Friday, 2 December 2011

The United States of Europe

Without the rest of Europe, not even Germany could survive much longer, it is clear that all European countries’ economies depend on each other’s performance.
Since Lehman Brothers’ bankruptcy, Angela Merkel, Germany’s Prime Minister, had to meet other European countries politicians on average every three weeks, which then increased more and more, with further negotiating needs. Forcing European countries to work together is not due to the danger coming from Asia, but, actually even worse, the one coming from inside, within the individual countries’ balance sheets.

The new democratic national objective has become to make the financial markets happy.
The financial markets threaten society as a whole and democracy in Europe. The capital world needs a completely new set of rules. The finance world will have to follow the voters’ will and not the opposite.
The financial transaction tax is by far one of the most hurtful rules that the gambling world of finance should have to oblige to. Both the German voters and the chancellor want the tax to be implemented, but the markets say: “NO”. The discussion represents the way powers are distributed between the people, the elected governments and the financial world.
Now, the German chancellor and the French head of state Nikolas Sarkozy, have joined forces to implement the new tax. However, if the banks don’t comply, even the representatives of Europe’s largest economies remain powerless. The head of the German free democrats Philipp Roessler, this time in his role as a supporter of the financial world, soon posted his threat: the flow of financial transactions would soon be diverting past Germany if the country dares to work against it. Representatives of large banking groups in Frankfurt warned that, if the chancellor is not ready to further follow their instructions and implement the tax anyway, the financial institutions would punish Germany with the movement of employment potential to foreign shores.

So that’s where we stand, with the power of the people, no elected government of a European state can afford to fall out with the financial markets. Only a conjoint government that consists of all Europeans has enough influence to do so, we need a common state of Europeans, because only that is the way to successfully represent the interests of the people of Europe. Only the United States of Europe can regain the upper hand in the ongoing struggle with the financial markets. Hence, the debt issues of all the countries have only one solution that goes vis-a-vis with the demands and the rights of the European people. Almost all democratic countries carry large debts, some of them more, some of them less, but mostly for the same reason: they simply spent more than they earned.

 (Source: RTAmerica)
What goes for taxes and finances goes for most the important areas of politics: the decisive future projects can no longer be achieved on a national level, this includes large scale energy related projects as well as crime or terrorism or even a simple approximation on a country to country basis, they can only be controlled by strong European institutions.
The current European Union, however, is the exact opposite, it’s the master of planning the small things, it decides how to store garden tortures, and how to correctly attach a handle to a door, and it also takes checks that all sheep get registered. Nobody needs a European union only to give generous subsidies to farmers. Subsidising should really be done on a national level. The people of Europe primarily see the European Union as a bureaucratic one way system. Many countries do it like Germany; they don’t send their best representatives to Brussels but rather those that they cannot use themselves. In order to function, the United States of Europe should not be similar to the current European Union in many contexts, or even better in none. 
The United States of Europe (USE) would be a conglomerate of states much like the United States of America, the approximately five hundred million inhabitants of the current European member states would no longer be members of their own state but would all carry a passport of the USE. They would choose a common capital and hopefully decide against Brussels, Germany would be a state, just like California in the USA, some might say that it sounds utopian; others would use the term threatening.  


These feelings run on a similar line to those that French and German people must have felt a few decades ago when Konrad Adenau, Charles De Gaulle and Winston Churchill presented their plans of the future of Europe. In 1946 Churchill was the first to publicly proclaim that “we need a united states of Europe”. For this generation of founding fathers Europe was but a mere vision, a promise, they dreamt of peace after two World Wars, of a Europe without custom control, without borders; a place in which everybody can work where he or she wants. Whereas, during the recent times of Helmut Kohl, the idea of an open border Europe was a scary vision and a dangerous fantasy in the eyes of many Europeans. Everybody pays with the same currency? Absurd! No border controls? How is that supposed to work? Today all of this is reality, almost to be expected.
The mission of the “old” has been accomplished. Europe needs a new goal, a new vision: The United States of Europe. When realizing this vision, the politicians must learn from the mistakes of their predecessors, this time decision-making must be democratic; this time the people, the sovereign of democracy, must be asked first.
Even though the United States of Europe still are long term projects, they can already help us today. The policies of the European governments are, at least, since the beginning of the debt crisis controversial hypocritical and seemingly without orientation. The politicians seem like a group of students on a road trip, without navigation, without knowing where to go. Every cross road is a crisis, the bus stops until everybody has agreed on what to do next. If this group was able to decide on a common goal, the bus would have to stop far less often. With the long-term goal of the United States of Europe, it is also easier to make informed decisions about the introduction of Eurobonds, because of the establishment of criteria: a common European state would obviously also need a European lending fund. Then, the Eurobonds would make sense, before that, they would not. Unfortunately, the leasing country and Europe’s biggest economy, Germany has in Angela Merkel a head of state that finds long-term targets and visions deeply suspicious.  Her proclaimed style of governing is live control and short term planning; she only looks as far as the next cross road. Where this trip is going to, she fails to say. There is no “after the horizon”. If Konrad Adenauer and Helmut Kohl would have had the same attitude we would still stop at every European border and open our trunks for inspection.


