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Germany as Maya the Bee

George Pieler and Jens Laurson take issue with the French finance minister's claim that Germany's productivity is what ails Europe's economy. Writing in the Wall Street Journal they compare Germany with Maya the Bee. (Subscribers only, but you get the full article via Google News.)

Maya was a curious, busy bee, always buzzing from adventure to adventure. Her best friend, Willi, however, was less ambitious and had a more rotund physique. His catch phrase was the elongated, nasal cry: "Maya-don't fly quite so faaaaast."

We were reminded of the Willi character when French Finance Minister Christine Lagarde recently called on Germany to compete a bit less effectively. She argued that Germany's success in exporting goods and its high productivity supposedly puts undue pressure on the other European economies. Ms. Lagarde went so far as to suggest that higher German productivity, in part caused by restrained labor costs, might not be a "sustainable" model for the future.

Laurson and Pieler criticize the "concept of economics as a zero-sum game, i.e. France may only gain at Germany's expense" which "is so woefully outdated that one must wonder how Europe ever got as far is it did, economically. It utterly disregards the fact that competition doesn't weaken but strengthens economies."

Continue reading "Germany as Maya the Bee"

NATO to Develop Contingency Plans to Defend Baltics

“Thanks to Poland, the alliance will defend the Baltics”, reports the Economist:

IN A crunch, would NATO stand by its weakest members—the Baltic states of Estonia, Latvia and Lithuania? After five years of dithering, the answer now seems to be yes, with a decision in principle by the alliance to develop formal contingency plans to defend them.

Speaking in Prague in April 2009, President Barack Obama publicly demanded that NATO develop plans for all of its members, which put the Baltic case squarely on the alliance’s agenda. But in the months that followed, inattention and disorganisation in his administration brought no visible follow-up. Instead, snubs and missteps, particularly on the missile defence plans, deepened gloom about how seriously America took the safety concerns of its allies in Europe’s ex-communist east. An open letter by security bigwigs from Poland, the Czech Republic, the Baltic states and other countries publicly bemoaned the decline in transatlantic relations.

...

Now that seems to have changed. Formal approval is still pending and the countries concerned have been urged to keep it under wraps. But sources close to the talks say the deal is done: the Baltic states will get their plans, probably approved by NATO’s military side rather than its political wing. They will be presented as an annex to existing plans regarding Poland, but with an added regional dimension.

A proposal to create Baltic contingency plans has been shot down before, according to Baltic Reports:

General James Craddock, NATO’s supreme commander at the time, asked the alliance for approval of a contingency plan for the Baltics in October 2008. However Germany and France opposed the measure, fearing it would unnecessarily agitate Russia, and the issue as been debated in secret within the alliance since.

It should be interesting to see how this develops. Formal contingencies established or not, my feeling has always been that if any NATO member is attacked, the Alliance will invoke Article V, the mutual defense clause. Article V is the core foundation of the Alliance -- if NATO failed to defend one of it’s members, that would shatter the Alliance. Perhaps this perspective is too idealistic though?

Old Europe Drifts out of Recession First

The Economist:

Figures released on Thursday August 13th showed that the euro area's GDP shrank by just 0.1% in the three months to the end of June, far less than the 2.5% slump in the previous quarter. The near stability was the result of an early exit from recession in the region's two largest economies. The economies of both France and Germany grew by 0.3% in the quarter, surprising analysts who had expected the figures to show small contractions in output for both. As badly as these economies have suffered in the past year, there will be some pride that the economies have started to grow before those of America or Britain.

Obama and Merkel are "Trans-Atlantic Frenemies"

"The White House views the chancellor as difficult and Germany is increasingly being left out of the loop," is the conclusion of a good Spiegel International article by Gregor Peter Schmitz and Gabor Steingart. According to them, the "Washington of Barack Obama" considers Merkel's policies "as hesitant. And when it comes to economic matters -- particularly after the experience in battling the financial crisis -- they don't feel she has much expertise."

The label "difficult" is attributable to Merkel's refusal to allow then-presidential candidate Obama to hold a speech at the Brandenburg Gate last summer. They also found it rude and impolitic when she didn't accept an invitation to meet with the newly elected president at the White House in April, despite that fact that both sides had been able to find time in their schedules for a meeting.

