Radio Ga-Ga

As a child it puzzled me why my father demanded abrupt silence in the living room when the evening news commenced, while he would simultaneously and often severly be the only one to break that same silence commenting the reporting of events on the television set, similar to how many people experience watching sports matches with intermittent states of excitement, disturbence or plain bordom.

I guess me and my sisters would more closely watch my father than the men in grey suits parling about matters of no influence on our toys and homework.

Occassionally I find myself requiring the same from my children today, and I am equipped with an one click instant recording and search and find favorites button on a multi connectable mobile phone.

Europe had delayed access to progress of television broadcasting due to the interference of world war II and as a young boy my father's family will have circled around a hidden radio to take note of the failed operations of Allied forces to cross the Rhine before winter, leaving millions of people cut off from any supplies whatsoever until the following spring.

My father was born in the intial years of the great depression and I do not think he really had a notion of what was happening in the world at a time, or rather how different the general state of the world was only a couple of years before the then economic collapse.  Why should he?

As a student and eventually a professional my father will have seen Europe in apparent endless reconstruction, re-affirming its place in world politics and economics, even consciously abandoning significant industrial manufacturing to the benefit of less developed countries.  My sisters and me knew no better than the next day being always better than the day before.

He was a strong believer of  economic integration, multilateral cutting of red tape and barriers to free trade and movement of commodities and people.  But, he was simultaneously very against any concession of sovereignty or political union. 

I can imagine my father's sharp irony on the wave of declarations and proposals originating from or intermediated by Brussels in the last few years taking up too much antenna time and filling one hole with the other.  I do not think he misses that, but I do miss him.

The perfect storm

This Sunday was a wonderfully sunny day in Portugal.  For a large part of the population, the ideal day for a getaway into nature.  The kind of day that, should there have been some sort of country wide political election, abstention levels may very well have reached another record.

On this same day, the entire government joined in meeting to commemorate and performance review the completion of the first year of its mandate. 

From day 1 this government has sought - and reasonably succeeded - to portray a business management style of governance, lean and mean, in constant search of demonstrating KPI's to very nervous stakeholders at home and abroad.  Sceptical critics will argue that this government is simply acting as a management committee executing the action plan outlined by bailout creditors a year ago, a plan that was finetuned with troika delegates in about 3 weeks on site.

By means of perspective, the the overall economic structural reform bailout package of Portugal is about 80 % of the potential size of Spain's pre-bailout foreign aided credit line destined at the banking sector only.  The geographic size of Portugal is less than Castilla y Leon, the economy's GDP nearly the same as Catalunya's, the population about equal to the residents and commuters of Madrid and Barcelona together.  Portugal's goverment's fiercest regional struggle is with the individual populist governor of Madeira.  Spain has the Basque country to deal with. 

Maybe more than a decade ago, I heard a reknown Portuguese political commentator in a room filled with foreign businessmen mention that the Portuguese people are very easy to govern.  A fact is that the near absence of protest in contrast to other countries in recent times has been international news.

Within one year this government has looked at more sensitive and structural issues than any other before, drafting packages intended to stimulate employment mobility, competition, swifter justice while simultaneously search for foreign investours and export markets for anything from wind energy to pastry.  This on top of initial measures of salary cuts and tax increases.

Whereas Greece's need for bailout is explained by cheating of Eurozone convergence data, Ireland's by excessive confidence of its banks, for Portugal the exact causes are found in a long and wide variety of overspending and productivity gaps that have been fairly visible for quite some time.

The main issue on this Sunday's agenda will have been the unprojected and possibly unexpected downturn in corporate earnings and private consumption to the extent that the principal KPI regarding the deficit target at FY-end will not be met.

The troika memorandum is based on what a government can do. 

It would appear that the Portuguese government overestimated its role as a mere agent in the country wide needed reforms, or maybe private producers and consumers underestimate their place in this endeavour.  Either perspective is not new, at all.  Any business or action plan, in order to succeed, needs alignment of the key players.  Also not new.

Stormy wheather ahead.

Pandora's oasis

If you travel over the roads in Cyprus, the bright green hockey field of the UK air field base near Limassol stands out like an oasis amongst the general dry landscape.  A few years ago there was talk of the UK withdrawing its airforce in face of a tight national budget.  I wonder if it has been nations budgetting issues that will make the UK decide it better stay put.

Cyprus' search for financial rescue since 2011 has hardly been noticed in world news in the midst of the Egyptian and Greek revolts, Turkish-Israelian diplomatic tensions, not to mention outright wars in Libia and Syria, all within a 700 km radius.

In similar vein, Cyprus' acession to the European Union was overshadowed by the political and private investment celebrations in the west of the simultanous EU entry of some significant former Soviet bloc countries.  How interesting is it that most foreign direct investment into Russia and Russian outword investement into the EU is routing through Cyprus.