We need the United States of Europe not only as a vision; we also need it as a power house in a globalized world. Our European vision of the state our challenges and the rights of our people, our ways of living together, even the shared European values – all that can only be defended as a strong European unit. The new world power, China, has a completely and utterly different imagination of human and civil rights and decisively expands its influence in the world. The old world power, USA in the last gasps of its significance is no less of a challenge to the nations of Europe. It’s very possible that Barack Obama will not be re-elected in November 2012, it is very possible that government will be taken over by republicans such as Texan Rick Perry or Michelle Bachmann. In European eyes, both are catholic Taliban ultra right extremists, compared to which Ronald Reagan looks like a dreamy eyed hippy. 

The United states of Europe do not have to hide from both self-proclaimed world powers, even less in economic terms. The GDP of the European Union lies above the GDP of the USA and far ahead of China’s GDP. Europe is the economic powerhouse number one and in the near future nobody will surpass it. If in the far future, the Chinese head of government comes to visit the head of the United States of Europe, our representative will not have to jump in excitement like a five year old on Christmas morning, we will not be a strategic partner; we will be a world power.

Monday, 21 November 2011

Berlusconi's Resignation

(Source: EU-Russia Centre)

After such a long time in government Berlusconi officially resigns.
Silvio is a very clever entrepreneur that had a life journey we would all dream of. Studied law, was a diligent student, famous for selling his notes to fellow students, became the richest man in Italy and its Prime Minister.
What a great success story!
After a long left wing control over Italy, Berlusconi came to power when Italy needed a right wing change the most. Well, although this change lasted a bit longer than usual, now the question arising is, was it really a change? Did Berlusconi use the amount of power he achieved correctly?
Italy really believed in him, an entire country is now disappointed of his performance.
However, although he resigned he still seems to be involved in the country’s politics, as he still is engaged representing his party “The people of freedom”, it will be interesting to witness his next strategic moves. Apart from Berlusconi, who has seemed to attract a lot of the media’s attention, it can be stated that Italy’s economics are now testing whether Europe will either die or survive. Will the Euro currency achieve credibility again? Italy’s banks are becoming vulnerable, as the perception of the government’s insolvency comes closer. European politicians, in this case, are really under the global spotlight, observing whether they are capable of dealing with their debts and bring economic reform together. If our political class is not able to, perhaps we are entering a new “technocrat” era, when more and more unpopular people with “technical skills” run countries instead of long lasting charismatic leaders.  
The Italian Prime Minister represented the "Italian dream", he was the man every Italian would have liked to be: powerful, rich and surrounded by beautiful women. However this grand character also had some major weaknesses, such as his famous parties and passion for beautiful women, which in some occasions went a little too far. Sometimes I would think that there is nothing wrong for the Prime Minister to enjoy a very active social life; I found that we should all be allowed a private life as well. 
Having said that, Silvio's behaviour and especially political performance is no longer acceptable. Apart from this, it is very disturbing that a man that was so popular and had all the power he needed to make Italy a modern, competitive and innovative country, simply did not do so. 
Here below is the end of the "Italian dream" or perhaps "Italian nightmare": 
(BBC News Business)
So, what is Italy's problem? Why are politicians continuing to behave like they are not at the people's service? They seem to feel they are special and untouchable. 

Well, there is definitely enough room for improvement, who will take it on? It will have to be someone who has the charisma like Berlusconi to be recognized and become popular, but possibly with more determination to carry out the structural changes Italy really needs. Not an easy task.
Perhaps it is simply italian culture preventing real improvement, as people seem to be very good at protesting for change, but maybe not so good at facing what change may bring. Change also means big sacrifice and acting outside of one's comfort zone, which may not be well perceived by the italian population.
Although Italy has a very complicated territorial geography, it has the potential to become one of europe's greatest assets.
When will real improvement happen?
We will have to wait and see.

Thursday, 13 October 2011

Fuel Poverty? Let WIND Blow it Off!

(BBC News Business)

Environmental Sustainability is often seen as a cost rather than revenue, while it actually allows countries to be independent and energetically self-sufficient. In the previous post, there is also a connection to copper recycling, which is practiced, but could be improved even more.  

