purchases of goods from the US represented 20.8% of the total imports of the EU in 2000 and they only accounted for 11.1% in 2011 (a reduction close to 50%).”

It´s China, you see and the Brics. We are redirecting our forces. Besides, doesn´t it come into play at all, the fact that the US is heavily indebted?
Basically, we have no reason to accept just any old demand from the US.

The US demands more of us in these negotiations than that we change our current rules?
They are asking for ……”the establishment of a bilateral process through which the US could provide input to the EU’s process for setting standards, norms, and systems in a variety of fields…”

They ask to have a say in how we legislate in the future? They´re not shy, I`ll give them that.
Well, they can forget that!

Do they not know that there´s a heated debate on in Europe precisely on how European legislation is conducted?
Have they not heard British Prime Minister David Cameron, Dutch Prime Minister Mark Rutte, Swedish Prime Minister Fredrik Reinfeldt and recently, com to think of it, German Chancellor Angela Merkel?
They all argue most vociferously that the EU is meddling too much in member countries affairs.
They demand to renationalize powers.
They will not have outside forces interfering in their countries and how they are run, so there.

So you see, there´s really no way that they would hand over the very same powers to a foreign state.
No way.
Because if they did – what´s next? China is rapidly becoming our largest trading partner and China too wants a free trade agreement.
Are we going to give China a say in the security of toys, maybe?
Shouldn´t think so!
No way the UK, Germany, Sweden and the Netherlands would give up sovereignty in this way.

Yes, I admit, it is a bit of a paradox that the very same leaders are also the most vociferous campaigners for a free trade agreement with the US – and they all despise the French for wanting to safeguard some sectors – but when it comes to the crunch, they will defend our sovereignty…I think……right?…

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8 Comments

And now, points for the British entry

Brussels, 20th of March 2014.
Office of H.Van.R.

To the hands of: UK government
Regarding: EU summit

Thanks for your contribution, UK! Great idea, this: “The EU needs to wean itself off its dependence on Russian energy.”
To think that no one has thought of this before!, … oh, yes, that´s right. The Brussels bureaucracy did.

Planning for how the EU can wean itself off its dependence on Russian energy has been going on for some time now.
The European Commission produced a plan in 2006, for example. Remember, the cold winter when Russia turned off the gas taps for Bulgarians and Poles? It seemed obvious for anyone interested not only in what´s going on under their own noses, that the EU needed such a plan.

You may have noticed the subject coming up at every Energy Council where it is a standing point on the agenda? Too bad you haven´t had the opportunity to support it until now. The EU might have come a long way already, since 2006.

But let´s not be petty, at least the idea came to you now. (I´m just a tiny bit surprised, seen as you normally feel that the EU shouldn´t meddle so much…but we can all change, can´t we?)

You even have new ideas on how this can be done, UK. Great.
And your idea is that we buy more energy from the USA, some of their surplus shale gas and also to buy natural gas from Iraq.
Ah.
As I mentioned, the European Commission had a plan too, back in the days. However, it did not involve simply getting more dependent on another foreign source of energy, such as you propose.

What´s that?, not so foreign really, seen as your British companies are heavily involved in American shale gas and in Iraqi natural gas?
Good for you. I believe though, it still means that non-European states would hold a key to energy supplies.

Thanks anyway, for giving the whole thing a thought.

But while we´re on the subject of weaning-off-Russia, may I suggest that you also start weaning yourselves off your dependence on Russia?
I´m not talking energy. You don´t buy gas  off the Russians, do you ? so your plan would, of course, not force you to change much at all.
Your plan asks only of others to change.

Nor would it demand any effort, by the way, of the two EU governments that have come out in support of your weaning-the EU-off-Russian-energy-dependence-plan, Sweden and Denmark.
Sweden buys no energy from Russia and Denmark next to nothing.

(Incidentally, both countries are doing exactly what we suggested the whole of EU should go for back in 2006 – they have been expanding the renewable sector so much they´ve heavily reduced their need of importing energy.
How much have you raised your share of renewables, UK – from just under 5% in 2009 to…really? 4.1% last year?)

