[Discussion] European Political Landscape

There are three elections occurring over the coming year that are of huge importance. They are:

Italian Constitutional Referendum - 04/12/16
French Presidential Election - 1st Round 23/04/17, 2nd Round 07/05/17
German Federal Election - 22/10/17

This thread is to discuss the political realities, results and fallout around these elections. The scope is broad but try to keep the post relevant to the elections referenced above.

Edit - Updated thread title

bnpederson wrote:
Prederick wrote:
Prederick wrote:
Axon wrote:

They did, Pred. Just for clarity, that was 1000 people. RTE’s was 3000. It’s calling it 69.4% to 30.8% in favour of Yes. Shocked indeed.

Good lord. I thought it'd be 55-45, at best, and that it'd be close no matter what. This is an absolute whipping.

I should say here, as Nate Silver reminded us, these are exit polls, and if 2016 should have taught us anything, it's DON'T PUT 100% FAITH IN POLLS.

So let's see what the actual final tally says.

The biggest problem with 538 and polls of the US election is how local polls are a sh*t-show and local voting makes a HUGE difference in regards to the US elections. We don't really have an equivalent to this, no truly democratic national vote.

cheeze_pavilion wrote:

Remember that it wasn't the polls in 2016 U.S. Presidental election that were the problem, it was the humans interpreting them. The humans ignored the large number of undecideds the polls had revealed. These polls sound more like the ones in the 2012 U.S. Presidental election. Or 2008 given the blowout that would be welcome.

On top of that the final aggregate was pretty much spot on when it came to the popular vote.

Axon wrote:
bnpederson wrote:

Are the UK exit polls relevant for an Irish vote?

In what way, bnpederson? I think the discussion is more about the efficacy of opinion and exit polling.

I was under the impression we were talking about this specific exit poll, which I don't think is done by the same people who did the UK exit polling.

bnpederson wrote:
Axon wrote:
bnpederson wrote:

Are the UK exit polls relevant for an Irish vote?

In what way, bnpederson? I think the discussion is more about the efficacy of opinion and exit polling.

I was under the impression we were talking about this specific exit poll, which I don't think is done by the same people who did the UK exit polling.

No they weren't, that is correct. I think the conversation was more around the methodologies of exit polls and their efficacy.

What's interesting is the RTE exit poll with the larger sample size was just about within the margin of error. So they might not be quite as useful as we thought.

Delighted to see Sweden pass its long-discussed consent law.

http://www.bbc.com/news/world-europe...

Axon wrote:

While it is indeed true that the accepted political wisdom leads us to believe that an ailing economy leads people to vote for the far-right, I'm not sure why it's supposed to be unique to the Eurozone. The US and the UK certainly are excellent examples of that.

However, what's odd here is Lega Nord's popularity fell to around 4% in 2013 during the worst of the economic crisis and Italy has actually been going through a small boom that they call the Revival or La Ripresa since 2014. It was in this context saw the greatest increase of the far-right's popularity which began in 2014 as well. What also happened that year was the mass immigration from North Africa which accelerated by the civil war in Lybia that same year.

I know you don't want to discuss the euro, as you've made plainly clear, but Lega Nord's popularity have nothing to do with economic mismanagement and everything to do with Africans trying to cross the Mediterranean. Lets not dress up their motives as if they are based on some kind of higher ideal.

Presumably, the post-2014 popularity of right-wingers is largely due to Russian information operations. No reason they would leave Italy out of their plans.

Mixolyde wrote:

Presumably, the post-2014 popularity of right-wingers is largely due to Russian information operations. No reason they would leave Italy out of their plans.

You bet you're bottom dollar they're involved. Both Liga Nord and M5S are Putin sympathisers. Which, I suspect has led to the President refusing to accept the proposed cabinet.

But the point about Russia is interesting, the dogs on the street suspect that the 2013 Cypriot Bail-In is probably ground zero for Trump, Brexit and a myriad of other attacks on the West. Long story short, a lot of Russian billionaires lost a lot of money over the bail in in Cyprus and while the tactic of bailouts at the time were being switched to bail-ins very few in the Eurozone made any secret about their glee of taking a chuck out of those oligarchs.

Of course this is all incredibly hard to prove conclusively but you can draw lines directly back to the Russian government at times in time flux in Europe after March 2013. Ukraine, Syriza, Le Pen, Brexit, to name just a few but a pattern is there with Ukraine being the starting point.