Now Cyprus - logically highly exposed to the Greek economy and financial sector - is wondering whether to get it's needed bailout from Russia or the fellow Euro group members and it would seem that the pro's and con's of a Russian no formal questions asked financial guarantee, outfavour the EU's Germany flavoured structural reorganization demands. Consequently Russia will be able to offer a lower interest rate.

 In case any one hasn't noticed, at the end of this month Denmark will pass on the chair and agenda of the EU presidency to Cyprus.

20+20=60 or 10 ?

Agenda 21,  Rio+20, G20, G77, G132.....  As an ordinary (world) citizen I get confused, not very different from when I watch television commercials promising powered up formulas of an already existing product to solve the same old hurdle.  What is exactly new and will the renewed composition work better and if it does why does it only pop up now ?  Should I stop confining the now old version ? 

With the exception of the coordination between the organizers of the now annual event of the 20 largest economies and the once in a decade conference on what has been modernised from environmental green to sustainable development, who have managed to mitigate fuel and travel cost expenditures in troubled times, I miss a practical overlapse of the agendas in both venues.

I believe I am an average motivated recycler with a proudly self installed IKEA set of separation bins which I hope everyone at home employs.  We accept paying a little more for consumables and materials that state they are better for the environment.  We give to the poor but frankly only insofar we come across them.  Gradually I try to transpire the purpose to my children.  That is about it as far as my day-to-day actions for a more sustainable world is concerned.  I cannot help wondering frequently how insignificant these contributions are and them promise myself to do more, one day.

I do however spend a lot time and energy in seeking short and long term effeciency and synergy in my work, for myself and the people I work with, in and out of the office so that everyone can concentrate on their own contributive production specific to their job and interest, within a cultivated logic of sustainability and I truly believe that is where we can and should all make a difference, whether in our business or personal community.

That is what I missed in this week's wordly events.  In one place, world political leaders with their top financial delegates seek to govern and budget for growth, employment, production, financial regulations and yes the word "green" showed up somewhere, while 8000 kms southwards enormous numbers of delegates do not get much further than wording an update of common concerns intranslatable into actions due to a lack of governance and budget.

I get even more confused if the main reason for the absence of any (funding of) actions at Rio+20 is a conflict between the original G77 (developing) countries and the original G7 largest economies as they were measured 20 years ago. 

The G77 is G132 today and the G7 is thus now G20.  A third of G20 members are also part of the founding G77 countries, which basically means that in what concerns world economic growth decisions they are part of the top 20 but when it come to sustainable development they fall back to still being a developing country.

So if it takes 20 years for 7 developing countries to take a seat at the large economy forum, 357 years from now we will have a first and single G132 perfectly integrated world economic sustainable development conference.  I wonder on which planet though.

The ballot is round too (two)

So in the early evening (GMT+0) this Sunday millions of people in Europe and beyond will nervously crowd in front of televisions in order to grasp some first hand insights, followed by close minute-to-minute monitoring of decisive moments for the future of the Euro. 

What's considered the toughest group phase in recent football history has come down to two decisive matches wherein any team can still fall out or get through.

Maybe, in between the first and second half of the matches, some tv stations will flash the first projections of the Greek elections to then revert to the detailed commentary of sports analists on what we are up agains for the next 45 minutes of sports entertainment.

In both the football and the politcal arena, hundreds of millions of €uros are at stake.  Apparently the UEFA can expect to receive about € 50 million in sponsoring and tv broadcasting rights for each of the tournament's 31 matches, most of which will go to national football federations and private clubs for the "borrowing" of players to their national teams.

Quite a few players this Sunday and throughout the tournament, earn per day what only a minority of the Greek population gets paid for an entire year of employment. 

Except for the Irish, the losing teams in the first round will be confronted, upon their return home, with some fierce public debate on the justifiability of expensive show off life styles in view of their social effectiveness.

The Greek team will likely play its last match in the Euro 2012 today.  I wonder which practical arrangements Greece and UEFA managed to make in order to allow the national team to cast their vote.  I wonder if it occurred to players what the effect on abstention levels in their country would be if they would drag a television crew along with them standing in line among commoners to shoot their ballots.  While we are at it, I wonder what the effects for overall appreciation of European political leaders would be if  they would show up in shorts, try shooting a couple of balls, maybe elbow some political opponents, sweat a bit .....

Who knows, may be we will discover some natural talent.  Spartacus did.

Justified laziness ?

At the beginning of this 21st century, through immigration and increased wealth in the Middle and Near East, the then not yet officially troubled western economies came to be more acquainted to the differences practiced by traditional banks from the Islamic world.  The most exquisite aspect western investours identified and are still struggling with in Islamic banking and finance, is the avoidance of charging interest.

