Showing posts from July, 2015

Why the UN is Marginalized

The United Nations seems "marginalized", as many people of goodwill have told me time and again. These are people who claim to like and support the UN yet they sound despondant about it, as if they no longer believed in it. A sad state of affairs...

In fact, the UN's 70th birthday that falls this year is celebrated with depressing discretion, yet the UN tries hard to work up enthusiasm on a dedicated website (here):

In spite of the flowery language - "A Strong UN, A Better World", "The UN Charter is our compass" - it would seem the UN no longer counts in world politics.


Two terrible mistakes were made at the birth of the United Nations (as I've already suggested in a previous post (see here):
1. Granting veto power at the UN Security Council to the winners of World War II: France, the UK, the US, Russia and China - this makes it impossible for the Security Council to function in a democratic manner, giving every member a right to vote; 2. Not s…

This is Why Aid Does Not Work

Africa has long been the litmus test: if aid succeeds in Africa, then we have a working model of what it takes to lift a country out of poverty and make an economy grow.

But aid in Africa, as researchers at the Brookings Institution recently pointed out, has failed in the past and is now failing miserably. Africa still has an extraordinarily large proportion of "working poor" - people who work hard and yet can't lift themselves out of the poverty trap. Industries exist in Africa, yet they don't expand, they don't attract workers and if they do, they pay them miserable wages.


Here are the reasons given by John Page in an excellent blog post about what President Obama missed in his African trip -  I recommend you read it in its entirety (click here):

What President Obama didn’t see on his trip to Africa    On his fourth trip to Africa, President Obama celebrated a changing continent. A change that he did not see, however, was growing numbers of workers in jobs …

Germany's Push Against the Euro

I'm reblogging this excellent post by Dr. Alf just out today, 29 July, drawing attention to an important article in the Financial Times.

In addition to Dr. Alf's very sound comments, I would just like to add:
if debtor nations leave the Euro, it means it's NO LONGER A VIABLE CURRENCY! The first countries to go would be France and Italy...

Of course, the country that will really suffer from Euro destabilization is Germany. 

Will anyone tell them?

The article was illustrated with this image (I didn't dig it out, the FT  and Dr. Alf did):

Let debtor nations leave euro, say German experts –
This is an important read from the FT, citing a report from Germany‘s Council of Economic Experts. via Let debtor nations leave euro, say German experts – Whilst the FT’s article is a good read, it’s well worth reading the evidence from the German experts. You can rest assured that it is being avidly read by mainstream economists around the world. I read the executive summary…

One Last Word about Greece and the Euro: Kaput?

Most economists consider the Euro a mistake, a non-viable currency. The proof that it is non-viable? It cannot face bad weather, as the Greek tragedy, started five years ago, has amply documented.

And now, drawing the lessons from the third, incredibly cruel bailout deal shaped by Germany's insistence on austerity, reforms and on Greece having to pay back its debt in full, it would seem that Grexit is more than ever on the table.

And not only Grexit. But also a Euro exit for France and Germany, as recently suggested by Shanin Vallée in an arresting New York Times Op-Ed commented by a Cyprus-based blogger, Dr. Alf (see here).

In short, we are talking now openly about the collapse of the Euro, something that was never done before.

Good-bye, Euro, nobody ever really wanted you in Europe. When it was conceived in the late 1990s, it was only meant as a way to force European countries to come closer together, a last step to oblige them to unite their economic and social policies, to cr…

Deutschland uber Europe: the End of a Dream?

The political fallout of the Greek crisis is hovering like a dark cloud over Europe. Germany - Deutschland - over all, over Europe. It marks the end of the European Dream.

Does anyone remember what that dream was?

For me, a United States of Europe is not the same thing as a United States of America. I never expected the same convergence: on the contrary, every European country's national identity - its History, its customs, its language - should be fully respected. And maintained within the Union. What I wanted was a convergence of a different order: a common foreign policy to promote European values and a common social policy (unemployment coverage, pension and health systems), giving the same benefits and same protection to every European citizen, no matter where he or she was born in the Union.

Most people don't see the European Dream in such big terms. Sure, they will refer to History, to the terrible two World Wars that shook the 20th century. And they will respond that …

Three Reasons Why the "Deal" with Greece will Lead to a Euro Breakdown

To say that I've been "up all night" fretting about the Euro is an exaggeration, but I am deeply worried. This is the first time in recorded History that a currency is politically manipulated by 19 Parliaments, the way the Euro is. The awkward, blundering micro-management of the Euro by a bunch of politicians (led by the German finance minister Wolfgang Schaeuble who apparently understands nothing about either economics or monetary management) is deeply troubling.