Sorry, lost the plot there for a while, I was saying… yes, about the weaning-off-thing. Russian money, you are rather  dependent on it, I understand?
* Russia’s oligarchs, business people and senior officials have become one the largest national groups of buyers for London properties worth £10m or more.
* These individuals have also become a key customer segment for London’s wealth management industry.
* There are now 113 companies from Russia and the broader CIS region with shares quoted on the London Stock Exchange.
* City-based banks are also engaged in Russia, through funding lines.
(I´m not trying to make you look bad, just quoting your press here, the Financial Times.)

So, if you do your homework and – if I may be as bold as to suggest – try not to get in the way of others doing their homework with your constant bickering about how Brussels interfere in national matters – I think we will be able to get somewhere.

But thanks for joining in, for once.
Best H. Van R.
P.S. Yes, yes, yes…of course, I will add your paper to the summit documents and I have no doubt many heads of state will applaude your contribution heartily so you can declare yet another victory in front of your national press.

 

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8 Comments

Am I in an episode of Game of Thrones?

I do enjoy the TV series Game of Thrones but I also find it testing. Extremely testing, I lose patience with it sometimes.
Who´s the good guy here, who I am rooting for?
With every new twist of the story, the formerly-good-guy reveals himself as just as selfish and cruel as the bad guys. Then the story takes a new turn and the good-guy-turned-bad is treated abominably by the bad-guy-turned-good and I have to switch allegiance   again.

It´s very much like watching peoples in our neighbourhood struggling for democracy.
I´m following the development on my screen, hoping for the good people of Ukraine, Turkey, Syria and Egypt, cheering with them when things go their way, thinking yes!, this is when EU with its soft power steps in and shows the way towards democracy, rule of law and eventually prosperity too.

But then there is a twist and I lose the plot.
Half a Ukraine remains untouched by the protests and many of the people there are pro-Russians? There are Fascists among the brave people of Kiev? Someone in the current interim Ukrainian government has hired snipers to shoot at civilians?
The Syrian rebels are (already) fighting among themselves? And al-Quaida has taken over parts of the uprising against tyrant Assad?

Turkish Prime Minister Erdogan who stood up to the military rule and introduced rights for Kurds is a villain now, trying to impose all sorts of vaguely religious rules that the Turkish people do not want. Who is the good goy now then?, surely not the military again even though they seem to stand for the secular society that people appear to desire.
The Muslim Brotherhood of Egypt that protested alongside the young people in Thahrir Square try to install a new dictatorship as soon as they´re in power and the only recourse is going back to being ruled by the military?

It´s Game of Thrones all over again, I can´t keep up.

Seems there was a time, not long ago, when it was easier to take a stand. The left took the side of any popular uprising, the right went with whatever party the USA chose to side with.
This was before the Internet.

Do I wish for the EU to take a stand against Russia in the Ukrainian conflict and offer Ukraine a good deal? Absolutely.
But who to make a deal with?
Is it safe to go with the self-proclaimed leadership of Kiev or will they turn, as others have done, and show us a scarier side to them? Angela Merkel seems to prefer some of them to others, why?

Do I want the EU and the US to help the rebels against Assad? Of course, I do. The Syrians deserve our help.
But how? And who will we be helping exactly?, will it be people that later on reveal themselves as hard-liners just as the Muslim Brotherhood did?

Maybe the European Union not having a common foreign policy worth the ink of the paper it´s written on, is not the worst thing in the world.
We know that when the going gets rough, it takes a good while for the EU to get going. 28 countries must agree, all with different historical ties to the concerned, and probably more importantly, all with different commercial interests.
That does accord us time to discover new twists of the plot, time to decide what´s the better way to go about things… or to get even more confused.

For confident advice on how to handle the situation, please turn elsewhere.

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3 Comments

The win-win of EU bashing

I was at a seminar in Copenhagen the other day… no, I should probably admit that I was one of two people leading this seminar.
(It is not out of modesty I hesitate to mention that. The discussion somehow got away from us and the whole thing turned out a bit of a shambles.
My apologies to everybody present for that.)

Anyway!
The subject was the licorice pipe-story. You may have come across it, it is yet another of those news of how the EU I banning this, that or the other. They´re usually good fun so they get enormous coverage in the media and politicians are never shy about popping up and giving the EU a good old bashing for it.
You know the kind of thing I mean.

