Is the EU suited to handle the crisis? April 1, 2009
Posted by Sverre in : Political economy, World politics , comments closedKeeping up the recent days’ interest in the EU’s response to the financial crisis, I came across Megan McArdle’s comments on the apparent failure of EU states to apply enough stimulus to the economy, and points to a significant system failure within the EU system:
But as multiple people have blogged, this isn’t just a matter of the infamous tight-fistedness of Germany’s fiscal and monetary policy, born out of the ashes of Weimar; it’s genuinely harder for Europe to run a stimulative policy. For one thing, they can’t coordinate a broad European policy, which means that any government will see substantial amount of any stimulus “leak” abroad–and also that there is great temptation to free ride. For another, they aren’t the world reserve currency, so they can’t borrow on the same lavish, practically interest-free scale as the US Treasury.
What are the French up to? March 31, 2009
Posted by Sverre in : Political economy, World politics , comments closedJust after writing the post on Le Maire’s speech, I came across this news story from AFP, that French president Nicolas Sarkozy is threatening to walk out on the G20 summit unless he gets his way. According to Bloomberg, what he’s after is:
[…] to give more economic oversight power to the International Monetary Fund, and more financial oversight to an institution that would derive from the Financial Stability Forum, a group that brings together senior representatives of national financial authorities, regulators, central banks and international financial institutions.
The French leader is pushing for the G-20 to endorse accounting rules that reduce boom and bust economic cycles, and to regulate hedge funds and rating agencies. He’s calling for rules that would force banks to disclose traders pay to regulators, which could in turn ask financial institutions to increase reserves if their compensation system encourages risk taking.
The French do seem to be taking a confrontational line to get international actors to work together. This might possibly just be a display from Sarkozy’s side to show his domestic audience that he is taking action, without having to dig too deep into France’s own coffers. His moral-religious rhetoric seems to support this theory.
An EU-US trade war in the making? March 31, 2009
Posted by Sverre in : Political economy, World politics , comments closedI was listening to an LSE podcast of a lecture by French Minister of State for European Affairs Bruno Le Maire, when I heard some surprising statements made. He was talking about how it was important for European nations not to resort to protectionism in the face of the current crisis when he happened to make some interesting, possibly disturbing, statements. He talks about the difference between protecting your industries and protectionism. I can’t spot the difference, can you? (from approiximate 1h10min into the speech):
[…]so I am not in favour of protectionism, as I just said, I am just in favour of European measures – measures decided at the European level – that would prove to our citizens that we are taking into account their fears and worries and that we are trying to protect our European economy, that we are trying to protect our industries. This is a very difficult balance we have to find, but this is not protectionism. Protectionism means today that the UK would take some very concrete measures just to protect one of its plants, in New Hampshire for example, or London. Or that France would take some very national measures just to protect one of its industries or one of its plants in Normandie or the south of France without taking into account the interest of the UK and Germany and Spain and Italy. That’s the difference between the two ways of protectin industries and protecting our economies[…] (more…)
A new Mussolini or Caesar? March 30, 2009
Posted by Sverre in : World politics , comments closedThe controversial Italian politician Silvio Berlusconi has the wind in his sails as he surges towards increased power in Italy. His right-wing alliance was recently united into the party Il Popolo della Libertà (People of Freedom) under his leadership, and the first thing put on the agenda was giving more power to the Prime Minister.
The Italian premier apparently feels that the parliament is unwieldy and dominated by an “irresponsible opposition“, making changes to the consitution necessary. According to Financial Times, he proclaimed that:
The constitution must be enriched and revitalised … The powers of the prime minister are almost non-existent … The country needs to be governed.
Several commenters speculate that what he wants to achieve is transforming the figurehead position of the Italian president into an active executive position with extended powers like France or the United States.
With personal control of more than 90% of broadcast media through active ownership, he is already the most powerful politician in Italy since Mussolini, and many now seem to be afraid of the emergence of a new authoritarian rule in Italy. Letting the military spearhead a new crackdown on crime is especially worrisome.
I don’t know Italian politics nearly well enough to speculate on the nature of Berlusconi’s plans, but Julius Caesar’s famous crossing of the Rubicon with his legions does come to mind – Alea Iacta Est.
