Posts Tagged "Economy"

Speaking up for Languages at Labour Conference 2011

Conference,

Today, Europe celebrates the 10th Annual European Day of Languages, a European Union initiative to appreciate linguistic diversity in Europe and promote language learning.

You might think it a bit of an anorak subject, and perhaps it is, but as a trainee interpreter of French and Spanish, it’s my anorak subject.

Britain cannot afford to lose languages, and it cannot afford to rely on the popular myth that everybody speaks English.

Ironically, it is only because English is widely spoken that we have a responsibility to promote, learn and use foreign languages.

As the party of openness and diversity, this should be a core Labour principle in foreign policy and in British diplomacy.

In the European Union, if a meeting cannot find any available English interpreters, that meeting is cancelled. Delaying the exchange of ideas, slowing down government, and hindering reform.

That’s bad for Europe, and bad for Britain.

In Brussels, Britain is often underrepresented because of a lack of language professionals.

In Business, Britain loses out to foreign enterprise because of a lack of language professionals. That means Labour loses the job creation and economic growth that goes with it.

English may be the lingua franca in many countries, but companies have to speak to customers in their own language.

So the business that do well are the business that go global.

As globalisation continues, languages are an obviously vital tool. Forging friendships, breaking barriers and sealing deals.

The Labour Party must be open to Europe.

Britain in the world needs languages, which is why, on the 10th European Day of Languages, Labour must not let Britain get tongue-tied or lost in translation, but be ready to promote, encourage and develop languages professionals.

Thank you.

The Last Lap: Seven hurdles for Sarkozy

This week marks La Rentrée, the official end of the summer and start of the political year.

This political year in particular will be important. With the Presidential elections in mid 2012, Nicolas Sarkozy is coming to the end of his first mandate, and at present his second one is by no means a fait accompli.

So to set the agenda for the coming political year, here are the 10 main hurdles Sarkozy needs to overcome as we enter the last lap of his Presidency.

1. The Reshuffle

Nicolas Sarkozy’s intentions to replace his Prime Minister have been announced several times, though Francois Fillon still remains in Matignon.

Fillon has proven more difficult to get rid of than Sarkozy and his friends would like. The Prime Minister’s personal approval ratings have shown that he’s one of the most popular right-wing figures in France and notably more so than the President. As a figure of responsibility, stability and sensibility within the UMP party, he has often had to play the fireman after Sarkozy’s incendiary comments.

Nevertheless, the reshuffle will be the last chance Sarkozy has to appoint another Prime Minister and organise the team that will take him into the elections.

2. L’affaire Woerth that won’t go away

Like the MPs’ expenses scandal, L’affaire Woerth was a scandal that could not have come at a worse time. Just in time for the summer, it was the perfect gift to any journalist who needed to fill a front page or an editorial. Also like MPs’ Expenses, it was more of a political scandal than a judicial one as the rules were not technically broken but certainly had their structural integrity tested.

As a relatively complex financial scandal, details and speculation kept the story going. What is particularly damaging for Sarkozy is that because of its complexity, few will understand but all will disapprove. Segolene Royal called the government corrupt on prime-time news, which was then backed up by a particularly worrying poll for the President.

3. A poor economic recovery

Unemployment has always been a problem in France (several theories why) and now it’s higher than ever at around 9.5%. This contributes to a massive deficit of 8%, which means that the government won’t be able to offer any pre-election giveaways.

A piecemeal return to growth, which is unlikely to exceed 1.4% in 2010 (compare it to the 3% expected from Germany), won’t help either of these two problems.

4. A Socialist Revival

After an extraordinary showing in March 2009 in the Regional Elections and a surprising show of unity during their party conference in La Rochelle, the media narrative of the Socialist Party has turned from a Party in terminal decline to a Party revived and ready to win the presidency for the second time in history… as long as they can find a suitable candidate.

5. Pension Reform

Sarkozy’s plans to raise the legal retirement age from 65 to 67 have put him on the wrong side of the populist argument. On September the 7th, he was faced with a nationwide strike.