We had a number of these headlines at the seminar and if not informative, (you´ve seen one, you´ve seen them all) at least we had a good laugh:
”The EU is banning vacuum cleaners”, “The EU is banning the Queen from our bank notes”, “The EU is banning the United Kingdom” (I kid you not).
Most of them came from the British press and used words to describe the EU or Euro MPs as “bonkers”, “crackpots” or “madhatters”.

By the way, the EU is not about to ban licorice pipes. Of course not. I feel a sudden urge to emphasise that because these stories do have a persuasive note to them.
And this is precisely why they really are more than just a bit of fun.

Put together the sheer number of these kinds of news stories and the amount of attention they are getting, then add to that the lack of attention and coverage that proper EU news get (f ex, 700 000 Europeans die from tobacco use every year, most of them started smoking as teenagers, the big tobacco firms are targeting the young and the children.) and you can start to see that the problem.
These mad stories end up being the ones that shape peoples´ perception of what is going on in the EU.

How can democracy work when people don´t know what is being done in their name or, are under the impression that what the EU legislators are doing is completely  irrelevant?
I don´t have to remind anyone of the fact that the EU nowadays regulates most aspects of our daily lives.
You may love or hate that fact, but you need to be aware of it since it concerns you.

So is there anything to be done about it and in that case, what?
Unfortunately, I don´t think there´s much we can do.

The way I see it, your average European citizen is two steps removed from the goings on in the EU. Between him/her there are two actors in our society that we trust to serve us with information on what´s happening.
First, the media. But media no longer serves this function in our societies.
You could blame the Internet for that, slowly killing off newspapers as we once knew them. Nobody subscribes to a daily paper anymore, we get our news on the Internet for free. With readers shifting to the net, so does the ads, making news papers lose out on their biggest income. This of course is forcing them to get rid of reporters in large numbers, leaving the few left at the news desk working that much harder, not offering them any time for research or background.

A licorice pipe story in this context is perfect for the news industry. There is no need to do time consuming research (throw in a mention of the first paper that printed is as source and you´re home free) but if you like, add a national politician saying how ridiculous this is and that Brussels must be bonkers.
It´s a fun and easy read, so it´s bound to get many hits on any website. And having a large number of hits on a website translates directly in to more income from ads.

Second, we have politicians. Most of them positively loooove the “EU-wants-to-ban…”-news.
Of course they do, their political life depends on being seen, getting attention, being in the limelight. How else are they going to win votes?
But in order to be noticed through the constant noise and chatter, they must express strong opinions, be firm, and preferably fight for something or against something. Being firm and strong generally carries a risk of stepping on somebody´s toes which is a thing no politician wants to do… the great exception to this rule, of course, being the EU.

There is no price to pay for a politician to come out in full fury, railing against the lunacies of EU. “The EU” is not very likely to answer back, to defend itself. No voters have ever turned against a politician for defending (what for the short sighted looks like) a national interest or even better, a long standing tradition.
Attacking the EU would appear to be the safest way for any politician to win votes. (Ironically, that is even true for politicians running for the European Parliament.)

There you are.
With the two main actors standing between the ordinary citizen and the EU actually gaining from this constant EU bashing, I don´t see how it is going to change anytime soon.

Oh, and by the way, my partner at the Copenhagen seminar, more practical minded than me, would have offered you a useful test for the next time a funny EU-story appears in the news:
Try replacing the word “EU” off the headline: “EU wants to ban vacuum cleaners/candy/walks in the park”, with the name of your Prime Minster or national parliament:
“Rutte wants to ban vacuum cleaners”… “Kenny wants to ban licorice pipes” …
Naah, don´t think so, right?
You may dislike the politicians running your country butat least you feel pretty confident  they are not outright crazy.

Well, if a news headline doesn´t stand up to this test, it most likely isn´t true for the EU either.
After all, it is the very same politicians, the same political parties that run our countries, who also run the EU.

16 Comments

Wings of change

If the fluttering of a wing of a butterfly in Brazil can start a storm in Asia, just think how the turning of a wing of a windmill in the Baltic Sea may shape Europe´s political future.