To put in in further context, prior to that the EU and Russia signed a strategic partnership in 2011 and talks were at an advanced stage for visa free travel between both. It had already signed up to the Partnership and Cooperation Agreement with defined road maps for four Common Spaces that both the EU and Russia would cooperate on. All of this is frozen due to the Ukraine crisis where Yanukovych suddenly found an agreement that was awfully similar to the one Russia signed in 2011 beyond the pale.

Who knows why. Spite, revenge, greed. Take your pick but it's fairly clear what they are doing.

The sad thing is it is fairly clear, and it is working...

Axon wrote:

Stuff

I remain convinced that the two most important events post-9/11 are the financial crash/recession in '08, and the Syrian Civil War. I don't think any other events so perfectly explain the world we're living in right now.

Russian journalist shot and killed in Ukrainian capital

MOSCOW (AP) — Police in the capital of Ukraine say a Russian journalist has been shot and killed at his Kiev apartment.

Ukrainian police said Arkady Babchenko’s wife found him bleeding at the apartment on Tuesday and called an ambulance, but Babchenko died on the way to a hospital.

The 41-year-old Babchenko served in the Russian army during the first separatist war in Chechnya during the 1990s and later became a journalist. He worked as a military correspondent for several Russian media outlets.

Babchenko had been scathingly critical of the Kremlin in recent years. He left Russia in February 2017, saying he was receiving threats and concerned he might be jailed.

In the fall, Babchenko moved to Kiev, where he worked as a host for the Crimean Tatar TV station, ATR.

With his choice of prime minister, Italy’s president has gifted the far right

In 2015 the Greek people elected a progressive, Europeanist government with a mandate to demand a new deal within the eurozone. In the space of six months, under the guidance of the German government, the European Union and its central bank crushed us. A few months later, I was asked by the Italian daily newspaper Corriere della Sera if I thought European democracy was at risk. I answered: “Greece surrendered but it was Europe’s democracy that was mortally wounded. Unless Europeans realise that their economy is run by unelected and unaccountable pseudo-technocrats, committing one gross error after another, our democracy will remain a figment of our collective imagination.”

Since then, the pro-establishment government of Italy’s Democratic party implemented, one after the other, the policies that the unelected bureaucrats of the EU demanded. The result was more stagnation. And so, in March, a national election delivered an absolute parliamentary majority to two anti-establishment parties which, despite their differences, shared doubts about Italy’s eurozone membership and a hostility to migrants. It was the bitter harvest of absent prospects and withering hope.

After a few weeks of the kind of post-election horse-trading common in countries like Italy and Germany, the Five Star Movement and League leaders Luigi Di Maio and Matteo Salvini struck a deal to form a government. Alas, President Sergio Mattarella used the powers bestowed upon him by the Italian constitution to prevent the formation of that government and, instead, handed the mandate to a technocrat, a former IMF employee who stands no chance of a vote of confidence in parliament.

Had Mattarella refused Salvini the post of interior minister, outraged by his promise to expel 500,000 migrants from Italy, I would be compelled to support him. But, no, the president had no such qualms. Not even for a moment did he consider vetoing the idea of a European country deploying its security forces to round up hundreds of thousands of people, cage them, and force them into trains, buses and ferries before sending them goodness knows where.

No, Mattarella chose to clash with an absolute majority of lawmakers for another reason: his disapproval of the finance minister designate. Why? Because the said gentleman, while fully qualified for the job, and despite his declaration that he would abide by the EU’s rules, had in the past expressed doubts about the eurozone’s architecture and has favoured a plan of EU exit just in case it was needed. It was as if Mattarella declared that reasonableness from a prospective finance minister constitutes grounds for his or her exclusion from the post.

What is so striking is that there is no thinking economist anywhere in the world who does not share concern about the eurozone’s faulty architecture. No prudent finance minister would neglect to develop a plan for euro exit. Indeed, I have it on good authority that the German finance ministry, the European Central Bank and every major bank and corporation have plans in place for the possible exit from the eurozone of Italy, even of Germany. Is Mattarella telling us that the Italian finance minister is banned from thinking of such a plan?

Beyond his moral failure to oppose the League’s industrial-scale misanthropy, the president has made a major tactical blunder: he fell right into Salvini’s trap. The formation of another “technical” government, under a former IMF apparatchik, is a fantastic gift to Salvini’s party.

