European banks survive stress test? Aaaah!
The stress tests of 91 European banks in 20 EU countries indicates "the banks are doing well". Good news, no doubt.
At least, the results sound a lot better then some thought. With some relief, media across Europe announced "only seven failed". Yet most European print media mainly showed doubt about the credibility of the exercise. A similar test last year on 19 banks int the US gave a red card to 10 American colleagues. But the check up was not the same, and this one was widely criticized as being too weak.
If you want to check for a blood ilness, it is not enough to look into the throat of a patient and ask him to say 'AAA'. Clearly, the test was designed to show the world that a full-blown euro crisis would not topple the local banks, calm spirits and regain confidence of investors. A charm offensive, in short. Too weak, too little, etc.
Maybe so. But still, from an image point of view, this is a good move, bringing good news. At least it is news that is not built on lies, as was the case in the Greec drama the world witnessed not so long ago. Combined with the spectacular jump of the German business sentiment in July and the UK growing faster than expected, the mood is up, while the US is showing signs of slowing and the housing market is still suffering. There are still bizarre 'for sale' signs on ebay for both common and spectacular houses in the US. So is it 'Sweet Europe, Sour America?', as Reuters asks?
One thing is clear, you cannot build your house on lies, debts and mortgages. Hard work, honesty and a tight reign on your home economics are the only way forward, for home owners, banks and governments alike. Then all can say AAAh with confidence.
Is Europe’s crisis over?
So… is the crisis in Europe over?
Rupert Murdoch made a new bold move that would point in that direction. His News Corp. offers to pay $11.5 billion for the remaining shares of British broadcaster BSkyB. Murdoch as the herald of a sunny new day over the old continent? Michael Corkery at the WSJ seems to imply this in his article "is the Crisis in Europe Over? Just Ask Rupert Murdoch". He reads the big bid as the Aussy tycoon's way of betting that the problems in Europe aren’t so bad as they seem after all. Or on a more sober note, at least it indicates Murdoch believes the crisis will not reduce the Briton's hunger for pay TV consumption, making the bid on one of the largest satellite broadcasters in England and Ireland logical.
The Financial Times calls the move Mr Murdoch’s most significant strategic manoeuvre in years. It quotes a financier with knowledge of the Murdoch move: "By investing in a pay-television business, he is derisking the whole News Corp portfolio away from advertising-dependent businesses”. The FT adds conventional wisdom would suggest to spend the cash in geographic growth markets such as India and Brazil, or in sub-sectors that are riding the growth in internet advertising, education spending or video games sales. Instead, Mr Murdoch is returning to the slow-growing UK market.
So, is Murdoch betting on Europe's recovery? Let's not get our hopes up to high. Theodora Zemek, head of global fixed income at AXA Investment Managers, says in The Telegraph about he Eurozone that having over-riding legal powers "is a precondition for the system to work but it doesn't exist in Europe and the bond markets are starting to figure this out. We are looking at a noble experiment on the brink of failure." The French analysts see it possible that the eurozone would break in half or disintegrate.
Let democracy be our currency! The danger exists that economical problems would destroy the reality of democratic freedom in Europe as a whole and in specific weakened countries, as Barrosso recently warned. Let us all agree that nationalism, selfishness and mistrust are not an option, as says Tahar ben Jelloun on Presseurope:
Regardless of the outcome of this crisis, Europe is no longer a utopia, or a virtual place, but a real entity that is still in the process of construction, which still needs our determined support and good will. Europe is a blessing. The idea that several countries should join together to form a union based on geography, history and on the values of democracy and freedom remains the positive legacy of the Second World War. But does anyone spare a thought for the early years of the union that grew from seven to 27 countries?
Is the Europe-China love affair in trouble?
Is the love affair between China and Europe in trouble?
At the EU pavilion in Shanghai, the sun is shining on the alliance between the EU and the Middle Kingdom. The European Union shares a pavilion with Belgium at the 2010 World Expo. Under the “Movement and Interaction” theme, the presence is positive and dynamic. After Europe Day on May 9, next Sunday the Belgian Day is on the programme. Prince Filip of Belgium will pay a visit to the event.
But will high hopes, positive thinking and royal visits be enough to maintain the marriage between Europe and China?
What can be done? On foreignpolicy.com Jonathan Holslag of the Brussels Institute of Contemporary China Studies wrote that "Europe cannot back up its soft power with hard economic capabilities" in the green debate. The European Commission must better pool research projects scattered through Europe and persuade member states to do more.
The same applies to diplomacy. Europe should speak in one voice and with one mouth. With a clear position and insight in the logic and culture of the Chinese decision makers. The gap is real. And unity is the only answer. It is a necessity, in facing the growing Chinese dragon. Then the love between China and Europe can pick up and become truly passionate.
Germany more Deutschland, less Europe?
Germany is becoming more Deutschland and less Europe again, it seems.
Angela Merkel is facing all kinds of criticism in her quest to keep the European family together and solvent. The Chancellor faces a tough agenda: tackle the financial crisis, prevent a coalition collaps and replace the German president. The price she pays for her European efforts is high. Loss of home voters and sliding confidence in her local market go together with growing criticism from other European countries on Berlin.