Here´s how:
The former super power USA has lost interest in the Middle East.
Oh, they´ll say they haven´t but we first noticed it during the Arab spring when, after initially calling the dictator Mubarak a factor for stability and a strong ally, the US opted not to save their ally from the wrath of the people. The US would then have very little to do with intervening in Libya, President Sarkozy had to twist their arm to make the Americans at least threateningly park their battle ships on the coast line.
Then the US would not intervene in Syria. Now President Obama is talking soothingly to its long-standing enemy Iran.

For a while the change of course could be interpreted as being the work of a somewhat liberal president Obama. But we´ve since seen how powerless he is in Washington, so that clearly is not the answer.
Is it because the US is so poor they can´t afford to defend their interests?
That could be part of the reason surely, but they don´t act as if they are poor, still happily borrowing trillions (4 of them last year) of dollars and spending it.

No, the main part of the reason is more likely oil.
The US don´t really need the oil from the Gulf anymore, so why spend money and ressources[1] combating the unrest in the Middle East?

This is all thanks to discovery of shale gas and light oil, turning the US from the largest importer to the largest producer of oil in the world 2013. In 2004, the EIA projected that the U.S. would need to import 5 trillion cubic foot of liquified natural gas by 2025. The EIA now predicts that the U.S. will be exporting the same amount by 2025.

As a result of this American twist of fate, the status quo of the Middle East exists no more.

Israel has already got the message loud and clear and can see it is now on its own. Its politicians may spend their mornings railing against the USA, they spend their afternoons tying up new relationships, with France, with Russia, with Mexico, with China and Australia.

Saudi Arabia, no longer vital for maintaining stability in the region – this no longer being a priority -  nor for oil supplies, and therefore silently dropped by their great ally in the West, turned in desperation to Russia, hoping to make a deal, oil supplier to oil supplier.
It would seem the Saudis went about it the wrong way and clumsily angered Putin into becoming even more of an enemy than he already was (here´s an account of this, can´t vouch for it being true but it´s an interesting read).
The royal family of Saudi Arabia is also on its own. Will they be the next dictatorship to face the people´s wrath?

Or will it be Russia?
See, Russia is not in such a good situation either what with the oil price falling and its oil exports being priced out of the European market by cheap coal from South America (a commodity that used to sell well in the US but the Americans, rich on shale gas and oil, are not buying anymore).
So Russian export incomes are down… and the Ukrainians are thinking about signing up with the EU instead of Russia? That has to be stopped, pronto!

To convince the Ukrainian leader at the very last minute (remember?, the EU leaders were waiting with the agreement in Vilnius, pen in hand, sumptuous dinner set out for after) proved not so hard. A 15 bn bail-out and President Yanukovych was their man.
To convince the Ukrainian people is proving much harder. Just to make sure the EU doesn´t get any ideas of meddling further in this Russian-Ukrainian affair, the Russian foreign minister Sergei Lavrov took to TV the other night and warned the Europeans to stay out.

Putin and Lavrov can rest assured, there may be harsh words from the EU but there will be no European intervention in the Ukraine. No European country has much appetite for intervening in other countries businesses (not quite true, French President Hollande would have us all storm over to the Central African Republic, ostensibly so as to save refugees from getting shot but really to save his terribly unpopular Presidency. Even with this war being about a really tiny enemy, he is not getting many offers from other EU countries).

Ah, but don´t relax just yet, Mr Putin.
Sure, the EU is not about to step up and try to be a super power/world police now that this position is wide open what with the USA on the decline[2] and China not ready to step in[3]. But far away from the foreign ministers and defence ministers, the EU is har at work, creating an energy single market.
And energy, as we´ve seen in this tale, is a vital part of politics and of independence of super powers.

Only two days ago, the EU commission presented a new master plan on climate and energy and guess what, Europe looks like it´s going full steam ahead with expanding the sector renewable energy (the UK is against, obviously but they do not win many fights in the EU these days).