Salvini is secretly salivating at the thought of another election – one that he will fight not as the misanthropic, divisive populist that he is, but as the defender of democracy against the Deep Establishment. He has already scaled the moral high ground with the stirring words: “Italy is not a colony, we are not slaves of the Germans, the French, the spread or finance.”

Prederick wrote:

Russian journalist shot and killed in Ukrainian capital

MOSCOW (AP) — Police in the capital of Ukraine say a Russian journalist has been shot and killed at his Kiev apartment.

Ukrainian police said Arkady Babchenko’s wife found him bleeding at the apartment on Tuesday and called an ambulance, but Babchenko died on the way to a hospital.

The 41-year-old Babchenko served in the Russian army during the first separatist war in Chechnya during the 1990s and later became a journalist. He worked as a military correspondent for several Russian media outlets.

Babchenko had been scathingly critical of the Kremlin in recent years. He left Russia in February 2017, saying he was receiving threats and concerned he might be jailed.

In the fall, Babchenko moved to Kiev, where he worked as a host for the Crimean Tatar TV station, ATR.

'Murdered' Russian journalist Arkady Babchenko appears on Ukrainian TV

CNN wrote:

A Russian journalist and Kremlin critic, reported to have been shot dead in Ukraine, has appeared alive at a news conference.

Arkady Babchenko was earlier reported to have been killed in his apartment building in the Ukrainian capital Kiev.

But in a stunning development, he appeared alongside Ukrainian security officials in a news conference broadcast live on Ukrainian television.

Ukraine's Security Service suggested it had staged the murder.

Writing on Twitter, the security service said it had received prior warning about the attempted murder of

Babchenko and decided to conduct an operation to collect evidence of terrorist activity by the Russian special services on Ukrainian territory.

Earlier, Ukrainian state news agency Ukrinform had said that Babchenko, 41, was shot in the back and died in an ambulance, citing his friend and supervisor, Ayder Muzhdabaev, deputy general manager of Ukrainian TV channel ATR.

Police in Kiev said Babchenko's wife found him outside their apartment.

It not immediately clear whether Babchenko's wife and friend were aware of the security operation.

One Soldier's War by Mr Babchenko is p good btw.

Almost every point raised by Yanis Varoufakis is wrong. The problem with people like these is that they spout so many that it's exhausting refuting them. That said the simplest to disprove is his theory that the euro was bad for Italy and it didn't grow when it joined the Eurozone. It just did. It's a statistical fact by any measure. There is simply no argument about it.

Italy has been in the ERM and ERM-II along with the Euro. For those who might no know. By the time ERM-II rolled around Italy was finally controlling it's galloping inflation caused by the Lira's repeated devaluing. This reduced the cost of financing their debt by billions. Labour productivity increased and the countries GPD quadrupled since ERM. It very much appears to me that the EZ changed the country for the better by any metric.

And as for his "moral" objection, spare me. He is an apologist for Putin. Mattarella's motives can be examined but they also have to be framed within his constitutional powers, his past politics and actual statements. Varoufakis on the other hand is not shy about offering his opinion on NATO, EU and Russia.

What is ultimately attractive about him is he wraps his theories up in just enough truth to make them sound plausible. I'll forgive lay people on the internet falling for his shtick but it repeatedly amazes me how much editors fall for it. 10 minutes research proves he is just wrong about much of what he says.

He is basically a far-left Farage. Highly charismatic and a wonderful speakers but their political "theories" are nonsense. Both have seen the end result of their theories and cut and run as soon as the reality proved to be a little different to the theory. He will say anything for attention now. Pay him no heed. And be wary of outlets that do.

Will Liga Nord make hay from this? Of course they will. However many commentators and pundits, including many in Italy, are actually operating on the theory that the whole affair was a cynical ploy by Liga Nord and M5S. They never intended to form a government and probably don't want to either. They are both far more powerful in opposition. It remains to be seen how that plays with the voters. It's simply not a cut and dried or as inevitable Varoufakis puts it.

Then again, it rarely is.

Axon wrote:

Italy has been in the ERM and ERM-II along with the Euro. For those who might no know. By the time ERM-II rolled around Italy was finally controlling it's galloping inflation caused by the Lira's repeated devaluing. This reduced the cost of financing their debt by billions. Labour productivity increased and the countries GPD quadrupled since ERM. It very much appears to me that the EZ changed the country for the better by any metric.