YouTube: A modern-day propaganda leaflet March 21, 2009
Posted by Sverre in : Political economy, World politics , comments closedEver since WWI, propaganda leaflets dropped behind enemy lines were an important tool in trying to weaken support for whoever was in charge among the local population. It is believed to be an effective tool, which is why it is still in use in conflicts around the world. One of the defining aspects of Obama’s campaign to become president was how well he was able to exploit the new social internet media to his advantage. And he has apparently taken this with im into the White House.
Yesterday, he released a Youtube video aimed at the Iranian people, obviously in an effort to convince Iranians that the United States hopes for peace and does not want to be enemyof Iran. You can see the three-minute video here:
[youtube=http://www.youtube.com/watch?v=6MDklneATBI] (more…)
Najib’s challenges March 17, 2009
Posted by Sverre in : Malaysia, World politics , comments closedThe Far Eastern Economic Review carries an interesting article about the challenges faced by the new UMNO leader Najib Tun Razak as he is just now ascending to the throne of the Malaysian ruling party. His predecessor was punished by the electorate for failing to deliever the reforms he had called for. Now Najib is about to take over power when it is at an all time low, and when Malaysia is plagued by new political scandals weekly. Barry Wein from FEER notes that the hereditary nobleman Najib, political hot shot since the age of 22 and son of the founder of the government coalition, seems a very unlikely candidate to be a big reformer and steer Malaysia towards real democracy. From what I’ve learned through following Malaysian politics, I would concur.
EU fails to help its eastern members? March 3, 2009
Posted by Sverre in : Political economy, World politics , comments closedEastern Europe has been hit hard by the financial crisis, and were hoping that the EU would be able to help them over the worst of it. Figures presented by Eastern European government claimed that 5 million jobs were in imminent danger of being lost, something that would seriously hit the entire EU and potentially drop a new iron curtaion over Europe. At a summit this Sunday, the EU rejected a bailout plan designed to help Eastern European nations, mostly outside the Euro area. Was it a sign that Western Europe doesn’t want to help their eastern neighbours, or was it just the rejection of a bad plan? If the former, the entire EU project might be about to fail one of its toughest tests yet. (more…)
Perak, Malaysia – a constitutional monarchy gone haywire February 7, 2009
Posted by Sverre in : Malaysia , comments closed
An interesting political conflict is taking place in the state of Perak in Malaysia these days. Things have turned into complete chaos with a government that won’t resign, a monarch that won’t dissolve the parliament and two political alliances trying to steal each other’s representatives with all means necessary. All claim to have the constitution on their side and accuse the others of acting unconstitutionally.
After the 2008 elections, the state parliament is divided almost 50-50 between the opposition alliance PKR and the government alliance BN. Until now, the state had a PKR government who ruled with a 3-member advantage in the parliament. So far pretty straightforward, but then it becomes complicated… (more…)
The sinister conspiracy behind the finance crisis January 28, 2009
Posted by Sverre in : Malaysia, Political economy, World politics , comments closedThe conspiracy has been found. As always we can rely on Malaysia’s perceptive grand old man, Mahathir Mohamad to see through the smoke screen of western economics and discover the hidden threads that are being pulled. And this time he has returned to a good old classic:
The jews did it
8. The current financial crisis which is destroying the economies of the U.S. Britain and in fact all the countries of the world is due to manipulations of banks, financial institutions and the monetary system by Jewish supporters of Israel. (chedet.co.cc)
And why is this interesting? Because this isn’t just some random crackpot blogger. This is the man who led Malaysia for just about three decades and has been seen as one of the more prominent moderate voices of the Muslim world. This is the man who crossed the IMF and handled the previous finance crisis in ’98 in his own way. This is a man many still listen to.
How the financial crisis helps Israel is still somewhat unclear to me.
No change for Malaysia? January 27, 2009
Posted by Sverre in : Malaysia, World politics , comments closed
There is a mood of anticipation over the world as Barack H. Obama (as I now understand we should call him) has taken his seat in the Oval Office. This mood of anticipation and great expectation of change is not unlike what had the opposition movement in Malaysia whipped up last year when Anwar Ibrahim made his comeback into Malaysian politics. But did change never come?
September 16 2008, the opposition movement’s new national day, was announced to be the day the roots of the Malaysian establishment would shake and mass defections from the government coalition would be announced. The blogging community and opposition coalition leaks had the tally at more than 30 MPs ready to jump sides, and the Pakatan Rakyat opposition coalition ready to sweep in and take power. But the day came and went with out much of the announced ruckus. Certainly no mass defections. (more…)