Letter from Santa

From Xmas 2011 and Austerity has reached the North Pole

Dear All,

First of all, Christmas is postponed, probably until Q2 in 2012. The reason is that we’ve all been waiting for the markets to quiet down so I can shuffle some funds around before we can get into serious toy production. What? You’re surprised? Of course I need hard cash to get this show on the road, did you really think I finance it all with magic beans? Stability bonds?

And another thing. There’s going to be a delivery charge. Normally a bit of pie and whisky is a suitable trip for my chimney acrobatics, but as things are tight, you want to leave around €20 per kid with the booze. Oh, and no cheap supermarket stuff. A single malt is what’s required, or at a push, some Wild Turkey. It’s purely medicinal and helps keep the cold out while I’m riding the jetstream.

I’m also going to tighten up the rules on who’s been naughty. Frankly, being a kind old soul, I let a lot of stuff slide, you know the minor bits of trouble they all get into, thinking it was all part of growing up, but the fiscal situation means that I’m going to be applying the naughtiness criteria a lot more strictly. Be prepared for it. Leave a folder of supporting evidence by the bedside, it will save time.

Of course some things change. I might pop over Italy. I’ve avoided it for several years after Berlusconi suggested I should visit his party after I’d finished my rounds. Very nice it was too, a BBQ, lots of ladies and sambuca . Left the sled outside and went back to check on it a few hours later. One reindeer missing. The little swine had taken one of my finest sleigh pullers and cooked him.

Poor little Bunga Bunga, he was a favorite of mine. For Berlusconi to BBQ him was bad, to then feed him to me was very bad, but to then go on and name his sordid little gatherings after sweet little Bunga Bunga is just grotesque. I’ve not been back since. I would go and see Mario Monti, but, well, what do you buy the man who has… nothing?

The other big news is that I’m leaving the North Pole. It’s melting and I’d rather not take the chance that I’ll be spending the New Year watching my home melt. We had a group of slightly too shiny young things looking the place over for signs of global warming, wanting to “make observations on climate change.” Got ‘em smashed on home brew vodka (aka Santa’s Little Helper), got the elves to strip them down to their underwear and left them on a small iceberg. They looked like Smurfs as they drifted off. Not too sure where, exactly. Let’s say it’s a pretty good bet that they’re heading south.

So are we all. Watching a Herzog film about Antarctica, with the elves and a few drinks, we were stunned to see the South Pole base. Now, we kind of knew that our place was going a bit downhill, but when we saw that base, we all looked at each other and thought. “Nice. We’ll have it.” Already occupied? No problem. I’ve been showing the elves John Carpenter’s remake of ‘The Thing’. They’re finding it inspirational…

I reckon they’ll have it cleared in a few days.

Who's really paying for the financial crisis?

John Monks, was head of Europe's Trade Unions and is now a Peer

Interview with: John Monks Head of European Trades Unions in 2010

In a rare moment of summer heat in Brussels Andy Carling sat down with John Monks the Secretary General of the European Trade Union Confederation to talk about workers rights, just how we may get out of this financial crisis without increasing the levels of poverty and things that he and European Commission President Jose Manuel Barroso agree on. The interview follows below.

There seemed to be some unanimity between you and Barroso over the risk of social unrest right across Europe, but you seem divided on how you avoid it.

This is a very, very dangerous period for Europe because the economic crisis was the most severe crisis, and it’s affected the world, rather than specific countries. The costs of the bank rescue have been transferred to the public balance sheet. Within a period of about three or four weeks, the mood in European governments changed, from being relaxed about debt, to panicking.

Greece was the start and it spread to Spain and Portugal and the rest of them dread being in the same position, not least Britain. If Standard and Poor or Moody’s mark you down, that sends your interest rates up and the Greek one is still, on a 10 year market bond, over 10% a year. On a German one, it’s 2.5%.

The power of the markets, which were ironically bailed out by the bank rescues, otherwise they’d have all gone down, has now turned their attention to sovereign debt. They managed to transfer their debt onto the public authorities, who are now in trouble. The initial response to the crisis was quite good, they kept up spending, stimulus packages to varying degrees.

The European approach, since the problem burst on individual countries has been less sure. It took them a long time to deal with Greece and the price of dealing with Greece has got higher and higher. Worse, the terms that Greece has got are penal. The basic message being, if you get into the position Greece was in, Europe will punish you, you’ve broken the rules.

Not only the terms are severe, they’re more severe than the IMF is imposing on other countries, but they’re more detailed. It’s almost a colonial imposition. The German approach is that it’s the rules that matter. We’re going to be tough. Whether the social systems of these countries can stand it, we just don’t know. The real pain will come this Winter. The cuts at the moment have been the prospects of cuts. They’re plans, not operative yet.

Some are arguing for austerity packages as a short, sharp shock? Could that approach have longer term implications?