I dunno about this. Italy's GPD growth rate has averaged 1% since 1960. Peaking at (approx)10% before 1970 and averaging around 1.5% since about 1991. With the overall trend since 1980 for a slowing in GDP growth. Neither the UK nor Germany display a similar slowing in growth over that period. And since the financial crisis their actual GDP has been in free fall with no particular signs of sustained recovery.

So, sure there has been economic growth in real terms but the data suggest GDP growth could of (or should have) have been stronger in that period.

The question then arises what happened to that lost growth? Is it purely intrinsic, a consequence of bad domestic economic policy? Or is it extrinsic in some capacity? Trade is something of a zero sum game; whatever I export must be someone else's import. Has German's stable GDP growth come at the expense of Italy's? And if so it is fair to ask what the mechanism is for that and the management of the ERM, Euro and Common market would reasonable places start looking.

Thanks for the pushback on that guys!

Crosses Go Up in Public Offices. It’s Culture, Bavaria Says, Not Religion.

When the order came to hang a cross in the entrance of every state building in Bavaria, the mayor of Deggendorf was not particularly bothered by the religious symbolism.

Crosses are already ubiquitous in Deggendorf, a picture-perfect town on the Danube. There is one in his office and another in the room where town officials perform civil marriages. The fire station has a cross on the wall, as does nearly every classroom in every public school.

“This is about culture, not religion,” said the mayor, Christian Moser, adding that the separation of church and state was “a given.”

Actually, it is, and it isn’t.

Religion is in decline in Germany, but religious symbols are making a powerful comeback as part of the simmering culture wars playing out from Berlin to rural Bavaria three years after the country opened its doors to more than a million migrants, many from predominantly Muslim countries.

The order to hang crosses had come from “up high,” Mr. Moser said, pointing skyward. At least, in earthly terms: It came from Bavaria’s new conservative premier, Markus Söder, whose Christian Social Union is in a tough race before state elections in October.

Mr. Söder faces a stiff challenge from the far-right, anti-Muslim Alternative for Germany party, which has been gaining ground in wealthy, largely Catholic Bavaria and has been campaigning on fears of Islamization.

Deggendorf registered the highest vote for the Alternative for Germany, or AfD, in western Germany in last year’s national election. Critics say the cross initiative is at least in part a ploy to lure votes away from the far-right at the polls.

Mr. Söder (who happens to be a Protestant) has insisted that the “cross is not a sign of religion” but of identity and culture, and its display therefore is not a “violation of the principle of neutrality” by state authorities.

His argument echoes a controversial ruling by the European Court of Human Rights in 2011, which found that a publicly displayed cross was “a passive symbol,” not a form of “indoctrination,” and thus something European countries could allow according to their history and tradition.

Germany, after a high court ruling in 1995, has generally followed a rule that crosses can be displayed, unless someone is offended enough to challenge their presence. That rarely happens.

DanB wrote:

I dunno about this. Italy's GPD growth rate has averaged 1% since 1960. Peaking at (approx)10% before 1970 and averaging around 1.5% since about 1991. With the overall trend since 1980 for a slowing in GDP growth. Neither the UK nor Germany display a similar slowing in growth over that period. And since the financial crisis their actual GDP has been in free fall with no particular signs of sustained recovery.

So, sure there has been economic growth in real terms but the data suggest GDP growth could of (or should have) have been stronger in that period.

That is quite a statement to make. Let's take a look at Italian GDP since the war

IMAGE(https://i.imgur.com/AFpg9ak.jpg)

ERM was 1979 and ERM-II/Euro was 1999. It's a serious stretch to suggest that growth would have been better outside of both mechanisms. The simple fact is Italy was a basket case prior to joining and the discipline imposed by the ERM clearly helped them. If you're going to suggest that outside the ERM, Italy was suddenly going to reverse their previous practices of devaluing you've got a hill to climb. The other country that we do know that followed that policy, and was free to outside the ERM, was Greece but let's no go over that disaster.

Again, the EZ was of benefit for Italy, it is simply not open to argument. Counter-factuals are almost worthless here. Why can't I claim that growth would have been higher if it wasn't for domestic policies that lead to stifling bureaucracy, widespread corruption and inefficient justice and education systems? Neither of us can prove hypotheticals but we can clearly see the data.

