martedì 23 ottobre 2012

When will we have a European rating agency?

What caused Europe crisis derives from multiple factors. It is not only a matter of sovereign debt crisis. Behind the worst crisis since 1929 there is more than this. On the day when China and Russia launch their own rating agency - the Universal Credit Rating Group - my mind goes back to when the American ones used to downgrade our continent economy.
It all started with Greece in 2009, when rumors that Athens wasn't able to pay its debts led to default fears. Ireland, Portugal and Spain together with Greece soon became the so called PIGS. An acronym very useful when the three American rating agencies monopoly used to describe the reasons behind the downgrading of the above mentioned countries.

Who's behind the rating agencies is well-known. Rating agencies have been making false statements and analyses concerning banks on the edge of failure, as in the Lehman Brothers case. One of the greatest financial scandals ever. Rating agencies acted as if in a football match the referee was clearly a supporter of one of the two rival teams.

The problem is today's crisis is due to the increasing power of a wild market system where everything is allowed. The regulator is influenced by money more than realistic previsions when deciding. It is the abdication of politics and the rise of a disaster movie about finance.

China and Russia idea to create their own rating agency goes in the direction to stop a monopoly where almost 90% of the world market is rated by Moody's, Fitch and S&P. What about Europe? The only country to be really hit by the three sister misleading analyses doesn't seem to respond properly. The norms on the regulation of rating agencies activities and the Tobin Tax could be ok but what about the creation of a European rating agency? If rating agencies are necessary for the market to survive, a European one would certainly help the system to be more balanced. In time we'll see.


giovedì 18 ottobre 2012

La calle

Por fin, las primas de riesgo de los distintos países europeos comienzan a bajar, tras una mala época en la que se veía dificil salir de esta situación.
Un manifestante en la Plaza Syntagma en Atenas
Personalmente, creo que la crisis, española, italiana, griega, irlandesa y portuguesa tiene raíces diferentes. Los valores de la prima de riesgo de estos países lo demuestran: 310 (Irlanda-Alemania), 313 (Italia-Alemania), 371 (España-Alemania), 612 (Portugal-Alemania) y 1540 (Grecia-Alemania). Valores que parecen mejorar solo a la hora en que la Unión Europea ingrese liquidez en el circuito de países endeudados.

Ahora mismo, como se está debatiendo sobre la posibilidad de un inminente rescate a España, los mercados esperan que la llegada de ese dinero público haga bajar la prima de riesgo. ¿Es esto un truco? Puede que sí. Y en efecto hace que surja la siguiente pregunta: ¿la prima de riesgo depende de las reformas que estos países endeudados necesitan o depende del montón de euros que Frankfurt ponga en manos de los bancos? La respuesta oficial es que estos países, tanto Grecia cuanto España, necesitan reformas de verdad y esto hace que sus primas de riesgo estén tan altas. ¿Y la menos oficial? Es la de la calle. La misma calle que veremos el 14N en la huelga general que habrá por los distintos países en Europa (España, Grecia y Portugal) y que expresará el malestar europeo por medidas difíciles que arriesgan a llevar el continente entero hacia una Weimar peligrosa. La misma calle que lleva años sin que nadie la escuche. La misma calle que ha llevado a los extremistas de “Nuevo Amanecer”(Λαϊκός Σύνδεσμος) al poder en Grecia. La misma calle a la que la clase política europea, tarde o temprano, deberá dar muchas respuestas.


lunedì 15 ottobre 2012

"Six decades of peace and democracy in Europe"

"For over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe"

With this motivation, last Friday the Oslo academy decided the Nobel Peace Prize for the European Union. Many have criticised the decision as happened in 2009 for Barack Obama's Nobel. At that time, I agreed on that criticism since Obama had not proven yet to deserve such a prize. His administration had really little time to cope with world peace. One year was not enough either for him or any other one. I believe that on that occasion political marketing prevailed over reality. A good intention does not exactly mean a good action. It is a plus, of course. Especially after a decade of US politics inspired to Bush JR's "hawky" wars. But that doesn't make of Obama a Nobel Peace Prize.

Now, many others criticise EU Nobel Peace Prize, as in 2009. Public opinion believes that the Oslo academy more than being a prestigious international body is turning into a political institution. But to be honest, more than once Oslo awarded Nobel Peace Prize to international organizations: from UNHCR and Red Cross to ILO. Surely, EU is not an international organization or anything comparable to Red Cross. But none can deny a fact, which is proven by history and well explained in the motivation. After the horrible massacres of WWII, Adenauer, De Gasperi, Spaak, Spinelli, Schuman and all EU founding fathers saw in the union of our continent the only way to peace. Even if nowadays democracy, human rights and prosperity are questioned somehow, we are not that far. We can do better, for sure, but we are on the right direction and people still need to be reminded about that. A Noble Peace Prize is a good choice!


giovedì 11 ottobre 2012

Fiscal compact, Tobin Tax and ESM: is this enough?

After decades of directives on weird and technical issues such as the percentage of cacao in chocolate production, EU institutions have been finally forced by unexpected events to debate on very different matters. Since the financial-bank-sovereign debt crisis, EU had to come at a very fast pace to a deep reform process. I add nothing new when I say that big crises lead to big reforms, if then such reforms are right or wrong it is hard to say. Most recently, financial measures seem to be "a la mode", as people in Brussels say. As a matter of fact, none would disagree about the necessity to deeply reform the European Union. From its sovereign debt, its bank and foremost its institutions. But are things like fiscal compact, the so called Tobin Tax on financial transactions or the new euro rescue fund efficient enough to cope with the EU crisis? Does the European Stability Mechanism launched on Monday in Luxembourg ahead of the Eurogroup meeting match with reform needs? To me it seems patching up and nothing more, with a big amount of public money disappearing out of those necessary cuts. Our healthy lifestyle was unbearable, I agree. Western countries should turn their life standards into more sustainable and responsible ones. But the way out of the crisis seems to be more based on figures than on facts. Numbers matter, but sadly they seem to be the only thing in Frankfurt and Brussels seem to be interested in. Hopefully, we need a different approach to solve the continent problems. 

People protesting on Athens streets a couple of days ago, while Angela Merkel was visiting what many call Athens "puppet government", shows that bailouts, tax cuts and measures like the ones imposed by Brussels and IMF give stability (perhaps) only to the starving beast, namely XXI century global market. Although, Greece is paying decades of public money waste and corruption at the hand of market speculation, is the game worth the candle? Is it worth it sowing the seeds of anti-Europeism feelings in a moment when unity is required? Of course, EU regulatory affairs on the financial crisis should provide the most efficient tools in order to keep the markets calm. But is Europe considering the effects of what is doing? Is Europe aware of decades of silence on the democratic shortcoming issues, on getting more cohesion and better integration? Is Brussels working to strengthen EU countries ties or does it care only of budget balance?

Big questions. Hard questions. Useless and rhetoric questions, some would say. Still necessary questions, I'd reply.