Not realistic? Between 2008 and 2012, the EU countries rasied the total share of renewable energy to 12.7% (from 8,5%). Some countries are better placed than others to expand the sector of renewables – the Scandinavian countries have a surplus of energy, have between 23 and 50% of renewable energy in their mix already and are busy as bees building more and more windmills. This  will be useful for everybody now that the EU goal of 27% will apply to the whole Union instead of nationally.

And that´s how a fluttering of the wing of a windmill in the Baltic Sea may change our political situation, by buying us independence from Russia, the Middle East and others.


[1] …and there you have the “being poor” part of the argument.

[2] Oh yes, the debate on whether the US is in a decline is over. The debate is now on whether the US will stage a come-back. (I´m happy to be convinced but the US haven´t found THAT much shale gas, you know.)

[3] …and might never be. Let´s not count out the Chinese population. The idea of freedom is intoxicating, look at the brave people of Ukraine. And Turkey. And Egypt. And…

19 Comments

It´s not you, Mr Schulz – it´s me

I would like to discriminate against you, Mr Martin Schultz, on grounds of nationality. I do not want  you to become the next President of the European Commission.

It is not a very European thing to do, I´m aware of that but I believe it is the right thing to do, under the circumstances.

I´m not holding against you the fact that Germany dominates the European Parliament. You have more seats than anybody else on account of there being more of you Germans – fair enough.
Also, the German members of the European Parliament are playing the political game skilfully – good on them.

I´m not even holding against you the interference from your government in Commission decisions concerning the European car industry or the lack of competition in the German energy sector. Germany will defend its national interest in Europe at every turn – as is logical, as does every other EU country.

What I am holding against you however, is your Chancellor, Angela Merkel. She is simply too good.
She has the personality; she has the tactical game down to a T. There is no other politician in her league in Europe.
This is a serious problem, to my mind.

EU politics need to be balanced between different national interests; otherwise the outcome will not be the best for Europe as a whole.  And there certainly is no balance to be had, when the only strong European politician comes from the economically strongest and most dominant country.

Now, if you Mr Schultz came from an almost-as-big country but with a President scrambling in vain to get a grip on domestic politics and blundering about European politics demonstrating no insight whatsoever into how it works, then I wouldn´t feel so worried.

I´d feel safe too, if your home country was a big island-country but with a leader trying to bully people into unravelling the whole European game in favor of playing it his way, but having with so little clout that he ended up playing alone.

Or if you came from an also-big-country where a rapidly shifting succession of Prime Ministers were busy scratching each other’s eyes out – I would rest easy.

Let´s say your quite-big/smallish/small country – or your country´s whole bank sector –owed a lot of money to the biggest country in Europe. Well, then I would relax knowing that you could not allow yourself to push your opinion through at every occasion since you would totally lack credibility.

Also, if you came from one of the calm, successful countries in the north where politicians turn themselves into lame ducks in Europe, by preferring as their main domestic strategy to vilify Europe, as a way to win the national vote.
I would sleep soundly at night.

But you don´t, Mr Schulz. So we have a problem.
As long as there´s no serious counterweight to Mrs Merkel, most decisions will tend to German needs, not to European needs.
This is how Europe has lived through the financial crisis and it still goes on. The scariest example recently was Germany pressing for the EU banking union giving the last word last word on future decisions about failing banks to EU governments.

Next time around (and there will be a next time, unfortunately) Europe needs some hard-headed businesslike decisions on banks in trouble, we do not need politicians protecting rubbish banks because they believe it will secure them the next election.

That´s what Mrs Merkel gave us the first time so now we know for a fact that the common European market is not well served by having decisions taken on banks based on national interests. What Ireland did to protect its banks, spilled over on German, Danish and British banks. What Germany did spilled over on Greece. What Italy did, affected France, etc., etc.
(Some figures to sum it up; since the global financial crisis, 500 American banks have been closed and 40 European banks. That would indicate several hundred ailing European banks still being in business and if so, running on tax payers´ money.)

And this is why I am not comfortable handing over the post as President of the European Commission to you Mr Schultz, although the EU treaty says the candidate should reflect the outcome of the European elections and the European Socialists have named you, should the European voters be favorable to the Socialist side of politics.

It´s unthinkable to have a German running the European Commission as well as the European Council while at the same time dominating the European Parliament.
It´s nothing personal.
For me, you are out of the running, on account of being German.