DanB wrote:

The question then arises what happened to that lost growth? Is it purely intrinsic, a consequence of bad domestic economic policy? Or is it extrinsic in some capacity? Trade is something of a zero sum game; whatever I export must be someone else's import. Has German's stable GDP growth come at the expense of Italy's? And if so it is fair to ask what the mechanism is for that and the management of the ERM, Euro and Common market would reasonable places start looking.

Perhaps. Is the Euro perfect? Nope but it's hardly a complete negative. As I've said before, I lot of countries that didn't have the benefit of living with a reserve currency now do and are aware of the benefits. It's very easy for UK and US citizen to suggest countries leave the Eurozone but often seem completely unaware of the advantages their currencies give them. I remember the Irish Punt very well and I ain't going back to it.

But let's suppose the Eurozone rules are at fault. Then you would find similar problems around the Eurozone, wouldn't you? Lets take one issue, youth unemployment.

IMAGE(http://nordic.businessinsider.com/contentassets/e6bd1a22b21f4adfa1f1d6483cda7339/5a04cde53dbef4ae448b4da8.jpg?preset=article-image)

Now, if the Euro is at fault for Italy's problems and not it's crippling bureaucracy and sclerotic labour markets then explain the vast difference across all Eurozone members?

Axon wrote:

ERM was 1979 and ERM-II/Euro was 1999. It's a serious stretch to suggest that growth would have been better outside of both mechanisms.

This is absolutely not the argument I'm making.

Axon wrote:

Perhaps. Is the Euro perfect? Nope but it's hardly a complete negative.

Not the argument either.

Axon wrote:

But let's suppose the Eurozone rules are at fault. Then you would find similar problems around the Eurozone, wouldn't you? Lets take one issue, youth unemployment.

IMAGE(http://nordic.businessinsider.com/contentassets/e6bd1a22b21f4adfa1f1d6483cda7339/5a04cde53dbef4ae448b4da8.jpg?preset=article-image)

Now, if the Euro is at fault for Italy's problems and not it's crippling bureaucracy and sclerotic labour markets then explain the vast difference across all Eurozone members?

And what you see there is the net importing countries have the highest youth unemployment. If the internal market of the EU is something of a zero sum game then Germany's low youth unemployment is coming at the expense of Greece, Spain and italy's. And as I have said elsewhere in this thread it will continue to be this way until the EU either fixes its currency/financial issues or pushes toward proper federation with real redistribution of wealth across the member states.

DanB wrote:

And what you see there is the net importing countries have the highest youth unemployment.

It's just not. Italy has a trading surplus, both internally and externally. Spain has a surplus internally and externally. It doesn't work the other way either. Austria has a deficit internally and a slim external deficit.

DanB wrote:

If the internal market of the EU is something of a zero sum game

It's not. The Euro Area economy has increased seven fold since 1979. The pie just gets bigger for everyone.

Again, it seems like you are working incredibly hard to avoid pinning the blame where it lies.

Axon wrote:
DanB wrote:

And what you see there is the net importing countries have the highest youth unemployment.

It's just not. Italy has a trading surplus, both internally and externally. Spain has a surplus internally and externally. It doesn't work the other way either. Austria has a deficit internally and a slim external deficit.

Yeah my bad, I've clearly misunderstood some stuff I've read else

DanB wrote:

If the internal market of the EU is something of a zero sum game

It's not. The Euro Area economy has increase seven fold since 1979. The pie just gets bigger for everyone.
[/quote]Well I'm talking about whether that gains are shared equally. Yes everyone's GDP has been growing (since 1970) but the question is why did Italy only see a 4-fold increase. Your argument would seem to be that it is for purely intrinsic reasons. But I'd say the interlocking reality of EU trade (or any international trade for that matter) suggests there must be extrinsic forces involved.

Well, it just so happens that the very same countries who blame those extrinsic forces for their failings seem to have ingrained problems that repeated government refuse to face up to.

Anyway, it appears we are back in business. Best line for me was

Powerful forces within Mr Salvini’s base were still arguing against a deal on Thursday

I bet they are

'Something has to give': Italians back euro but rail against EU’s rules

Ever since the inception of the EU, Italians have been among the staunchest defenders of the European project. But the political crisis that engulfed the bloc’s third largest economy this week, centring on a debate over Italy’s commitment to the eurozone, has spooked investors and worried Brussels.

It has raised a question that just a few years ago would have seemed unfathomable: are Italians ready to ditch the euro?

The answer, like most aspects of Italian politics, is complicated.