Reuters' chief correspondent Noah Barkin, however, puts the blame for the non-meeting on Obama.

The Spiegel article continues to quote two experts on Merkel: According to Dan Hamilton, director of the Trans-Atlantic Center at Johns Hopkins University, German "checkbook diplomacy" is currently experiencing a renaissance. And Stephen Szabo, head of the Transatlantic Academy in Washington, is cited: "France is in right now. The impression is that Germany isn't really of much use at the moment. (...) Paris is no replacement for Berlin in the long-term. (...) The Americans will need the Germans again in their dealings with Russia. After the German elections a new era will begin."

Kos Poll: Americans love France and Europe

The left-wing US blog Daily Kos has let Research 2000 do a poll on some of the purported 'boogeymen' of the right, including France and Europe. It turns out that France and Europe are almost universally loved by Americans. France has a 66 to 26 favourability rating, and for Europe the rating is 63 to 29. Favourable opinions of France and Europe exist across ethnic groups and party lines, but there is some regional difference: southerners have an evenly split opinion of both France and Europe.

This is quite a dramatic shift in opinion among the American population from four years ago, when the (more conservative) pollster Rasmussen reported that 57% of Americans held an unfavourable opinion of France.

Opinions of France have probably improved as a result of the improved political relationship that started with the election of Sarkozy, and were reinforced by the election of Obama. At the same time, they might deteriorate again if there is another major diplomatic disagreement between the two countries. Right now, the French and Americans have important reasons to stick together as they are both threatened with 'revenge' by Somali pirates...

Setting the Record Straight: Carl Benz from Germany Invented the Car

First Al Gore invented the internet. Then President Barack Obama invented hope and change. And now he proudly claimed in his address to the joint session of Congress:

I believe the nation that invented the automobile cannot walk away from it. None of this will come without cost, nor will it be easy.  But this is America. We don't do what's easy. 

Apparently Americans invented everything, including history. And it's only other nations that walk away, give up, quit and cry like babies when they hit an obstacle. Only other nations do things the easy way, like signing up for three or four credit cards or borrowing money from China and from future tax payers. Continue reading "Setting the Record Straight: Carl Benz from Germany Invented the Car"

Cheese Wars and Strong Coffee

Americans will soon pay more for a precious piece of French Roquefort. The American government has as a last, petty gesture in its trade policy decided to raise tariffs on the product from 100 to 300 percent. This is part of a more general round of retaliatory tariffs in response to the ban the European Union maintains on beef produced with growth hormones. But it is clear that Roquefort has been targeted for political sensitivity, as the Independent writes:
There was a violent reaction in France when import duties were first raised on roquefort cheese 10 years ago. The small farmers' leader José Bové – then a roquefort producer – began his rise to international celebrity by attacking a McDonald's restaurant at Millau, near Roquefort, with mallets and a bulldozer in August 1999.
The main effect this will have is making Roquefort more exclusive. And, perhaps, something of a political statement among Michael Pollan fans and the like. I do hope the French embassy will react appropriately at societal events. If the new administration does not dial this back... Continue reading "Cheese Wars and Strong Coffee"

Sarkozy pilots Middle East cease-fire talks, fills US power vacuum

Israel’s land invasion continues with the Jewish state showing little sign it is ready to negotiate a truce.  While Hamas has indicated it is prepared to begin negotiations, Israel does not intend to sit at the table with Hamas in any future negotiations, reports Haaretz:
Israel will instead seek separate agreements with moderate Arab states, with the Palestinian Authority and with the international community.

"The international community will initiate the agreements and will impose it on Hamas," [a Haaretz] source said. "The agreements will be with both the PA and Egypt and then if Hamas will not agree it will pay the price, mostly by even greater [diplomatic] isolation."
Despite disallowing signals from Israel about the prospects of their short-term success, the ever-ambitious Sarkozy is taking advantage of the US power vacuum to assume diplomatic leadership in the talks, hoping to capitalize on France’s controversially reinvigorated ties with Syria, Time reports:   
Continue reading "Sarkozy pilots Middle East cease-fire talks, fills US power vacuum"