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12 Comments

The time for believing is now

So here we are – the EU has now got itself a Banking
Union. The biggest centralisation of power in Europe
since the creation of the single currency, according to the Financial Times.

But!, say hordes and hordes of critics, it´s a rubbish banking union. It´s not
even properly done yet. Loads of important – even crucial detail – has been
left for later.
And the money in this rescue fund! Ridiculous. Wouldn´t even do for saving a middle
sized Irish bank and when they went bust, they all sank together.

No matter. It will happen anyway.
You see, this is a classic EU move, this is how the European Union does it.

They decide upon the goal – in this case a full-fledged banking Union.
They decide upon the date – in this case 2025.
They leave the rest to the indomitable bureaucrats of the European Commission.

Sure, you say. In an Alice-In-The-Wonderland-world, maybe.
But if you know anything about Europe, you know it would be a mistake to discard the Banking
Union on its merits.

Remember the Single Market? The EU summit of 1986 decided to remove all
national borders for goods, services, capital and people – basically in 300
different sectors of the economy – by January 1993.

Now, see the clever thing with the date?

You must set it far ahead, enough to make sure that the politicians actually making
the decisions will not have to deal with the uncomfortable reality of it (i.e.
facing their voters).

That what´s makes it possible to agree on an enormously ambitious goal – it might
never happen!

I know that in my country people laughed at the very idea of removing borders
in Europe. The Europeans hadn´t even been able to a harmonize standards for a
midwife education and they´d been at it for 17 years!

But the Swedes were proven wrong. True, every EU government huffed and puffed
their way through the harmonizing work but they all caved in under the argument
that it had already been decided, it was just the details that remained to be
ironed out.

On January First of 1993 the border controls were lifted. So maybe not
everything was in place ( som what?, we´re Europeans, we don´t believe ´perfect´ belongs in
this world) but that´s the other thing with the EU machine –it has no reverse
gear.
It just keeps grinding on, relentlessly coming back with new proposals
and revisions of earlier directives.
As I mentioned earlier – the EU bureaucrats are indomitable.
If it doesn´t work the first time, it just might, a second time around.

Ancient history?, just a one-off?
Not so.
The euro? Same procedure.

Impossible, the critics decided. The EU countries would never agree to give up
that kind of independence.
Besides, they were not at all in sync, the economies differed too much and
besides, no way could enough countries meet the criteria for membership in
time.
In any case, ordinary people wouldn´t stand for it.

The politicians didn´t worry, the date was ten years away! And it sounded like
a decent idea to hook on to the German D-mark. (The Germans owed us, so there.)
Everybody went home and forgot about it until the bureaucrats from Brussels started
calling about this detail and that, having to be put in order.
Some huffing and puffing, but what could you say? It was already decided, right?

On January the 1 of 2000, the euro was introduced and ordinary people didn´t
even bother with the three months they were accorded to get used to the new
currency, they switched over straight away.

I f you still won´t believe me, I could tell you the saga of the European Climate
Policy from 2007.

But you know how the story goes by now; Crazy ambitious idea, set for muuuch,
much later, lots of huffing and puffing but in the end, here we are. The only
place in the world where climate reforms still take place while the rest of the
globe seems to have forgotten about the climate changes.

So. This rubbish Banking Union?
I´m willing to bet money on it falling into place.

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7 Comments

The politicians´ European bluff

There was some bad news today for the Swedish finance minister Anders Borg (up for reelection next year with numbers in opinion polls looking distinctly bleak).

The (Swedish) National Institute of Economic Research lowered its forecast of GDP growth, due to the fact that…: “The Swedish economy is being held back by problems abroad, which are only very slowly being resolved”.

Surprised? No, of course not, no one can be. Except the Swedish finance minister…
Mr Borg was never shy in telling the world – and most certainly the Swedish voters – that the healthy state that the Swedish economy has been enjoying (years and years of surplus budgets) was down to him and his clever steermanship.

He wanted nothing to do with the economic problems in Europe. The Swedish government would not lend a helping hand when asked. The euro countries hade themselves to blame. They could have done what he did (he told them so, repeatedly. He is not a modest man).