I can’t explain in words how serious the situation in France is at the moment, but let me try and illustrate how important the issue is. Nice, a very rich and right-wing city in the most pro-Sarkozy department in the country, saw between 20,000 and 30,000 people take to the streets. Multiply that from Lille to Toulouse, and you might get the picture.

6. Disquiet in the ranks

If Fillon caused Sarkozy some trouble by trying to put out the fire, the rest of the UMP grandees have been lighting some more matches. Three of Chirac’s Prime Ministers, Juppé, de Villepin and Raffarin have all been ready to criticise various aspects of governmental policy. It looks like the centrists in the party will not be writing Sarkozy a blank cheque any longer.

7. The Roma and the Republic

This deserves a longer post, but Sarkozy has assaulted Marianne (the female personification of the French Republic) in his forcible deportation of the Roma. Even the Pope, the most reactionary man on the planet, has condemned the policy. Even the European Parliament, with its right-wing majority, condemned the policy in a single afternoon.

Let’s hope Sarkozy had a nice holiday, because he’s got his work cut out for him this year.

Zapatero buys time thanks to one crucial vote

I’m typing this from a hostel in Lisbon, so allow me to be brief.

As I mentioned in my previous post on the Spanish economy, the President of the Government Zapatero canceled all his appointments, meetings and visits in order to present himself to the Congress of Deputies (the Parliament).

Congress met specifically to debate the Government’s proposals to reduce the deficit, which include a cut of 1.5% in two years. A defeat could have meant the end of the government.

It passed by one vote.

Zapatero’s centre-left party, the PSOE, won all of their 169 “yes” votes against 168. It is worth noting that this was probably the most important legislative vote of the Parliament and not a single deputy (MP) was missing. Several smaller parties abstained (13 votes).

Rajoy, leader of the Spanish conservatives (el Partido Popular) was typically in character, saying that the plans were “improvised and injust” adding “Yes to reducing the deficit, but not like this.” as the plans include a cut of 5% to public sector salaries and pensions.

President Zapatero was able to leave the chamber with a smile, then, after a very tense morning. I would probably compare it to the Tuition Fees Vote that passed with a majority of 5 in the UK.

He won, and so the Spanish President has been able to buy some much needed time.

Debt and indebtedness: The Spanish Economy

While the new Lib Tory (others prefer to call it Con Dem) government settles in and blames the outgoing government with ambiguous comparisons to Greece, I think I should draw attention to Spain.

Over the last few months living in Madrid, I’ve been in the thick of Spanish economic news and though I’m not an economist, I think I’ve managed to pick up a few things from my ex-girlfriend, who was.

Starting with the differences between Greece and Spain, it’s important to note that Greece was forging its figures for years and years acting totally recklessly. Spain, to the contrary, has had a fiscally responsible government since 2004. Some would contest this with the power of hindsight, but for a long time Europe’s 4th economy (I was also shocked to learn that)  was doing very well. It had comparatively low debt and was even running budget surpluses a few years ago, as you can see here.

The banking sector survived unscathed, in contrast to Britain’s bail-out, but problem in Spain has essentially been an over-reliance on the housing bubble, which burst violently, combined with spiralling unemployment reaching nearly 20%.

I’ve seen this unemployment for myself. There are 200,000 inhabitants of my city (Alcalá de Henares) and every morning as I leave the house I used to see a queue of a hundred or so people. Initially surprised that the Spanish could queue, I presumed bemusedly that it was to the bank at the end of the street. In fact, I discovered the queue turns around the corner at the bank, last another hundred years before veering into the jobcentre.

Spain has thus seen a sharp increase of pressure on the state, and has seen borrowing surge beyond 10% of GDP, seeing the sharpest deterioration of government debt compared to relatively low pre-crisis levels.

The President of the Government of Spain (aka Prime Minister) Zapatero, chairing the EU council, has seen the Commission set particularly ambitious consolidation targets for Spain due to the very high starting points for borrowing there.

Zapatero has shown considerable effort to advance, having already announcing a VAT hike for this year. Today he cancelled a trip to Brazil so he could help to push through some Labour Reform personally. The conservative party (El Partido Popular) has been in the town square all week, and I have collected no fewer than three “no VAT increase” leaflets. I duly explain my three points; I am foreign. I am socialist. I am in favour of the hike. The VAT hike for this year, from 16% to 18%, (and there could be the case for a further increase after that) might do less damage than increasing income taxes. The Populares did not share my point of view.