In the early hours of Thursday 16 July, after much wrangling, the Greek Parliament approved the bailout deal - the passing of "reforms" against a "third bailout" on much stricter terms - sealing its fate: the Euro show (with attendant austerity) goes on. Now the European Central Bank must provide emergency funding to revive the banking system and keep the Greek economy tottering forward. 

The Euro has already lost more than 9 percent against the dollar and stands to lose more as this Greek tra…

Greek Bailout: 4 Reasons Why it's Not a Done Deal

In my previous post I spoke of Germany's intransigence towards Greece, now we are seeing the fallout of that rigid position:

1.If the Greek Parliament doesn't pass the legislation the creditors have asked for by tomorrow, Wednesday July 15, Greece is out the Euro door, it's Grexit.
 This legislation - regarding pension reform, tax hikes, sale of state assets etc, in short, the whole austerity package - is nothing new. The language is all there, finalized in law proposals. The creditors, through the so-called "troika" negotiators (representatives from the EU, the European Central Bank and the IMF), have been asking for this legislation since 2011.

But no Greek government before Tsipras has dared pass it.

Can he do it?

He has a BIG problem: he must submit a bill with sales-tax increases and pension cuts that go against his own party's pledges. He looks like he betrayed the 61% of Greeks who voted "no" to the referendum he called for when he walked ou…

Shame on You, Germany, You are Killing the European Project

Today is D-day for the Euro. It looks like a technical matter but it isn't.

It has to do with the European project, the dream of having a United States of Europe.

This afternoon, the leaders of Europe are meeting in Brussels, at 4 pm, to decide whether Greece must exit the Euro or can stay in.

According to Bloomberg (here), European leaders will have to decide because their finance ministers can't: the German Finance Minister, Mr. Wolfgand Schaeuble, has successfully blocked any decision, screaming "Don't take me for a fool", refering to the Greek proposals.

The real fool is him.

Or perhaps, not so foolish but extremely wily.

Like a fox.

Think of it, years ago, he was involved in a corruption scandal in Germany - also known as the CDU donation scandal, it exploded twenty years ago -  and his career looked finished (for details, see here).

Until he was saved by Ms. Merkel who gave him a "second life" - and now he is showing his true colors, he is strangl…

The Drama of Children Forced to Work to Survive

Three months ago, in Kuwait City, at  a UN conference to raise funds for Syrian refugees, $8.4 billion had been requested to assist some 11 million Syrians, 3.9 that have fled their country since the start of the conflict in 2011 and another 7.6 million internally displaced. 

A major humanitarian crisis. 

Yet only $3.8 billion were pledged and as I write, just a quarter of that sum ever arrived at the UN's so-called "3RP" (Regional Refugee and Resilience Plan) that pulls together the UN agencies involved in humanitarian aid and their "partners" in civil society, i.e. NGOs and charities. 

Now aid to refugees must necessarily slow down if new funding isn't found. 

As reported by The Independent, refugees will have to go hungry (see  here).

Yet the emergency hasn't diminished, on the contrary. It has taken on a dramatic turn, with 70,000 women at risk of unsafe delivery and 750,000 children unable to attend school.

This should never have to happen to anyone - he…

Understanding Grexit: What is at Stake and What Happens Next

Grexit yes, Grexit no? That is the question. Now I feel fairly confident to predict what will happen next, following Sunday's referendum that led to a resounding 61 to 39 percent win for the "No" - meaning the Greek people overwhelmingly chose "no more austerity". 

There was one crucial move on Monday: would the European Central Bank (ECB) keep the Greek banking system on life support, maintaining emergency liquidity assistance (ELA) funding, yes or no? If it didn't, Greece would immediately collapse and the ECB would get the blame. 

The ECB, in line with Mario Draghi's cautious style, decided not to get the blame and extended ELA, capping it at the level of June 26 (that is €88.6 billion). That  gives breathing space to the Eurozone politicians to take their decisions.

Breathing space but not very much: a total of 48 hours; as I write now, that's more like 24 hours. On Wednesday, the ECB will review its decision after the Eurogroup and Eurosummit have…