Archive for the ‘EU’ category

Brexit – Popularism At Its Best

February 2, 2020

With the singing of Auld Lang Syne, the European Parliament bid farewell to the United Kingdom.  Following a UK 2016 referendum, Britain has labored long and hard to strike a deal.  This task was made more difficult with the extremely sensitive nature of the North Ireland/Irish Republic border.  Through the three plus years of negotiations, Brexit hardliners have continued to promise “fields of honey” once the yoke of the EU was removed.  “Britain will be sovereign again”.

Now, the British ship is sailing, and predictions will become reality.  Will the future UK be as promised?

Since the 2016 referendum, the British people’s bottom line opinion have wavered as new information predicted unexpected difficulties.  In December of 2019, however, a national election swept the Conservative Party into full majority and cemented Prime Minister Boris Johnson control over Parliament.  Brexit was approved.

Brexit may proved to be a mistake but at least Brexit must be seen as the will of the British people.

Historians will have a complex task assessing whether Brexit was good for the UK.  Should UK citizen’s moods sour on Brexit, historians will have to contend with so many “I told you Brexit wouldn’t work”.  

There is almost no chance that the British economy will suddenly look like “silicon valley” or manufacturing will suddenly return to the glory of pre-world war II.  Banking and Finance may find their future less clear if movement to the EU is limited.  Paris or Frankfurt could look more attractive than a London focused on pound sterling.

England’s 56 million citizens seems tiny compared to the EU’s 500 million.  The end to the “free movement of labor” will not change the demographics of the UK and any EU tourist will still know when they are in Germany or in France.  But the UK will be sovereign.  Hmmm.

Brexit was the result of a populist notion.  Whatever was wrong or less than expected in the UK resulted not from UK government, but instead from “evil” bureaucrats in Belgium.  The underlying tragedy is that there are always an abundance of politicians who are only too ready to manipulate and exploit voters using “populist” ideas and slogans.  Unfortunately, Brexit will be seen for some time as the poster child for popularism.  

There is frequently confusion in separating “democratic rule” from “popularism”.  And to be sure, both can at times be different faces of the same concept.  Brexit, however, lacked any discussion of fact and policy, most likely because fact and policy are often not “popular”. 

Rebuilding Europe following WWII has provided 75 years of relative peace and prosperity.  England finds itself at a different fork in the road now with hard choices facing economic growth.   These choices may not be “popular” or obvious. 

Where is Winston Churchill when we need him? Why instead are there only Donald Trump impersonators?

The Land Of The FOE

August 4, 2018

This past two weeks I have been traveling in France, Germany, and Italy.  Time passes quickly, they say, and unbelievably, it has been almost 15 years since I last lived in Europe and 3 years since I last visited.  Oh, how life there has changed and so much remains still remains the same.

The French are still the “french” as are the Germans and the Italians, still “germans” and “italians”.  That is in important rationale why one visits.  Life and living is uniquely different compared to New Jersey, Alabama, or California.  

Parian life is drifting far more “english” friendly than in the past.  For better or worse, english words have crept into the French language and can be seen ever where.   For the region Cologne to Kobelnz to Frankfurt, German is the language of choice but again, if the situation involves tourism, the German speaking attendant quickly switches to flawless English.  And Italy is special.  The Italian way of citing rules but ignoring them confirms quickly that one is visiting a uniques place.  

In all three countries there is no hint of want.  Security forces, local police and special military border protection details, dot the background, there but discreetly remain on the side lines. 

Most restaurants feature traditional cuisines, but there are no so many others (Balkan, Mexican, Vietnamese, Chinese, plus American fast food specialties) make for much wider variety.  One selects these alternatives at the peril of missing out on traditionally wonderful French, German and Italian dishes.

But life is about choices.  During the summer months, especially, many thousand of American tourists flood Europe in search of that magical vacation – mixing culture, history, and cuisine.  Football (soccer in American English) jersey with the various stars names on the back are everywhere.  Public transportation (trains, subways, buses, and cabs) make getting around possible since streets are so narrow and crowds are so large.  Visiting Europe is a treat.

President Trump has referred to Europe as a foe in the sense of an unfriendly trading partner.  The President’s “America First” policy seems out of touch if one measures the size of the tourist crowds in Europe and recognizes that America travelers do not see Europe as a foe.  In fact, American tourists find European countries are much more tourist friendly than ever.  But maybe the President knows something the average person does not.