And the German captain does not like it. The Guardian heads with "Germany signals end of Love Affair". Ian Traynor writes the change in Berlin is a tectonic shift in the EU– from pushing Europe forward to balking at the sacrifices Germany has to make. France and Germany are not the united front they appeared to be. Merkel is said to imitate Sarkozy mockingly, while the French Chef is said to boast to his team how he has bested the German Chancellor.
Merkel yesterday went to visit the German soccer team, in preparation for the world cup. To show them support of course. No doubt at the same time to signal she still is first German and then European. Because this is her struggle too. She needs to balance the interest of her market as the central economic power in Europe with that of another power, the EU. And she needs to keep credibility high at home while doing so. Ian Traynor has a point when he says better communications offer the solution to that problem. The message should be loud and clear for all Germans that Europe is good for them. Angela should stress that Germany, as Europe's biggest exporter, benefits the most from a single and strong Europe. But the opposition has a field day. It is easier in politics to criticise 'the outside world' and preach nationalism, than to see that a bigger union of powers, even with major issues to solve, is the best choice.
"In the history of the European Union, " said Charles Grant, director of the Centre for European Reform thinktank in The Guardian, "I've never seen Germany so isolated before." This is not a good state of affairs. Germany should never be an outsider of debate and negociations in Europe. The logic for the German market also applies for Europe as a whole: Germany is both Deutschland and Europe, supporting one is supporting the other.
Belgium, new promotion as the Heart of Europe
Promoting a country for investors is a complex challenge.
The business logic must be sound. It has to dazzle the commercial minds. You have to woe the number crunchers and financial managers. The human resources angle needs to be covered fully and even transport and logistics must be checked.
But, the personal side in telling the story will tip you over. What really makes the difference is to bring across the emotion of belonging, pride and excitement. The music carries you; the faces of the people looking at you make you feel part of the story. Their quotes are like signed guarantee statements. And then you will say: "This is where I want to live and raise a family. Where I want to let my kids go to school. Where I will be happy." So every image and every line of copy writing must lead to that conclusion.
Promoting a country is an art. Of course it is offers cliches. But they are part of what sells, at least if they are based on facts. Just sorry they forgot to mention Antwerp is the second-biggest harbor in Europe. Nevertheless, heads off to the creators of this promotional film. Or as the Flemish would say in Belgium; "Chapeau!"
Comment reproduced with permission of www.firstbase.be
Euro muscles from Brussels
Europe reached agreement to show some Euro Muscles from Brussels
With a rescue package close to $1 trillion, the European Union confirms its commitment and strenght to hold the Euro fort. It has been under attack for several months now and it was high time to put on a show of force. 'E.U. details $957 Billion Rescue Package', the NY Times headlines. The speculation armies were attacking the gates of Fort Europe and reinforcements seem to have arrived just in time. The finance ministers from the European Union were under high pressure to come up with a strong answer, before the opening of the financial markets in Asia. And they showed that muscles from Brussels are firm in defense of the Euro currency.
High Noon
It was high time to show the financial world the Euro was not the best bet for speculators to mingle with. Hesitation and half action, soothing words without direct and firm steps had weakened the credibility of the Euro. The Greek drama, packed with emotion, mistrust, deceit, rioting and now even death, and the spreading crisis virus to other European markets had to be addressed. When the time frame is defined, suddenly things can come to a conclusion. It is a rule that debate and negotiations expand with the time allotted for reaching a decision. When you know time is running out, things often fall into place. In the early morning hours, a decision was reached. And the markets like it.
Euro response… muscles enough in the long term?
The deal provides $560 billion in new loans and $76 billion under an existing lending program, with the IMF adding $321 billion.
Olli Rehn, the European commissioner for monetary policy, was firm “We shall defend the euro whatever it takes”.
David Marsh, the author of “The Euro,” a book on the history of monetary union“ still shows some doubts on the rocky road to recovery:
"The fact that they are worried is clear. But I don’t think that there is enough commitment or economic firepower in Germany to provide the massive loan guarantees to satisfy the markets.”
At least the first signs in the market are positive, the trend is up. The psychological boost for the markets seems to work on the short term. Now the economies and the recovery plans themselves have to drive down the point. Let us hope the fort holds!
EU so much more than Euro and Finance
The Euro dominates the news and keeps setting the agenda op the European Commission
The Euro and the fire in the financial markets dominate the news. IMF fears debt crisis 'contagion', heads Al Jazeera. Greece's financial woes spreading through Europe, the Global and mail runs. Athens domino effect hits Lisbon, headlines presseurop. Et cetera et cetera. The attention is logical and justified. When a house is on fire, the citizens come together to fight the flames. Even when the fire might be the fault of people living in that house, the others rush in to save what can be saved. As happens there, Europe tries to form a chain and stop the smoke,the heat and the devastation. And yes, valuable time was lost, the wind is rising, the barn where the "Pigs" live (an inexcusable term, I must say) is now in danger too.
