Future 2.0

In my London hotel, the staff were either Romanian or Portuguese—the first group is the butt of ire for Nigel Farage and the United Kingdom Independence Party, or UKIP. The Portuguese staff spoke passable English, the Romanians didn’t.

I tried to secure some English mustard to disguise the appalling concoction which passed for dinner. The young Romanian waitress didn’t know what mustard was—the panic was visible in her eyes.

We entered into negotiations and phoned the chef. He was Romanian. Some time thereafter, a few packets of mustard arrived, and by laying siege to my stew with it, calling in the aerial bombardment with tabasco, and diluting the remains with red wine, the evening brightened a little.

I was sitting with a guy who works in Prince Edward Island, and the conversation largely made up for the food. It struck me as he spoke that PEI, in this context, might as well stand for Poverty, Europe, and Immigration.

And I reflected on a comment Churchill made during the Second World War. Highly appropriate, since in 2015 we honor the great man’s death in 1965 and remember its fiftieth anniversary.

As I (and anyone with half a brain) expected, last Sunday the Greeks did their thing. This week the new government did theirs—the smug camera-ready grin of the Syriza finance minister as he ended the press conference with the Dutch head of the Eurogroup spoke volumes.

Uncle Winston reversing the Victory V in 1941. anyone familiar with British sign language knows he is giving Hitler the bird.

Uncle Winston reversing the Victory V in 1941. anyone familiar with British sign language knows he’s giving Hitler the bird.

Ordinary people across Southern Europe, across a vast political spectrum, can’t help feeling a little warm of heart as the Greeks tell the Troika to fuck off.

And politicians in Europe can’t help feeling a new sense of empowerment, which may mean impending dread, as the EU roller coaster gathers momentum.

You know I worship the gods of non-linearity, and I therefore anticipate the current year with relish and apprehension—I’m just not sure I got that in the right order.

With a degree of selfishness, I’m happy this didn’t happen in Portugal first. It may happen in Spain this year. In a bizarre twist of Obama’s Yes We Can, a grass roots protest movement called Podemos has rocked the Spanish political establishment.

The year of 2015 not only celebrates Churchill, but the European theater will also witness seven general elections: the UK, with their traditional May date, but also Spain, Poland, Denmark, Finland, Portugal, and Estonia.

The ones to watch are Britain and Spain, although Poland is interesting because of Russia and the Ukraine.

The roller coaster ride has just begun to speed up, and although Spain is only scheduled to vote by December of this year, I’ll bet you the pressure for early elections will be substantial.

The shift of power from bankers to politicians, and by that I mean politicians not beholden to banks (oxymoron warning), may be the start of a new way of European thinking. Everything the European Union (read Angela Merkel’s Germany and a couple of others) did to address the Eurozone crisis was stupid, and it shows. Krugman, Stiglitz, and many others have repeatedly said so.

European politicians know full well that the tenuous recovery in parts of Southern Europe, based on indicators such as lower bond yields, is due to two things: a repositioning of US capital investment (and by that I mean Wall Street, not White House) from the higher risk BRICS (two have gone south, which just leaves the icks) to Europe, and Draghi’s position to defend the euro against all comers.

Any shifts in those two factors will sharpen the market’s teeth and throw Southern Europe to the dogs. The first factor depends on the US, which will quite rightly do anything it requires to support its own people, just as Europe should. The second factor depends on Germany.

Germans are never happier than when they have a plan. The nation is fantastic at moving forward together, which can work brilliantly—or it can be a mixed blessing, as the Nazis found at Stalingrad.

Europe is not committed to this particular plan, which is where German disappointment sets in.

In a small country like Portugal, it’s easy to see why: the public sector took a forty percent pay cut, about one third of the restaurants I know went out of business, and small companies in general closed their doors at an unprecedented rate.

Unemployment skyrocketed. Young people packed a bag and headed abroad. Good higher education students did an Erasmus exchange and never returned. Scientific research groups were liquidated. The whole country became an exercise in bean counting, ruled by people who don’t know the difference between finance and economics.

Transacting any goods or services turned into a paperwork nightmare, under the mistaken belief that oversight breeds compliance, without a grasp of the law of diminishing returns. The effective consequence was that more people went around the system, rather than through it. Or left.

In his speech, Churchill told Hitler that Germany had started the war, but it would be for the Allies to say when it would end.

I see a parallel here—Germany started austerity, but its end will be dictated by the countries that suffered it. Luckily, the first step in this was a democratic choice, not a bloody battle—with a bit of luck, it might stay that way.

Atmos Fear and The India Road. Quick links for smartphones.

Atmos Fear and The India Road. Quick links for tablets and smartphones.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: