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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

Protectionism vs. globalization, round 65

Recap of yesterday’s May Day protests:

Spain saw more than 80 protests, most of which were motivated by the country’s ridiculous unemployment figures. InGermanymore than 400,000 unionists went on the streets showing their discontent with the government’s austerity measures. Obviously, there were demonstrations in Greece and France as well, but since that’s pretty much the norm now, it doesn’t seem worth mentioning. read article

In the US, most expected Occupy protests were peaceful, except for an “anarchist faction.” (Also, great picture, Reuters…)

A very fitting comment from an FT reporter on the interweb:

A thought: shouldn’t the “austerity vs growth” debate in Europe have been settled before austerity was hardwired into EU law?

In the NetherlandsGeert Wilders, leader of the far-right freedom party, has announced that his campaign for the general elections in September will advocate a Dutch exit from the EU. In an interview with new broadcaster NOS, he said

“We can be a member of the European Economic Area just as Norwayor of the European Free Trade Association, as Switzerland.”

This is really upsetting for a whole truckload of reasons. First and foremost, the only thing that keeps Europe from [continuously] falling into pieces is the interconnectedness of its countries. Arguably, a contract that forces nations into a union is worth more than alliances of independent parties. What is more, it’s like we’ve left the peak of globalization and the appreciation thereof far behind us and all that’s left is Occupy, a broken EU and protectionist policies.

On Project Syndicate, former LSE director Howard Davies, argues why protectionism is bad.

Tonight will see the last stand [off] between Nicolas Sarkozy and Francois Hollande. The 2.5hr debate, which I expect to be filled with contradictions and anti-European statements and which the French expect to be watched by 20 million people.

Otherwise, Germany has added a bureaucratic layer for oil companies by forcing operators Germany’s 14,700 gas stations to register their purchases and prices to harmonize [consumer] prices across the country. Needless to say, the industry is little amused. Also, now that it’s May, it’s time to have a look at how the world was doing in April. The answer is pretty consistently ‘shit’… read article

So long.

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The cure against a German Europe: inefficiency

Just a general question to start the week off… What kind of world do we live in, when Kim Kardashian is attending the White House Correspondence Dinner? Excuse me?! What?!? read article

In Spain, which is also double-dipping, Mariano Rajoy is holding onto every last straw to avoid a EU-led bailout program and calling for “structural reforms”. What a good plan, after all S&P downgraded more or less every Spanish bank, including Santander, this morning. Of course, it his mortgages that cause the headache and so the structural reform of the moment is the creation of a ‘bad bank’-asset dump. Rajoy, however, refuses to call the program a ‘bad bank’, because Spanish banks may only participate in the scheme if they have “sufficient loan provisions” in place. Reminds me of this whole “you need to have done internships to get an internship” kind of thing… Conclusion on Spanish scheme: it’s an inefficient bad bank. Well done. Being against the German domination in Brussels is one thing, but this is taking it too far. read article

Nicolas Sarkozy took his new found belief in protectionism a step further last night, saying

I don’t want France to dilute itself into globalization […] Europe has let the idea of the Nation weaken too much.”

I was sure we wouldn’t need to have this discussion anymore after all the bailing out and holding hands. But let’s not forget that he’s a short man about to lose the only thing that makes him seem taller. read article

Meanwhile, Romania is waiting to see a new cabinet shaping up in this coming week. The country’s government collapsed on Friday as the result of a confidence vote and caused the IMF to rethink its €5bn aid packageread article

A nice read for all those Londoners who are not really from here, i.e. most of us: Adrian Gill on the city, “the most successful mongrel casserole anywhere”… read article

Putting the fun back into recession, here’s an interactive map of Europe. view graphic

So long.

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Stimuli and mercantilism. That’s Europe for you.

There won’t be a news brief tomorrow, 13 March 2012.

After the Greek bond swap went through with less than 90% participation of private investors; those who didn’t want to play ball were forced into it by use of collective action clauses (CACs). In return, $3.2bn worth of credit default swaps were activated. Here is how that works.

So Greece avoided involuntary default and the evil investors got a taste of their own medicine (…), but as Felix Salmon wrote on Thursday,

This is important to remember: just because bondholders are taking a haircut, doesn’t mean this isn’t a bailout.

The EIB (European Investment Bank) is looking to give Greece another €1bn stimulus; the country is also entitled to another €20bn of structural funds from the EU, to be used for regional development until 2013read article and on to other matters, such as Spain, Portugal and Italy…

Meanwhile, Evangelos Venizelos, the current Greek minister of finance, who has the charisma of a potato, confirmed that he will run for the office of prime minister in the April elections for the socialist party PASOK. His main competitor, conservative Antonis Samaras, is currently ahead in the polls.

On another note, does anybody else think £1 is a lot of money for a cucumber from Tesco? What is the world coming to…!

Nicolas Sarkozy gave his re-election campaign a touch of old-school mercantilism over the weekend. He called for more trade barriers to boost domestic production and build France up again from the inside out. Arguably. Oh yeah, and he also wants to halve immigration influx. According to Reuters, Sarkozy has the worst popularity rating of all French presidents everread article

And finally, don’t hate the banker for his bonus, he’s just a herd animal (credit to Andrew Oswald of the University of Warwick). read article

So long.

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