Opinion polls show that a majority of Italians – 59%, according to Eurobarometer – support the country’s continued inclusion in the eurozone. But that does not mean they want to continue to abide by the rules set by Brussels, which Italy agreed to when it adopted the currency.

Instead, more Italians are seeking a tougher and more antagonistic approach towards Brussels, after years of frustration over fiscal constraints set by the EU coupled with a feeling that Europe has abandoned Italy to cope on its own with the migration crisis. The latest Eurobarometer survey found that only believed their voices counted within the EU.

While a full break from the EU – an “Italexit” – is not a matter of public debate (such a move is considered implausible even among the most hardline Eurosceptics), surveys show Italians generally have a dim view of the bloc. Eurobarometer found that 39% believed Italy’s inclusion in the EU was a “good thing” and 44% believed Italy benefited from being in the EU.

In March, stagnant economic growth and concerns about immigration drove voters across Italy to vote in large numbers for two populist parties – the Five Star Movement and the League, formerly the Northern League – while the most pro-EU party, the Democratic party (PD), suffered a humiliating defeat.

Josef Janning, a senior policy fellow at the European Council on Foreign Relations, said: “There is no desire to exit. But there is a willingness to follow the League and the Five Star Movement and to say ‘we don’t want to follow the rules’. That seems to be the new consensus.”

Research by Roberto D’Alimonte, a political scientist at Luiss University in Rome, shows that among Italy’s biggest political parties, only the far-right League, which used to be a secessionist party, has a majority of supporters who want Italy to exit the single currency. More than half (56%) of all M5S supporters and 91% of PD voters want to remain in the eurozone, compared with 38% of League supporters.

Italians’ views on the eurozone are difficult to correlate with age or other demographics. D’Alimonte said the biggest indicators were employment status and education, with unemployed people – especially young people in the poorer southern regions of Italy – more inclined to have negative views about the euro.

Axon wrote:

Well, it just so happens that the very same countries who blame those extrinsic forces for their failings seem to have ingrained problems that repeated government refuse to face up to.

I guess I just see this angle as a false dichotomy. Both Italy and Spain's intrinsic economic policy can be bad AND the extrinsic forces can have negative (or non-optimal) effects on the economy. There is surely a complex interplay between these, it would be weird if domestic economic policy was not set in some capacity in response to what is going on the wider world. Although, given the UK's current state, I take your point that government's are perfectly capable of f**cking up their economies on their own.

Crosses have as far as I remember, always been ubiquitous here in Bavaria. I rarely even notice. Having them mandated, however, does not sit well with me, and the article is no doubt correct in saying that it's the CSU attempting to retain voters from the AfD.

Even at least one person close to me, whom I would have assumed would know better, has gone to the AfD solely because of the migrant issue...

There has been pushback on this. Some institutions of higher learning, such as Akademie der Bildenden Künste (Academy of Formative Arts), and the Neues Museum (New Museum), both in Nürnberg, have refused to put it up. As a result, there was an amendment that for arts and cultural institutions, putting up a cross is "a recommendation".

Fwiw there are plenty of academic economists on my side with regards the EZ and ECB being mismanaged. Simon Wren-Lewis's blog is a great resource for structuted criticism of the EZ.

Here's his review of a recent book from the deputy director of the IMF’s European department which is pretty scathing of ECB and EZ policy

https://mainlymacro.blogspot.com/201...

DanB wrote:

Fwiw there are plenty of academic economists on my side with regards the EZ and ECB being mismanaged. Simon Wren-Lewis's blog is a great resource for structuted criticism of the EZ.

I've got criticisms of how the Eurozone is managed. I could point you to economists here in Ireland that have issues with the EZ and the ECB. So does Merkel and Macron.

But here's the rub with that type of criticism the Wren-Lewis' offer, he seems to believe that support for the Eurozone is about to dry up or isn't there.

If the governing elite is the head and the people are the legs, the great danger is that the legs will not move and the eurozone will fall flat on its face.

Of course, if the political will for the currency drys up and it's not defended by it's Central Bank, it's going to break apart. But that is true for any currency, not just the Euro. He is basically offering a tautology as some insight which to me isn't useful. However what is clear is that popular support remains for the currency and did so during the height of the crisis so I'm he needs to paint a scenario where the former happens. I just don't see it.