The question is what kind of short, sharp shocks? Sweden did 50/50. 50% taxes on the rich and comfortable and 50% of public expenditure cuts. They spread the pain in a way that was socially cohesive. Nobody’s talking  50/50 now.

Cameron (British Prime minister), is talking 80/20. 80% public expenditure cuts and 20% tax, not always on those who can afford it. To be fair to him, He’s not Thatcher. He’s very different to her. The very poorest may be protected but those just above will be paying the bloody bills for it.

I think the effects on employment will be harsh. In many areas, especially the poorer ones, 50% are employed through public services. The public sector share of GDP is 50% - 60% in the weaker parts of the UK.

Will we face social unrest?

I’m aware of the pressure from a lot of countries, for Europe wide action. We’re having a day of action on September 29 and that’s building up to be a big thing, there could be 70,000 from Belgium alone.  There will be demonstrations in other parts of Europe and it’s getting momentum.

What effect could these austerity packages have on the European project?

There’s no doubt about it, that Germany, the Netherlands Finland and others believe that you can’t have a sound social system without sound finances. Secondly, they’ve managed more or less to achieve that. If they’re in the single currency zone, that’s got to be the rule otherwise they don’t want to be in the zone. They’re not giving people a free ride.

That is a political reality that the rest of Europe has not yet adjusted to.  The terms for any bailout are getting tougher. Is Europe going to be popular? It’s not, is it? It’s the IMF plus, particularly for countries in the Eurozone. You can understand why somebody in Germany could ask, why didn’t think of that before, but the Euro is a benefit to Europe. God knows what would happen to all the currencies in this crisis, a 1931 type crisis, if we didn’t have the Euro. This is a massive stress test for the Euro.

These cuts being imposed are being imposed, not just in Greece and Portugal, but also in Germany, where they’re obsessed with austerity and I don’t think they need be. I believe in counter-cyclical spending by governments, buy Keynesian economics never went very deep in some parts of continental Europe.

Talking of the 30’s is quite an emotional statement and coupled with Barroso’s reported apocalyptical remarks about the possibility of states losing democracy.

He didn’t quite say that. He did say they could not survive in a recognizable form, which we interpreted as the return of the colonels or something, but he would deny he was quite that lurid. But the mood towards austerity packages is “if you do it you’re in trouble, if you don’t, you’re in a lot more trouble”.

What is your vision of a solution?

We argue that there should be a concerted effort by the EU to spend. 1.4 of EU GDP, which is a hell of a lot of money, on a recovery package, that would be financed, in the main, by Eurobonds, issued to the Euros credit, which is strong, and financial transaction taxes. This would fund investment in sustainable technologies, investment in the young, who are getting screwed most at the moment by the economic situation. Youth unemployment is double the average, and support for the weaker regions.

A fund needs to be assembled, operated by the EIB or EBRD so we’ve got some growth spots and the charge doesn’t appear on the national register.

Set the economy to stun

There are no signs of intelligent policy, Jim

It's Greece Jim, but not as we know it

The finale of the second Star Trek movie, The Wrath of Dominique Strauss-Kahn, is more relevant to the EU than it may appear.

To save the ship and crew of the USS Free Enterprise, Spock, a cold, emotionless Vulcan, who fails to understand the personality and manifold quirks of his fellow officers and crew enters the radiation filled engine room and saves the day, sacrificing his life.

As he dies, he sees Admiral James Kirk, the rash, impulsive and fallible friend, who has rushed to try and save his friend.

As Spock dies, he explains himself to his distraught commander, “Don’t grieve, Admiral, it’s logical: the good of the many outweighs the good of the few, or the one.”

A little metaphor for the Greece/German crisis, it appears, except that the understanding of a higher purpose comes from the emotionally sterile Vulcan not the all too human Kirk.

It what passes for the real world here in Brussels, it is the new untermensch, the Greeks who are asking to look higher, further than immediate, selfish concerns and the emotionally stunted Vulcans who are demanding they rule over all.

Let us not forget that German solidarity is really only solidarity towards Germany’s banks and business and the creation of economic lebensraum. Merkel, the second least liked German Chancellor in history went ballistic when her EPP spitzenkandidat, Commission President Jean-Claude Juncker had posters put up in Germany for last May’s election with the slogan ‘Solidarity’. We can only assume that she has nothing but contempt for the word and concept.

The German interpretation of solidarity and assistance has pushed Greece into sub-Saharan Africa levels of poverty, while, and this is the real cruelty, blaming ordinary Greeks for their woes.

It is said that austerity has to continue because of public sentiment. Who can blame them? They’ve been told that it’s all the fault of the feckless, workshy, dishonest Greek citizen.

Well, as Tony Blair discovered that telling his people that Iraq had WMD and Islamic terrorists, repeating the Big Lie doesn’t make it true, nor does it lead to good policy choices.

Complicit in this is the Socialist and Democrats Group, led by election loser Martin Schulz, whose party just happens to be in coalition with Merkel.