As far I understand Sharia law basically looks to allow a return on the provision of monies over time only if there is an investment / ownership participation in property but by no means would the outright surrendering of money allow additional money to be earned off the borrower, i.e. the charging of interest.

The Jewish society for long has had similar prohibitions with the particular difference that the Tanakh does allow interest charges but only to non-Jews.

In Europe, throughout most of the centuries where there was a significant rule of the Roman Catholic church, the doctrine on interest charges is less black and white but both opponents and supporters of interest earnings appear to agree that the collection of interest is generally associated to certain degrees of exploitation, abuse and a thus a cause of conflict between rich and poor.  

Traditionally the christian logic should be that the return for the provision of a loan to those in need would simply be repaid in gratitude.  Within the same line of thinking, the desire of lenders to claim interest would generally be perceived as immoral, unproductive, almost lazy.

This however was Europe in the middle ages.  Today, those who are in need of borrowing are seen by some material lenders as the immoral and unproductive lazy ones. 

I guess it all comes down to the true intentions of the borrower.

the ball is round

Today, while teams of the Germany and Netherlands national football federations warm up for what self proclaimed critics call an early final in the Euro 2012 championship, according to specialists in a totally unrelated field both countries are on the verge of losing their AAA credibility status.

Especially in the traditionally developed countries people generally tend to claim that a football tournament amongst national teams is just another sport event and no connection lies or should be sought between the representing nations historic conflicts. 

Apparently clashes between football fans of Poland and Russia had a historical taste to them and whether we will youtube more acts of violence or not, let there be no doubt that there are millons of chats, jokes, wordplays shifting to more serious and even healthy discussions going around as football teams group on sportsfields surrounded by equally coloured fans.

None of the participating countries in the Euro 2012 are at war with one another.  Then again, all of the participating countries are going through some form of economic recession (technically or not) to the extent it affects their general population.

I believe people - in general - have become wiser over time.  I also share the opinion of many that politicians - in general - are lacking an ability to adjust strategies and team up their nations to score points.

The ball is round and economies are in vicious circles.  Of course there is a connection. 

Too trendy terminology

For whichever reason, in southern European countries it is simply not as common as in many northern European and other countries, among which the United States, to attribute more popular or easy recognisable terminology to law packages or otherwise legal arrangements.   

So when in the eye of the world's press and financial analysists, Spain avoids the term "rescate" as the closest of translations of a what the world has come accustomed to as "bail-out", this may very well be because it is not - legally - exactly that.

Bail is an equally old term, throughout most of history associated with criminal offences and still used as such today by most common law jurisdicitons, pretty much those Anglo-Saxon countries where loud voices now insist on Spain having sollicited a "bail-out" independently of how Spain would want to circumscribe its formal application .  There is no question that most of the world has embraced English as the dominant language in finance today but I sense some exaggeration in the slang being thrown around, not so very different from the evolving manner wherein obnoxious teenagers exchange text messages with one another .... dudes.

The reverse also happens.  When Portugal took note of rating agencies' attibution of near "junk" level, the population revolted by collecting and mailing garbish to the head offices of those agencies, on the simple basis of the insult taken that a country's (financial) status had been downgraded to what was translatable to "lixo", not exactly the definition Michael Milken had in mind for high yield debt issuers.

History, a language, a legal system are components of what make up a society or nation even and  the cross border mix of them is what makes the world such an interesting place, all the more reason to take particular care in their reading. 

anno 2012

So after the financial analists, investors, economists, diplomats and portions of old and new politicians, the time has now come for the historians to take the stage and explain the world's present dispair.

Insofar sovereign countries represent nations I see justice in the wording "tell me where you come from and I'll tell you where you are going".  For leaner and meaner individual cases of private persons or businesses this is not necessarily so, as it should be.

The Economist hit it right on when - about a year ago - it drew a straight comparison between the political (and popular) struggle in Belgium with the "relationship" Germany-Greece.  If in a small developed and relatively young country like Belgium - the federation of Vlaanderen and the federation of Wallonie can hardly find sufficient common grounds to form a government with a plan, how on earth will Germany and Greece ever reach a mutual beneficial implementable understanding, reasonably backed up by their population ?

At the same time, many analists sought to argue that either Greece or Germany would eventually have to abandon the Euro, by the way.  I guess we will find out soon enough.

The fact that we are now digging into more detail of what preceded the financial and then social-economic depression in 1929, shows a common need for a more solid explanation for the present equally common mea culpa state of mind in what we tradtionally refer to as developed countries.

The bad or sad news is that we are getting accustomed to the thought of for how long we will see the effects of the current crisis.  The goods news is that we are getting to the roots of causes.  The question remains as to how we will act upon arriving at some sort of conclusion.