As Spain will is showing very slow signs of recovery I would not be surprised to see more tax hikes in the near future to offset spending. The low rates of income tax might be a good place to start.

There is also some room to reduce government spending given its high share in GDP. Hopefully if the necessary spending cuts can be achieved such an increase in income tax could either be avoided or at least softened significantly. However, the consumer sector here is so fragile, I am inclined to be sceptical.

In any case, I’m off on a trip to Lisbon tomorrow, then I’m leaving Spain for good on June 3rd. Hope you like the blog relaunch!

The creation of the European Monetary Fund

The problems in Greece are forcing the creation of the European Union’s own instrument to tackle financial crises in the euro zone.

Proposals have surfaced from the European Commission which builds on suggestions from France and Germany to create a European Monetary Fund, in order to reinforce economic coordination and provide help to countries in difficulty.

The Monetary and Economic spokesman said that the European Commission was ready to create such an organisation, though added that it would require support from all euro zone member states.

The proposals have thus been given Brussels’ backing, having been launched by the German finance minister in consultation with France.

The aim is to secure the stability of the euro zone, which requires an institution like the International Monetary Fund, and other similarly interventionist powers, though the Commissioner stated that any “EMF” would still act under strict conditions and would be no less demanding than those of the IMF.

The project has also received support from German Chancellor Angela Merkel as a way to combat the crisis in Greece despite the fact she deliberately avoided mentioning it, and warned that the project would require an amendment to the Treaty of Lisbon. She added that it would be necessary to decide first who and how the fund will be paid for, as well as its relationship with the European Commission and to discuss the sanctions imposed on countries that break the conditions of the Growth and Stability Pact.

However the EMF has already come under strict criticism from the Chief Economist of the European Central Bank, Jurgen Stark, who claimed that “such a fund would undermine the success of the Euro and the European Union”. The ECB president, Jean-Claude Trichet, was equally hostile to the idea intervention of the IMF in Greece.

It is worth noting that a soft of EMF was originally proposed by the President of the Party of European Socialists. The project was already a part of their initial crisis resolution package, but the Commission’s attitude has been too centred on the monetary aspect instead of looking for ways to promote growth and employment while combating financial speculators.

Tory PPC: "It is about time we had a recession"

It is refreshing to be able to write something about Jacob Rees-Mogg which isn’t describing some idiotic gaffe.

Previously, he’s plagiarised the Sun, misappropriated council resources and claimed his house adjacent to Hyde Park makes him a local Somerset bloke. (See here for the list)

This time though, it’s worth exposing a more malicious side to who we usually dismiss as a comedy Tory.

BBC News ran a story at the beginning of the month (here), and a follow up story last week (here), on the price of gold, which explained that:

The precious metal reached a record high of more than $1,065 an ounce on Tuesday morning.

This is incredibly good news for the Tory PPC for North-East Somerset. In an interview with MoneyWeek, he said:

“The notes you take out of your pocket are worthless. Gold isn’t, though: it has rarity and it’s a store of value.”

Then he was asked if he had any specific tips, and told his chums:

Yes: buy gold. I keep a gold stock in all of my portfolios and think that they are still offering attractive value.

Looks like Rees-Mogg is (even further) in the money!

McRees-Mogg: Hooray for all my gold!

The most telling thing you will ever read about Jacob Rees-Mogg, more than all the gaffe, bloopers and mistakes he will ever make, is this response:

The strongest argument for gloom in the near future is that we have had 12 years of continuous growth and that has never happened before, so it is about time we had a recession.

Did you catch that? Read it again.

We need a recession because gold keeps its value, and I’ve got loads of it!

It says a lot about the Tory Party and how much they have / haven’t changed that they’re willing to let this man anywhere near Parliament.

You can see him now, with his notional constituents, talking about how he’s just like them trying to do everything he can in tough economic times, but really thinking about his lovely stacks of increasingly valuable gold, thanks to a recession he’d been waiting 12 years for.