The Eurozone Crisis Thread

I agree w/that Jim. Also not sure how easy it would be to put in place alternative plans he talks about as a bargaining tool.

I think the fear vs. anger stuff was on point.

Looks like the Eurosceptic Law & Justice party will have won a majority in the Polish elections. There's speculation that the calls for hardline conservative members of other parties to join them is with a view to forming a super-majority large enough to change the constitution.

We could finally see Jesus being made king in perpetuity.

http://www.theguardian.com/world/2015/nov/10/portuguese-mps-force-minority-government-to-quit-over-austerity

Anti-austerity coalition set to take power in Portugal after all.

Alternative for Germany (AfD) party co-leader Joerg Meuthen was reported on Sunday as saying that Germany would be able to share a common currency with the Netherlands, Austria, Finland or Baltic states because "they have similar cultures of stability like ours. But the French have a different one, not to mention the Italians, Spaniards, Portuguese and Greeks. They don't want austerity at all."

http://en.rfi.fr/europe/20160424-german-populist-afd-suggests-france-be-excluded-euro

The Austrian presidential election result has apparently been annulled, giving the far-right another shot at it.

It's important to note that the Austrian Supreme Court specifically stated that NO evidence of fraud was found, but the Interior Ministry did sloppy work in counting about 70K votes (in an election where about 30K separated the contestants). A shittily written BBC blurb on the decision has been picked up by far right English-speaking schmucks, cleverly getting the concept "election was fraudulent" to be part of the story.

ORF seems to be calling the Austrian election for Van Der Bellen.

^ 53.6% vs 46.6%. I'm suprised actually.

*46.4

Campagne manager from Hofer already congratulated VdB. The votes by post will be counted tomorrow but those are supposed to only increase the lead.

Thought about posting this on the French Election thread, as a comment on the debate on austerity, but it probably fits a lot better here: http://www.npr.org/sections/parallels/2017/04/26/524681297/portugal-basks-in-post-bailout-economic-revival

Some thoughts:

1) It is not strictly speaking a coalition, but a socialist (centre-left) government which has an agreement with the communists and the Bloco de Esquerda (more modern leftists alienated by the communist's loyalty to the Soviet Union) for them not to sabotage most votes. This was imo a bad move by the left because it reinforces the "leftist parties don't actually WANT to govern" stereotype. But it's still the most leftist government Portugal's had since the 70's, and its success is a good thing.

2) That being said, the two sectors mentioned - tourism and startups - are telling. Tourism is what you do when there's nothing left - everyone's going into AirB&B, hostels, etc. because they can't get a job anywhere else. The boom is much to do with how cheap things are (I myself was flabbergasted when, after a few years in the UK, I came back and ordered a large glass of white wine that turned out to be less than two euros), and in Lisbon and Porto specifically, it's having all the usual consequences of gentrification - traditional places closing down in favour of faux-authentic gastropubs, the elderly being priced out of areas to make room for hotels, etc. Except this gentrification doesn't even result in anyone coming to live.

As for startups, I run the risk of becoming an anti-Silicon Valley cliché talking here, but: I have a lot of friends involved in the sector. Things operate largely on the basis of unpaid internships, with lots of talk about exposure, experience and pulling oneself up by one's bootstraps. The big names in the area are almost to a man buffoons whose only real talent lies in self-promotion. More than anything else, it's a way of exploiting people's guilt over not finding work; you don't get paid, but you can say you work somewhere, and you can tell yourself you'll get paid soon.

3) Anecdotally: it's true that, out of the mass exodus towards London that I was a part of, almost no one is planning to stay in London - but no one's planning to return to Portugal, either.

4) Had a chat with a friend last time I passed by Porto a couple of weeks ago: he leans conservative, though no fanatic, so take that bias into account, but: he's been working as a copywriter for some time now, and last year he had to complain because he only got half of his salary; they're still owing him for paid vacation days. According to him, it's a whole ecosphere: the clients neglect to pay the companies, the companies neglect to pay the workers, everyone continues as if this was normal. It could easily lead to another collapse.

Otm as far as i could observe from a week in Lisbon last year.

Ireland also is in a strange post-bailout recovery, characterised by a desperate govt chasing of pre-crash property prices in Dublin (no new units being built, existing stocks seemingly being hoovered up by REIT or other financial instruments in an increasingly bizarrely-pressured rental market), the start of what is likely to be a bumpy industrial relations episode with public transport strikes and wide pay and pension reformation, and all the while the only jobs as such are fronting non existent tax bases, doing the accounts for the European behemoths, managing the code changes done in China or India in order to claim R&D breaks here, and in coffee shops.