I'm not coming down to hard on him as he does have good company. Ben Bernanke and George Soros advocated (as did Mody but I'll come to him), at different times, for Germany to leave the euro on the basis that the Germans wouldn't support the currency. They've all been proven wrong and it's long past due that many admitted their assessment was false and very much derived from a British press hasn't exactly proven itself to be very objective on anything related to Europe.

The real question quite a few people need to ask is "why?". I'm sure it's different country to country but that would be far more illuminating than the current methods many in the English speaking world use when approach the issue.

Also, his theory that Greece's problems are the cause of Germany's labour reforms are just easily disproved. If Germany was somehow "stealing" productivity or employment by suppressing wages (by a method that complete escapes me, I might add) then it would be spread equally across the Eurozone. It isn't.Therefore we are back to asking was is so unique about Greece and Italy (maybe Spain) from the rest of the Eurozone?

DanB wrote:

Here's his review of a recent book from the deputy director of the IMF’s European department which is pretty scathing of ECB and EZ policy

https://mainlymacro.blogspot.com/201...

I know Ashoka Mody very well. All of Ireland does. He got removed from the mission to Ireland and retired from the IMF soon after. He then spent his time hurling in the ditch (Monday morning Quarterbacking is the US equivalent) and predicting our country's failure. Glad we proved him wrong.

As for how his theories should have been put into practice when he had the chance. As our former Finance Minister put it best:

I suppose when he was there and when he was in a position to do something, he didn’t do much for us, so advice now that he is no longer in a position of influence, would be taken lightly,

Like I said above, I take an exceptionally dim view of those who were in a position to actually do something they at least thought was the right thing and fail to act but are happy to peddle their views in books and newspapers or from sidelines instead.

To dovetail the current discussion nicely, Pedro Sanchez, the new Socialist PM in Spain, is pushing for deeper Eurozone integration along the lines that Macron is advancing. To be honest, I doubt Sanchez's government will be around for too long but it's still a insight into the coming summit in June where the big topics are the Euro and Brexit.

In relation to Italy and while I disagree with his framing of the issue, Soros does make some excellent points. Maybe the quota system for immigration is flawed but what if structural funds were tied to the number migrants you accepted? I think the idea has it's merits. It's not as if the EU Commission doesn't have advanced tools to monitor how monies are spent thanks to historical abuses CAP system. Wouldn't be beyond the Commission to retool that system to track migrants and payments thereof.

I do also note that Soros admits that leaving the Euro is not a good idea. Not quite admitting his past opinions but interesting to note the shift.

On a slighty different point but related to European politics, Pred can you answer something for me? I'm in an Eastern European country to work with some team members for the week and I picked up the NY Times the hotel provides for free at breakfast the last few mornings. Do these articles appear in the main paper or they for the European edition? I ask because they simply don't reveal the truth on the ground. Take the first sentence of that article:

By finishing first in national elections in Slovenia on Sunday, the hard-liner Janez Jansa has ridden a right-wing populist wave into power in yet another European country.

That is just inaccurate. And badly so. It is true that SDS got the single greatest number of votes but they only got 25%. Not nearly enough to form a government. On top of that they have no party that wants to go into coalition with them. It's not ideal but the picture that the article continues to paint with that single point just seems a made to fit a narrative as opposed to actually impart the reality.

Same can be said with this article. Why are we getting the views of a Norwegian investment bank and not a French or German one or any EU member state? Why does Spain changing government result in division? Does the author not realise that the Trade Commissioner has complete authority to act? Again, it seems a series of unrelated points stitched together to fit a view.

My question is: is this common? Is there a narrative in the media in the US that Europe is at each other's throats and divisions are common place? I can't shake the feeling that there is some echoing of the British press going on here which even at this point must be seen as unwise. While it was interesting having the myth about the French serving wine to children busted (Thanks for correcting and apologies for being stupid for decades, Elemia) it just seems odd to completely misunderstand the largest trading bloc in the world.

Axon wrote:

My question is: is this common? Is there a narrative in the media in the US that Europe is at each other's throats and divisions are common place?

I hesitantly answer yes. US coverage of the recent EU elections I noticed: German, French and Italy all had a large thread of "what does this mean for the EU?!" with the implication (I thought) that the EU was in a very wobbly and fragile state.