This was a short-sighted policy. After all, the debt ridden countries of Europe happen to be the best customers and main buyers of Swedish goods and services.
Mr Borg pretended otherwise: “I am protecting the tax payers´ money”, he declared when refusing to lend any money.

He wasn´t really, it turns out.
The richer EU countries that actually did lend a euro or two to euro countries in need have so far ended up winners since their help was given as loans at market rates. The ECB made enough profit out of this in 2012 to be able pay out EUR 998 bn to the central banks, the main share, obviously, going to Germany.
And more is to come.
“Assuming no further defaults”, explains an analyst at German insurance giant Allianz[1], “these programmes should generate a net gain of about 70 bn EUR – 80 bn EUR.”
The German tax payer is the winner here, not the Swede tax payer.

It was short sighted also, to argue like Sweden did (along with the UK, Germany, Denmark and the Netherlands) in favor of a shrinking EU budget over the coming seven years.
It did lower the Swedish yearly EU contribution.
Ignoring the crisis other EU countries are currently undergoing, Sweden even argued for maintaining its rebate on its EU contribution and managed to retain 80% of it.

Now, the EU budget was the one instrument through which richer EU countries could have given a hand to the suffering ones, without this being an outright bail-out (that the rich so worry will create a moral hazard).
Here now was the chance to transfer fresh capital along with strict conditions attached to it, detailing in what productive way it must be spent so as to lift the depressed economies out of their quagmire.
Because if things were to brighten up a bit for the recession countries, the Swedish economy (alongside the German one, as well as the British, Dutch and Danish economy) would be able to take full advantage of this and the Swedish prospects for GDP growth might not look quite so glum.

Lately, Mr Borg has needed another story, what with the slowing of the Swedish economy, the rising levels of unemployment and national election coming up. Mr Borg took the credit when things were going well but he was hardly going to take the blame for things going bad.
So the story of finance minister Borg has changed to: It´s the fault of Europe.

And it is, of course. There is no way that Sweden can thrive when most of the continent is in recession.
The point is, there never was.
Because European countries are part of Europe.

I believe many things would be easier if politicians would act on that simple fact. I don´t see any of us sailing away into the sunset, leaving the messy bargains and difficult compromises behind.

This is why I find it sad to see politicians convincing their public that this is not so, for the sole reason of them winning votes.


[1] Andreas Uterman, Global Chief Investment Officer of Allianz Global Investors, daughter company of Allianz.

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This is a very dead horse – stop flogging

Carbon Capture and Storage never seemed like a very convincing idea. Sucking up CO 2 emissions and shoving it in the ground? Who would want to have that under your feet?
Especially since no one really knows what happens when you displace the stuff that is already there, with tons and tons of gases.

To be honest, I´m not particularly open to ideas of the kind. I also think creating artificial clouds to protect us from the sun is mad and to create artificial trees that suck up CO2 is even madder.

However, seven years of trying and many billions of Euros later, I think we can all agree to drop the
CCS technology.
Here´s why:
1. Out of the 15 large scale CCS installations that the EU planned to have up and running by 2015, there will be exactly – none.

2. The energy companies are dropping out.
The largest CCS installation in the world, Norwegian Mongstad, was abandoned by Statoil and the Norwegian government a few months ago. It had already swallowed EUR 790 Mill (you guessed it, of tax payers´ money)
Swedish state owned Vattenfall gave up on their EUR 1.5 bn CCS project in Jänschwalde two years ago.

3. The European Commission last December had EUR 1.2 bn to hand out for anyone ready to take up the CCS challenge. There were no takers.

You don´t need signs in the sky in this one – give it up, already!

But no, the European Commission keeps at it. The idea was fine and if the reality says otherwise, then the EU governments are to blame, not being prepared to finance their share.
Or else it´s the fault of the European emissions trading system (ETS), not making CO2 expensive enough so as to create a will to invest in CCS.

The EU Commission is out to revive the dying horse, flogging it like mad.

The remedies hinted at, are scary. There is talk of “legal incentives” (force businesses to invest in a technology that they don´t want?) or to rearrange the emissions trade system (and undermine the success of renewable energy?)

