The markets and the Union

As fear takes over the stock markets completely, we cannot but wonder why we are so utterly unable to deal with the financial spirits we called years ago and loved so dearly for so long. The biggest problem though is that we don’t just lack the knowledge of how to deal with our ever-shrinking markets, but we don’t even know who should deal with it.
And it seems as though the market forces we created are now stronger than us. This sounds super apocalyptic, but it is true. The credit crunch became a financial crisis, which is now about to become a perpetual economic disaster. Whilst the stocks crash all across the continents and banks go bust, business owners are already forced to declare bankruptcy. Brokers are seen in tears outside the stock exchanges in London, Tokyo, New York and Frankfurt, even though the central banks cut interest rates like a baker cuts bread. This morning, the value of City shares fell by £200m and stocks in Frankfurt and Paris dropped by 8%, again. The Sun says a cold war started between Britain and Iceland, and the Telegraph thinks the markets will end in a “complete bloodbath”. To make the catastrophe worse, everyone has a cold.
And here the big question: Who can help us and our markets? God? Marxism? Suicide? – I don’t know, really. But it is interesting to see that the one and only big player in international economic cooperation is as quite as a dead person, since the crisis started.
And yes, I’m talking about the EU. For about 60 years we have given more and more economic sovereignty to our friends in Brussels and now we ignore them. We ignore the very institution that could maybe be the only rescuer in this awful situation.Even though it was first planned to try a EU move and centrally coordinate all emergency measurements; at least after the Merkel Move, it was clear that all countries would have to fight for themselves. Hours after a meeting with Gordon Brown, Nicolas Sarkozy and Silvia Berlusconi, promising a EU solution to the crisis, Merkel guaranteed all savings in German banks (the Economist reports that this pledge is worth more than €1 trillion). Those nations fearing that the German move might destroy their banking system (even more), copied the move quickly. Hours after Sweden followed the Merkel move (which actually was the Irish move, as they were the first to guarantee the money in their banks, but the alliteration Merkel move just sounds better in headlines) Swedish banks are said to have advertised in Finland that investors should bring their money quickly to Swedish banks to be save, thus forcing the Finnish government to react as well.
French Prime Minister François Fillon even thinks it’s “logical” that the nation states and not the überstate EU deals with the crisis. But the real reason for this nationalist approach to the crisis was put into words by German finance secretary Peer Steinbrück. He said: “We as Germans don’t want to pay into a big pot where we don’t have control and don’t know where German money might be used.”
He is right, there is this fear that some taxpayers in some countries will have to pay for the problems caused by other countries. For example, many people on mainland Europe strongly disliked the Turbo Capitalism of the City of London and are now scared that they would have to pay for it. In the same way as British taxpayers would not want to pay for the disastrous management of Icelandic banks.
However people feel about it, a EU-European approach would be the best thing at the moment, keeping in mind that we know that the EU has been great in dealing with economy for the last 60 years. Why would Brussels not be able to deal with this crisis?
We should give Europe a chance.
Schreiber

WHY WAS THERE NO JOINT STATEMENT?