Let’s say a proposed Wind-Farm is to supply the entire electric power needs of a city, it is important to stress that only because it is an environmentally sustainable project, this will not imply that the inhabitants can consume more energy than usual. A city wastes so much energy in transportation, lighting, heating, air conditioning, home energy, electrical generation and consumables that the potential for savings is still and should continue to be enormous. Note that households use up to 30% of global energy production, and emit 20% of its CO2 emissions.
In order to achieve a greener city, a Wind-Farm is not the only answer; this is why the Green Deal for household energy savings announced by the British government last year is very practical. The scheme allows licensed companies to offer customers credit at no initial cost toward work to make their homes or workplaces more energy-efficient. The loan is paid back in instalments added to the customer's (reduced) energy bill. The logic is simple: since households will not spend for double-glazing or insulation for the environment, they need to be stimulated into efficiency savings with a promise of free cash.
(Stockopedia News)

The Environmental Sustainability industry sector has given birth to an army of entrepreneurs and firms, looking to save energy and make money while doing it. In this way, not only it created a lot of new jobs, but, through its development, it made sustainability to be seen as a valuable investment and source of revenue as well. A recent study for Renewable UK, a trade body, registers that between 2007-08 and 2009-10, jobs in wind-farm construction nearly doubled, to 9,200. Siemens, a German conglomerate, announced plans to spend £80m on a wind-turbine factory in Hull, a city in Yorkshire, creating 700 jobs directly and 500 more in related businesses. Wind-Energy thereby seems to be profitable enough to have the potential to give a city a“new era of prosperity”.
This relatively new industry’s success is also due to the world’s increased urbanization, which increases pollution and therefore the need for sustainable energy supply solutions. This has also been confirmed by the United Nations, which predicts that by 2030, 60 % of the world’s population will live in cities. For example, 40 % of China’s population already lives in urban centers, according to Stanley Yip, director of planning and development for Arup China, an urban development firm.
As a result, growth and survival of such cities might mean building them on the basis of access to renewable energy resources, such as Wind-Farms.
“The chart below shows the five countries that make the greatest use of wind energy. Over the past decade, China's installed wind capacity has grown exponentially, from just 0.3GW in 2000 to 42.3GW last year, and now accounts for 22% of the world’s total wind power capacity. In 2010 it installed more turbines than America (The Economist, 2011).”

(The Economist, 2011)

The above graph is very encouraging, as it shows a very positive trend in the use of wind energy around the world. In Europe, Denmark receives over 20% of its electricity from wind energy, and in 2009, Germany received 7% of its electricity from the wind. Spain, which received 14.5% of its electricity from wind in 2009, has had periods when wind energy provided over 40% of its electricity.
These examples prove that wind power can be a valuable part of a country’s or city’s energy supply and that such installations are reliable and can provide energy without interruption.
Since changes in wind energy output are not immediate, it typically takes over an hour for even a rapid change in wind speeds to shut down a large amount of wind generation, which is a significant benefit. In addition, wind forecasting tools that warn system operators of upcoming wind output variations are becoming widely used and better integrated into system operations.
Therefore, a country like the UK should be considering making a very constructive environmentally sustainable long-term investment for total energy independency
So, if this trend continues we’re going to have to just wrap up and wear jumpers instead of turning the heating on. Get ready!

Wednesday, 28 September 2011

Have we reached Peak Copper?

Copper is one of the most important metals in history.
We may not realize how many uses copper has and in how many industries it is needed. Being malleable and a great heat absorbing metal, copper is perfect for electrical cables, computers, electrical switches, microwaves, refrigerators, air conditioning systems and vacuums; it is also used to pipe water supplies and much more.
(ETF Trends)

Although Western economies are undergoing a period of crisis and therefore less growth and production, there is a big demand for copper from developing countries wiring their territory with cables and manufacturing technology products, such as China. In the last decade, prices of copper have kept rising, as The Economist shows us below. 
(The Economist, 2011)

The price of copper rose so much that there have been reports of copper being stolen from rooftops in London! If copper’s demand is to rise by more than 40% by 2020 and its mining has already become more and more expensive, when will the Peak Copper be? Have we reached it early this year? Apparently not, as prices fell back down recently.
Perhaps, alternatives to this metal will start popping out when prices will reach an even higher stand. It is definitely a business challenge now and for the future to find such a good conductor like copper to build our future cars, highly demanded mobile phones and gadgets.    
We are talking about an essential metal which is also very difficult to mine: scientists please find a substitute as soon as possible! Ok, plumbers may have started using plastic tubes, but there still a lot to be done to find a suitable alternative. Also because, plastic should no longer be seen as the best alternative, as petrol supply and prices are not joking either. However, copper recycling is very encouraging, as about 80% of copper ever mined on earth is still in use today.  
Therefore, as we all surprisingly own copper in some way or another, let’s keep it tight!