EU is so much more than Euro and Finance
So "Of course it's the economy, stupid", as cowboy Bill would say. But Europe is so much more than the Euro and Finance. And regretfully the media often seem to miss out on those wonderful stories.
Breughel was right: the work continues
As in Breughel's fall of Icarus, the farmer keeps on plowing, the work needs to be done. Amazing how people seem to forget that. There are so many excellent initiatives the European Commission undertakes, so much good work done is done. But in in the shadows of the flames. The story is where the crisis is. Will Icarus fall or will he land safely? Yet Breughel was right. In the field, the workers labour on. The farmer is in the center of the picture, not Icarus. A visit to the European press room can be refreshing and positive to see the up side of Europe at work. Amazing to see how much Europe is doing. These are the messages from one day: "Cooperation to help refugees", "Support to European inventors", "Clean energy efficient vehicles", "Healthy workplaces", "Innovation awards", "Collaboration with Japan", "Relations with the Caucasus", "More efficient institutions and administration", … .
The list of actions is impressive, so let's not throw out the baby with the bathwater, even to put out a fire.
EU recruitment ‘better faster stronger’
The European Commission says it is bringing EU recruitment in line with best practice in public administration worldwide.
The outdated procedures are boosted with a "Better, faster, stronger" theme, launched on Thursday by EPSO, the European Personnel Selection Office (EPSO). Are they secret Daft Punk fans?
In the new format, candidates who pass the initial computer-based selection tests – verbal, numerical and situational reasoning – will spend a day at an assessment center in Brussels.The assessment will be "more focused, professionalized – and there will be more use of human resources personnel,".
In a press release, Maroš Šefčovič, Commission Vice-President for Inter-Institutional Relations and Administration, explains.
"In an increasingly competitive jobs market, the European institutions have to be able to attract a diverse range of top quality applicants. It's also important that we hang on to these people, which we will only do if they have the prospect of finding an attractive post without undue delay. The new system is based on best practice across the public sector. It will provide the EU institutions with the right people at the right time, while remaining true to the principles of fair and open competition."
The BBC reports the exams will be more skills-based, rather than knowledge-based. Yet the tests may not be enough to attract more candidates from the UK. 5.2% of current staff is from the UK, while Germany reaches 8.3%, France 10.2% and Italy 10.3%.
Belgium, the host country, provides 19.8% of the staff. Belgium is arguably over-represented right across the grades.
A recent study by the Paris-based Robert Schuman Foundation, a think-tank, shows that Belgium also tops the list with 16.3% of EU staff in total, with France second, with 10.8%, and Italy third with 9.8%. and the UK only reaching 5.1%.
Good news for the candidates is also that the waiting period before you know if you're 'in' will be shortened to a maximum of one year. And all is done in a fresh web 2.0 bath, including twitter and an up to date web environment the EU deserves!
EU economy needs smart regulation and supervision, Barnier says
Michel Barnier, the new EU Commissioner for Internal Market and Services gave his medication to cure the effects of the "Great leap backwards" in the EU economy. He spoke at a dinner yesterday hosted by the British Bankers' Association in London.
The worst performance in GDP growth in Europe since the 1930's and 23 million unemployed require tough, smart measures. Restoring confidence in the markets is a must to achieve growth . And to do that, Barnier has ambitious plans for the relaunch of the Internal Market.
He has set himself 3 priorities for financial institutions:
1. better supervision (with a single rule book and real information sharing and trust)
2. better capitalization (more and better capital)
3. more responsibility (better corporate governance, competent directors, strong and independent risk management).
Barnier also stressed the need for global convergence and a global level playing field. With the EU as a leader by example on the G20 roadmap, yet without free riders.
Euro, fairy tale with a happy end?
Will Europe truly come to the rescue of Greece? Germany and France have different views on the role Europe should play, making a clear reply difficult. This difference will continue to dominate every discussion in European financial policy a Charlemagne article in The Economist explains.
The euro was not blessed by political and monetary unity at birth (as was the case with the US dollar). This curse of the bad fairy has come to haunt the blessed princess. The euro pricked her finger on a spindle called Greece, but how the sleeping beauty will come back to life and happiness remains uncertain.
Optimists say France and Germany will play their part as 'good fairies'; pessimists think the euro-curse will hold and the currency will break up. The article says both camps have a "too tidy" narrative. The key to the problem is in the concept of monetary unity. Germany wanted a "European Bundesbank", an independent watchdog to fight inflation, while France wanted a central euro-bank that would be “counterbalanced” by elected politicians, who could tell them when to put growth and jobs ahead of price stability or fussing about deficits. One goal was common to all: end exchange-rate risks within the internal market, including competitive devaluations.
France and Germany still disagree on the next step in rescuing Greece. Fiscal rigour is what German politicians advocate, while their French colleagues hope for more intervention. Jean-Pisani Ferry, director of the Bruegel think-tank says It is a fantasy a fiscal union will slosh out money in the euro-zone to iron out the varying economic development.
A story to be continued… and no doubt followed by a series of other similar tales of the unexpected, in the rescue of Spain, Portugal etc. Not to mention thrillers like the rescue of the automotive industry (or not) and other economical pillars of the European industry.