A very important statements came from America today: Peaches Geldorf married her boyfriend, Max Drummy. And, let’s be honest, it was about time for them to get married - they have known each other already for nearly four weeks!
Okay, that was not quite the statement I was actually thinking of. Instead, I was thinking of statements made by US President George W Bush and his Secretary of State, Condoleezza Rice. Both politicians demanded that Russia ends all military operations in Georgia, as they have promised to the EU Presidency (being represented by Nicolas Sarkozy at the moment). In an impressively direct and Russia-critical press conference that was broadcasted around the globe, Mrs. Rice warned Russia of consequences, but failed to name any.
Looking at Russia’s ongoing military intervention way beyond the actual zone of conflict (many journalists reported that Russia continues to bomb Gori, a city outside of South Ossetia), Mrs Rice said: "I have heard the Russian president say that his military operations are over. I am saying it is time for the Russian president to be true to his word." The Secretary also warned Russia, saying that “things have changed” since the end of the USSR.
Not knowing what the consequences for Russia could be, it is not quite clear yet, if they will lead to an end of the war.
Mr Bush gave an equally important press conference earlier today, saying: "The United States stands with the democratically elected government of Georgia and insists that the sovereignty and territorial integrity of Georgia be respected." Whatever one may think about the US-reactions to the crisis, one cannot but notice that these statements should have been made by a EU-European politician.
And yes, you may say, European politicians made similar statements. This is in fact true, but only on national levels. What worries me, however, is that the EU was (once again) unable to come up with a common policy for the crisis. At the beginning of the conflict I was rather confident that the EU would find a common South Ossetia policy, however, I was wrong (at least that's how it looks like at the moment).
It might have been the wrong decision to sent Mr Sarkozy to deal with the crisis and enforce some sort of ceasefire. Maybe it would have been better to send a EU politician and not an (after all) ‘national’ politician. But, to be honest, could Javier Solana (the de facto and to a certain extend also de jure EU Foreign Minister) have made a big difference? Would Russia be truer to its words, if the ceasefire would have been promised to Mr Solana instead of Mr Sarkozy? I am not too sure about it… I only know that it is truly shameful for the EU to not be able to find a common policy on this problem.
However, it is not too late yet. There is still time for statement of all EU members demanding that Russia stops its unlawful military intervention in Georgia immediately. The EU would also have to promise South Ossetia and Abkhazia that their self-determination as a state can be guaranteed by the Union.
Schreiber

WHAT WE LEARNED FROM THE WAR

The war is over for now. This is great news for everyone. Firstly, it is great news for the people of the Caucasus (obviously!), but then, it is also good news for us people in “the west”, as the oil market will stabilise again, after going berserk in the past few days. Russia called a halt to military actions this afternoon, however, making clear that it would re-intervene, as soon as it is judge necessary. Dimitri Medvedev, who was relatively quiet during this war, declared that Georgia was sufficiently punished. This is an utterly dangerous statement, who does Mr Medvedev think he is? Is he a one person war crimes tribunal?! But instead of criticising a man, who is criticised by everyone anyway, let us have a look at what we have learned from this terrible and devastating war. 1. We noticed that despite all predictions of having reached the End of History, as many commentators predicted after the fall of the Berlin Wall, history did not quite yet come to an end. A great mind, Chrystin Freeland of the FT, actually says that instead of having reached the End of History, we have entered the New Age of Authoritarianism. I agree. For the first time since the fall of the USSR, Russia fights a war outside its own territory again. (This is true as long as you see Chechnya as Russian territory). No-one was able to do anything against this pointless bombing. Not even David Cameron’s comparison between Russia and Nazi-Germany helped much (apart from reminding Mail readers that we all have to fear a Russian Blitz). Even politicians who actually have some power (in contrast to Mr Cameron), could not do very much. Dick Cheney’s demand that Russian “aggression […] must not go unanswered,” does not really mean much. Nicolas Sarkozy, at the moment the head of the EU, might have had something to do with Russia finally agreeing to a ceasefire, but his role in all this is not quite clear yet. It is not only Russia though, that represents the New Age of Authoritarianism: we see “oil-powers” across the globe turning autocratic. This is the case in many African and Asian countries, but also in South America. We even enthusiastically watch the Olympics in a country that does not value freedom too much. 2. We learned that Mikhail Saakashvili is one of the least clever politicians around. I mean, let’s be honest, attacking a wannabe independent and Russian-backed South Ossetia and thinking that people won’t notice by the world because of the Olympics?! That’s just chuckleheaded, to say the least. Nevertheless, Mr Saakashvili was clever enough to represent himself well in the Western media. Today, people actually forget that it was he who started the war. Yes, Russia’s reaction was wrong and, no doubt, over the top, but it was Georgia that went to war with a semi-independent country that does not want to be part of an “unstable, immature, chaotic, corrupt, but hopeful” Georgia (to use the Guardian’s words). 3. We discovered that Vladimir Putin is most definitively still the macher in Russia. Dimitri Medvedev was not as prominent as his predecessor Putin during this war. There are a few more things we have learned from this terrible and unnecessary war, like how some UK papers preferred reporting about Maddy McCann, Sienna Miller, Stella McCartney and the like on their front-pages instead of the war. However, Mr Franklin and I are trying to keep the blog entries relatively short… Schreiber