Outside of Dublin seems nice if you don't mind eating from hedges.

Tourism is what you do when there's nothing left

Realistically, Portugal has no possibility of having a resource-extraction economy, it has limited agricultural potential and its high-value products (wine, olive oil) compete in already saturated markets, it can't compete with other tax havens that have far smaller populations and even fewer resources. And so on. iow, the avenues it can go down toward greater prosperity are quite limited.

Tourism at least has the advantage of being a product you can sell over and over again without depleting it and if you develop an international reputation as a desirable destination based on something other than cheap package holidays for people who only care about sun and cheap booze, then even when you are no longer so destitute that you must sell yourself cheap you can continue to attract tourist money. It works for France.

Start-ups are also pretty damn smart under the circumstances. At first, all you need to do is offer tax advantages to foreign companies looking for low-cost attractive places to perch. To move to a more robust domestically-based industry, you need a pool of smart young people, well-educated in STEM, which can't appear overnight, but with the right sort of encouragement can be produced within a decade. Israel has made hay with that strategy.

I'm not sure in what other directions Portugal could realistically go, but I'm sure they'd love to hear about good new ideas from any quarter.

sad lols at the idea that we need "a pool of smart young people, well-educated in STEM" when one of our main structural problems is we have an entire generation with university degrees and nowhere near the job market to absorb them. The investment in startups has very little to do with attracting foreign investment, it's mostly Portuguese business graduates/assorted creatives hoping they'll strike gold with some app or other.

I certainly agree our traditional industries can't guarantee any kind of stability in the future - things have always been precarious, this is part of why EU membership is so important to Portugal that, even at the height of austerity, it never turned euroskeptic in a significant way. But I'm not too confident that this boom in tourism (which again, is absolutley a direct consequence of the financial crisis) will provide that, and am very worried about what its oversaturation is going to do to culture (and the environment, but to be fair that's been going on for ages).

If you're already flooded with talented, educated young people, but have no jobs for them in the current economy, then their attempting to create high value jobs for themselves is x100 better than their all sitting around in cafes waiting for jobs to appear. Better than their all emigrating, too, since all that child-rearing & education is a sunk cost for the nation.

What you're saying is almost identical to the rhetoric employed by the recently ousted right-wing government (well, except they approved of emigration, as well - believing people would make their fortune elsewhere and then return. Fat chance, despite what that NPR article suggests.); Passos Coelho was all about pulling yourself up by your bootstraps, seeing a time of crisis as a time of opportunity, going out there and creating jobs, etc. Entrepeneurship was valued, almost worshipped.

Thing is, it was a terrible strategy. The nature of start-ups is that only very few succeed - it's a game for people with reasonably secure social safety nets. Meanwhile, though, the job market picked up all sorts of bad habits - the aforementioned unpaid internships became omnipresent, "it'll help for your CV/exposure" a common refrain, the mentality became prevalent that it was 100% ok for employees to work crazy hours for nothing because "we're all in this together" and hey, there's always the hope that if the company starts doing better they'll start being able to pay.

It's funny that you mention sitting around cafes because, honestly, looking at where a lot of my friends worked, I can sincerely say that they didn't gain anything more in terms of career and remuneration than they would have if they had stayed in the cafes - but you can read in cafes, and the conversation's better.

I think Portugal should really double down on film production. Always great Portuguese films at every festival.

Yeah, that's been a really good development! The tradition is somewhat weak (we never developed a strong popular cinema, scattered auteurs operated in a kind of vacuum), but things have really picked up over the last decade or so (mainstream cinema still terrible and not in a way that's easily exportable though).

letting greece (the country that named europe) languish was not a good sign for the viability of the EU

almost identical to the rhetoric employed by the recently ousted right-wing government

except I'd be in favor of giving everyone a universal basic income, so that failing in one's startup doesn't result in falling into penury. everyone needs to eat, have a safe place to sleep, and get basic health care. guaranteed.

btw, the original idea behind the phrase "pulling oneself up by the bootstraps" was that it was describing a ridiculous impossibility, not a recommended strategy for success.

oh, and unpaid internships are bullshit and always have been.

european civilization has been in stasis since socrates had to defend his life in front of the athenian 'parliament'. meanwhile, donald trump golfs every weekend

That is simply unbeatable ball in the street, hats off

let us all genuflect before the le pens / trumps / putins. the blues is number one. the blues is number one!