Indeed, one positive aspect of the crisis is that it appears to have silenced the garrulous former bookseller. Less positively, Europe’s centre-left has been austerity-friendly for many years, leaving them with only mealy mouthed platitudes and statements that may have been typed by a near-infinite number of monkeys, who just can’t get to Shakespearian levels.

Asked to explain why the S&D lost the last election, with austerity, unemployment, anger etc that, on paper, would give them a landslide, Hannes Swoboda told New Europe why they lost, “We didn’t stand often enough with the victims of austerity.”

That position appears to be the case today. It is sheer cowardice. The public are set to vote for those that either say ‘no to austerity’ or ‘to the Devil with them all’.

Austerity has not only destroyed a member state, it’s finishing off mainstream politics.

Will this do anything but encourage a Brexit in a referendum? What will happen in the next European elections? By then it will be clear that even national elections are completely ignored if they go against what Germany wants. How is this going to do anything but hammer in the final nail in the coffin?

Remember, we’re risking everything for a policy that does not work.

The Pepperoni Job

An illegal immigrant

Austerity in Switzerland is different

Austerity has hit Europe in many ways, but the Swiss do austerity differently to others.

Since de-linking the currency from the euro, the Swiss franc has risen sharply and the Swiss have been looking at how to save money.

One solution has been a sharp increase in cross-border pizza deliveries. Peckish Swiss have been phoning pizzerias from Constance in Germany, leading to a stream of pizza vans, carrying up to 80 of the Italian dishes over the border.

The mayor has said Swiss border guards have stopped the great pizza escape and the sound of margarita delivery has been silenced after they began checking vehicles suspected of bringing in immigrant pizzas.

A special dispensation, scrapped a year ago allowed food deliveries over the border, but as a spokesman for Swiss customs said, this led to businesses targeting Swiss customers as prices were up to 50% cheaper across the frontier.

The Swiss finally got cheesed off with the increased traffic.

The Chamber of Industry and Commerce (IHK) for Hochrhein-Bodensee, the region on the German side of the border are lobbying for a return of the exemption. The organisation’s head, Uwe Boehm said “IHK Hochrhein-Bodensee is disappointed with this information and will, in the interests of our member companies, continue to work to find a solution.”

The same crossing point was popular in the Second World War with many escaping allied servicemen making the dash across the Swiss border.

The old hands are in despair

At the end of the Barroso Commission, the most experienced staff are heading for the exit after seeing Europe crumble and lose its purpose

It’s widely accepted in the EU institutions that a challenge is often an opportunity that went horribly wrong, indeed this was a motivation behind becoming the first Chief Happiness Officer to the EU.

 

While some do carp and complain, the need for the care and nurturing of the staff in the institutions, the little nuts and bolts that keep the whole show on the road, has been neglected for too long.

 

If that wasn’t bad enough, the member states are sticking the boot into the civil service, instead of doing something actually useful, like shutting down Strasbourg and saving real cash.

 

There is still much gloom around, especially with the more mature end of the staffing spectrum. Some of whom have been looking at the future with concern and have been making arrangements... to get themselves shuffled off into areas that look like being atrophied, yet can’t be shut off.

 

There are increasing numbers moving to obscure rooms, where they will have no duties at all and can sit it out till pension day. It’s an old practice, think of it as moving to DG DIGNITAS.

 

There are many of the ‘old school’ feeling despondent after a career in occasionally asbestos smothered offices for decades, trying to build a peaceful Europe that was good for both trade and those on the lower rungs of the social ladder.

 

It’s these people, whose work routinely involved trying to transform the whims of the great and good into something real, they know that the member states never let the union develop, that Europe was being strangled by incessant squabble over national interest. These will be the `special forces` of the drive to cheer up the institutions.

 

Leaders come and go and the continent somehow survives their meddling. Although we are in strange days, where the cry of “More Europe!” has morphed into “More Barroso!” and may be become simply “More More!” shortly, we are in a fortunate moment and it’s up to each one of us to use it.

 

It’s time to begin work on EU 2.0. We have had a system crash. We need a new operating system installed. Take a look at Linux. The open source model might be a better way forward. What makes this time different is that it might just work. The situation, short, mid and long term is so bleak that a reboot might happen, admittedly because all else failed.

 

We have a year at most. So far, around 25% of voters are looking away from the main political parties, this varies, but the trends are not good. When it comes to increasing support for eurosceptics, we should consider if people are voting against, not Europe, but austerity Europe.

This may not be the most optimistic report by a Happiness Officer, even a junior one, but this is no time for games or silly gimmicks. Being a Chief Happiness Officer is not just a job, it is a moral calling and there is only one way to be happy, by living up to your potential and contributing to the betterment of the world.

 

This is what must be done.

 

Berlaymont workers, do not be distracted by the caterwauling of those whose ineptitude has brought the continent to the edge of extinction.

 

Don’t mourn, organise!