And the European Parliament seems just as much in love with the impossible dream of keep spitting out CO2 emissions at today´s rate and have a machine sucking it up so it does no harm.
The Industry Committee of the European Parliament in its opinion actually proposes to artificially create “a competitive environment” where the CCS stands a chance against the renewable energy sources.

How could you possibly do that?, when solar and wind energy today produces at the same cost as coal with no emissions and that´s before you´ve even started with the CCS´ silliness of sucking up CO2 emissions – at a price between 70 and 250 US dollar per ton CO2 emission - that actually creates new CO2 emissions when doing its thing.

What will it take to make them see that it really, really doesn´t work?

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Don´t take their word for it

Denmark is up in arms over the cinnamon roll.  Today´s big story in the media is an EU ban on this tasty afternoon treat. Bound to get you all the familiar reactions.
You get the sighs: “What´s with the EU bureaucrats, have they nothing better to do?”.
You get the humorous protest actions: The politician posting on Facebook how he daringly started his day with a cinnamon roll, the baker putting a funny sign of “Killer roll” on his cinnamon buns.
Another day in EU land.

A couple of weeks ago it was the liquorice pipe in sweets shops which supposedly faced an EU ban. Didn’t take many hours before you had a Facebook group set up in its´ defence and young people handing them out for free in the streets. In your face, bureaucrats!

Googling “EU” and “ban” will give you endless reading material. In the Czech Republic it appears they´ve been raving recently about an alleged EU ban on vacuum cleaners. (Surprisingly, you get people coming out in high numbers defending vacuum cleaners).

In Sweden, you´ll find how “EU bans snuff” , snuff being – in case you´ve not tried it yet– a smelly tobacco paste you put under your upper lip and then spit out when you´ve sucked all the juice out of it.

Forbes has a good one: “EU bans communism”.
Honestly, have they nothing to do in Brussels all day?!

No, Forbes. EU won´t ban communism and obviously nobody has ever suggested it.
You´ve mixed the EU up with some freelancing organization in Paris, composed by a number of has-been-politicians (many from Eastern Europe which may explain the really curious idea).
And no, Swedish snuff was never under any threat – the EU was banning adding the taste of strawberry, apple and  what have you to the tobacco so as not to lure children to pick up a bad habit.

The vacuum cleaner will live on but from now on, producers must make sure they are less noisy. And cinnamon rolls are threatened by a Danish ban – not an EU one – and only if they carry too much of the substance coumarin that can be found in the cheaper kind of cinnamon that may be poisonous for little children.

So what, everybody´s had a moment of fun and EU bureaucrats are surely paid enough to put up with a bit of ridicule now and then?

Here´s when it gets serious: People end up believing that the EU is a really mad organization, capable of coming up with absolutely anything.
So when the Swedish government announced this week, that Sweden needs to restrict the citizens´ 200 year old right of transparency into public affairs, the government only had to blame the EU to shut any potential opposition up.

Now, the EU has not, in any shape or form, gone against the Swedish constitutional right of transparency or demanded any changes to it. 18 years of EU membership has proven that open access in Sweden does not constitute a problem for negotiations in the European Union.
Not once has it become an issue.
(Why? Because, as anyone who has ever been in Brussels can tell you, the EU already leaks like a sift, nothing a bit of Swedish openness could add to that.)

So why does the Swedish government need to change the law?
Well, the governmental proposal does state that the new secrecy will apply to all cooperation that Sweden may enter into within the EU or with another foreign power.

Courtesy of Mr Edward Snowden, we are all now aware that Sweden is one of the countries that have been especially generous in handing over secrets to the USA and the NSA.
(The government never bothered to inform us Swedes about that.)

So the secrecy is already working out fine?
Not really, it freaked the Americans out when a group of Swedish journalists managed to get their hands on most of the information on CIA secret rendition flights. It would seem that Swedish civil servants used their constitutional right to speak to journalists.

Can´t have that happening again.
And it won´t have to, because since of this week, any new cowboy action of the same kind would be covered under the new secrecy laws.

Introducing these curfews went swimmingly, met hardly any opposition at all since the Swedish government cleverly blamed it all on the EU and we all know what the EU is like.
Right?

 

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