It looks more likely than ever that Poland is going to get hit for an Article 7 breach.

http://www.dw.com/en/eu-threatens-to-trigger-article-7-for-poland/a-41869331

idk how many of the V4 are going to line up with them - Hungary for sure but Czechia seems likely too. I think that would rule out the suspension of voting rights but Poland might find its economic support from Germany and France limited.

https://www.theguardian.com/world/2017/dec/20/eu-process-poland-voting-rights

It’s on.

The last stories of the Slovak journalist Jan Kuciak, who was assassinated alongside his girlfriend last week:

https://www.occrp.org/en/amurderedjournalistslastinvestigation/

He had been researching EU farming subsidies getting siphoned off by the'Ndrangheta in deals that had links to some of Slovakia's ruling party.

do journalists get murdered with any regularity in Italy in connection with mob investigations? seems no, & that journalist murders like this are very uncommon in the EU

In Italy - not for years as far as i know.

The other high-profile EU one recently was Daphne Caruana Galizia.

ah right, of course.

I was thinking of organized crime related murders of journalists like you get in Mexico, and thinking that that's not really a European phenomenon at this point.

From what I can see this has never happened in Slovakia before, for one thing.

Twenty years since it happened here and that one was unparalleled iirc

Was gonna say hasn't it happened in Ireland then realised it was that long ago - I did an exchange term at Trinity College, Dublin just after that happened so the aftermath was in the papers when I was there.

Huge repercussions- establishment of the CAB and I think a special non-jury court for gang related offences

Recent pieces on past and future Euro upheavals to come.

Here is a piece by Thomas Jones on the aftermath of the Italian elections: https://www.lrb.co.uk/v40/n11/thomas-jones/short-cuts

As populists are reduced to making noises all that is left is to punish migrants - something the EU and many of its citizens don't have a problem with.

And this .ppt by Adam Tooze is very good on Italy:

https://adamtooze.com/2018/05/25/europes-political-economy-a-gamble-gone-wrong-notes-on-the-backdrop-to-the-italian-crisis/

the state of Japan on that debt/GDP chart!

Yes, but Japan can introduce fiscal policies that Italy (due to being a memeber of the single currency) cannot.

Its a point Larry Elliott made recently: https://www.theguardian.com/business/2018/may/20/italys-policies-make-sense-its-eurozone-rules-that-are-absurd

But hasn't Japan famously been unable to handle their crisis for, like, thirty years at this point? I'm not sure they're a good counterexample. Or have they gotten better?

No matter what, though, thanks for the links!

Wow, Conte gives up! President Mattarella won't accept a euro-skeptic finance minister. This won't end well...

Italy is not struggling because of the euro, but because of lack of structural reforms. Italy should do what France has started to do. Reforms, reforms, reforms, and Italy will be saved! #EPlenary 🇮🇹🇪🇺

— Guy Verhofstadt (@guyverhofstadt) May 30, 2018

I'm sure once Berlusconi is back in power everything will work itself out.

This fucking Verhofstadt guy.

I'm sure austerity will work out well in Italy rn

The reason is simple: the decline in EU support across Europe was primarily related to the so-called “refugee crisis”. Once this was “solved” by the EU-Turkey deal, support rebounded and support for rightwing populist parties started to decline again (while remaining higher than before). Italy bucked this European trend, because immigration remained a major problem in the country.

A year ago, at a workshop in Berlin, an MP for Italy’s then ruling centre-left Democratic party pleaded her social democratic colleagues to help with the country’s ongoing influx of asylum seekers. But, just like the pleas of her colleagues, they were ignored in Brussels. Scared that an acknowledgement of a “crisis” in Italy would bring the refugee issue back on the agenda in their own countries, and show that the “problem” had not been solved at all, Italy was sacrificed for the alleged good of the union.

https://www.theguardian.com/commentisfree/2018/may/30/eu-italy-crisis-refugees-populism?CMP=Share_iOSApp_Other

The reason is simple: the decline in EU support across Europe was primarily related to the so-called “refugee crisis”. Once this was “solved” by the EU-Turkey deal, support rebounded and support for rightwing populist parties started to decline again (while remaining higher than before).

Some victory.

This is a pretty good piece in describing the awfulness rn (the mention of Musil totally lands):

https://www.theguardian.com/commentisfree/2018/may/30/italy-regime-change-future-repressive-alliance-five-star-league

And the EU are doing zilch to alleviate the pain (EU grants that are squandered):

https://www.theguardian.com/commentisfree/2018/may/30/romanians-uk-tragedy-homeland-corruption-poverty

Hard to know what its good for. Open borders work only for so long if you are met with hate in the country you land in.