Seventy years ago and and twenty-five before that, found these European countries engaged in a blood bath.  Killing each other and destroying the heritage that lay in the way, that was the message of that day.  Many reasons contributed to the World Wars I and II, but loss of economic  opportunity was a key driver.  And now President Trump proposes steps which will reset the world clock of pre-World War I.  What did the Wharton School teach Donald Trump anyway?

A black-white, transactional thinker, of course, is obtuse to the complexities which allow countries who wish to remain more homogeneous than the US to remain peaceful and on good behavior.  An opportunist, who wishes to fool unsuspecting followers, can paint European relations in thin layers and omit the rich fabric which exists.  Europe is no different than Delaware, Florida, or Oregon, the President falsely claims  Hmmm.

The ironic aspect about the trading partner, the European Union, is that reciprocal trade is an accepted economic principle for both the US and Europe.  What keeps free trade from occurring is also the same… political considerations.  Just as President Trump is pandering to Steel and coal interests, European leaders have political interests (normally meaning jobs) in each country to consider.   Only through negotiations which appear fair to each country can an agreement be reached that has a chance of working.  

But President Trump must know that.  He has claimed to be a genius.


Brexit, Shmexit, Who Cares?

June 27, 2016

The British vote to withdraw from the European Union came as a shock to many. How could something so sensible (large common market, larger than the US) appear to so many Brits as a curse to be ended. To be sure the EU brought some unpleasant aspect to Britain but the benefits to a country, now a shadow of what it once was, would seem easy for politicians to communicate. Hmmm.

The EU can motor on as if nothing has happened while the unintended consequences descend upon Britain… that is unless other member States loose control to nationalistic elements. It is not a wild and crazy idea that the EU could unravel and return the continent to a group of competing States prone to local skirmishes. One would hope not but 500 years of history do not lie.

Briton’s unwise decision can be traced not to immigrants or Brussel’s eager legislators, but to the mainstream British politicians who have chosen short term expedient solutions to systemic national problems like the loss of mining or manufacturing jobs.  Where has been honest assessments and workable plans to over come?  Instead Britons politicians have tried to distract voters with hollow promises, past soccer victories, and glorification of the King and Queen.

Globalization, like in America, has made so many manufacturing jobs redundant. Any attempt to repatriate these jobs, as opposed to replacing them with higher skill or technology based ones, must fail because of simple economics.

Soon the Brexit supporters will learn the hard way that immigrants were not the problem as well as globalization cannot be turned on or off.

The big question is whether US mainstream politicians can learn this lesson or whether they too will fall victim to convincing voters to vote a certain way, like to Make America Great Again, only to find they have selected an even poorer alternative?

The Greek Tragedy, Version 2.1?

January 26, 2015

Over the weekend Greek voters elected the “radical leftist” party, Syriza, to try and lead Greece out of the austerity induced deep economic rut Greece has been stuck in. Alexis Tsipras, Syriza’s leader began immediately to form a government by agreeing to form a coalition with Anel, a populous right wing party. Hmmm.

Greece has been laboring under austerity economic measures which it was forced to accept as conditions for the EU to bail out. With 25% unemployment, austerity coupled with vanishing hope that the economy would suddenly get better, Greek voters decided they had waited long enough. It was time for a new approach.

The options open to Syriza are not many. Tsipras campaigned on the promise to “renegotiate” the terms of the EU bailout. Without more government spending on jobs, there is little hope on seeing the unemployment figure drop. And without the ability to borrow more or pay out less in repayments there is no money for Greece to spend.

The EU might now be more sympathetic to less austerity since it finds EU’s own economy stagnating and has found it necessary to pursue quantitative easing via new ECB policies. But these are the Greeks Germany is reminding the EU.

Greece got into this hole by years of wholesale tax dogging and wasteful government spending. These foolish policies seemed necessary at the time to placate the Greek society (we won’t complain about taxes if the government does not prosecute when we don’t pay them). Wasteful government spending was spread around (somewhat like the US defense budget) so why would anyone complain?

Pundits have predicted that Greece will exit the “Euro” and begin printing their own currency again. Simply printing money, however, will do nothing to solve Greece’s underlying economic realities long term. While there may be a return to the “drachma”, there must be increased tax revenue and wiser government expenditures.

EU officials will be viewing this abrupt change in Greece with a wider lenses. Spain also sports high unemployment and is bound to similar austerity EU conditions. And Italy can’t be far behind. Allowing Greece to withdraw from the Euro, without serious negotiations, would only encourage other countries to follow.

This new left-right government should offer a novel way to reform the underlying Greek tendencies to wait until tomorrow. We shall see.