This is something that the Overton window has moved really far on. Since almost all conservative policies are basically things that you can empirically verify are sh*tty because European countries do them differently and those different policies have better effects, the conservative media is all about how Europe is an unstable economic mess just seconds away from plunging into disaster. The non-conservative media is very fair to both sides by implying that maybe Europe is an unstable economic mess just seconds away from plunging into disaster.

Makes a degree of sense. It's just very odd to see an otherwise professional organisation perform so poorly in this area. It's not as if the facts involved are that hard to impart or grasp.

So, with the summit approaching in June is appears that we are going to see deeper integration. It appears that Macron and Merkel agree on more than they disagree on. Strengthening of the euro, deeper military co-operation and funding the asylum-seeker process seems to be the most pressing issues. As this is post the Italian elections it's interesting that Merkel is now quoting Kant. One suspects she realises that her philosophy of maintaining the status quo has run it's course and with Macron in her ear she can see the writing on the wall. Merkel is pragmatic if anything.

What is revealing about these is that the proposals, with the exception of the asylum process, is to operate them outside of the EU, Eurozone and NATO, with control retained in the national capitals. Operating outside of those organisations makes them less vulnerable to difficult member states and retains the nations sovereignty in relation to those issues. Makes setting them up slightly more straight forward as well.

Merkel coalition at risk as talks on refugee policy falter

I've seen scuttlebutt that this may genuinely be the end of Merkel.

Angela Merkel has come under under intense pressure to tighten Germany’s refugee policies or risk the collapse of her coalition government as an increasingly urgent argument over how to handle irregular migration rattles Europe.

While the standoff between the chancellor and her interior minister, Horst Seehofer, continued on Thursday, the French president, Emmanuel Macron, and Italy’s new prime minister, Giuseppe Conte, said they would discuss “new initiatives” on immigration this week in Paris.

A day after the Austrian chancellor, Sebastian Kurz, called on an “axis of the willing” to tackle the EU’s migration impasse, Pope Francis also weighed in to the debate, demanding more international cooperation on refugees and a “change of mindset” from politicians everywhere.

Merkel and Seehofer spoke for two-and-a-half hours on Wednesday night without reaching agreement on the hardline interior minister’s demand that refugees who arrive at Germany’s borders should be turned back.

The chancellor is said to have urged Seehofer to wait until a 28 June EU summit at which she would seek a Europe-wide agreement. But Seehofer reportedly told her the EU had failed to forge a common policy since the refugee crisis erupted in 2015 and it was hardly credible to think it would do so by the end of the month.

A Bundestag session was interrupted for two hours on Thursday morning so Merkel’s Christian Democrats (CDU) and their Bavarian sister party the CSU, to which Seehofer belongs, could hold separate emergency meetings.

Merkel, the EU’s longest-serving leader, on Wednesday called immigration “a litmus test for Europe” requiring “a truly unified approach”, but amid signs that support for her within the CDU is dwindling on the issue, it has also become a flashpoint for mounting tensions within her own conservative bloc.

Italy and France, meanwhile, sought to patch up a worsening diplomatic row over the same question, triggered by Macron’s description of a decision by the Italian interior minister, Matteo Salvini, to deny a migrant rescue ship access to Italy’s ports as “an act of cynicism and irresponsibility”.

Rome summoned France’s ambassador on Wednesday and Salvini, leader of the far-right League party, demanded an apology, but the Elysée palace said on Thursday the French president had “not made any comment intended to offend Italy or the Italian people” and that Paris sought “constructive dialogue”.

The row centred on the Aquarius, now on its way to Valencia in Spain with 629 migrants rescued off the coast of Libya last week. The ship, operated by the charity SOS Méditerranée, was turned away by both Italy and Malta.

Salvini insisted on Thursday that ships “belonging to foreign organisations and flying foreign flags will not be allowed to dictate Italy’s immigration policy”.

More than 1.8 million migrants have arrived in Europe since 2014 and Italy is currently sheltering 170,000 asylum seekers and an estimated 500,000 unregistered migrants. More than 1 million migrants arrived in Germany in the summer of 2015 after Merkel opened the country’s borders.

The June summit in Brussels is due to discuss proposals to change the bloc’s asylum laws, which currently require refugees to apply for asylum in the first EU country they enter, generally Italy or Greece.

But the bloc is bitterly divided over how to share the burden between southern “frontline” states, northern “destination” countries, and hardline central and east European governments like Hungary and Poland which want nothing to do with any compulsory quota system.

IMAGE(https://i.imgur.com/9dzu96w.jpg)