Britain’s relationship with the European Union is becoming so fraught that even one of the most moderate members of government finds it hard nowadays to use the right words when talking about it.
Last week was a feast of records for Wall Street: the S&P 500 recorded six consecutive highs, something not seen for two decades. The streak only ended after a jobs report that showed the first negative reading in seven years, skewed by the hurricanes that hit the U.S. in September.
The scenes in Catalonia, where local authorities say more than 400 people were hurt by police, are reminiscent of violent scenes in Eastern Europe that have tested, time and again, the European Union.
The excitement that had been building up before the Florence speech of UK Prime Minister Theresa May is quickly turning into disappointment. Many had expected the Prime Minister to find a way to unblock the stalled negotiations over Brexit, but the speech, as delivered, was far from achieving that.
Many people admire companies like Uber or Amazon for the speed with which they build market share and “disrupt” the competition. There is more and more talk about “Uberisation” and when retailers go bust, they are said to have been “Amazoned.”
But we should perhaps stop and think: are we in fact praising nothing else but the return to old-fashioned exploitation? These companies’ main, crucial competitive advantage is cheap labour. OK, technology helps, but if they were to treat people who work for them properly and pay them higher wages, they would not be as rich as they are now.
French President Emmanuel Macron went to Central and Eastern Europe recently to ask officials there to support his plan to change the legislation regarding posted workers, to prevent it being abused.
In essence, the posted workers’ directive allows one company in a member state of the European Union to send its workers to work on projects in another member state, but still pay them less than local workers. This is because, while the company has to abide by local minimum wage rules, things like tax or social security payments are still made in the country of origin.
The news that the US Federal Deposit Insurance Corporation (FDIC) is suing European banks in London for manipulating Libor should worry central bankers everywhere.
It’s all hush-hush, with details coming from reports in newspapers, rather than made public officially. The Financial Times reported that the FDIC is suing Barclays, Deutsche Bank, Lloyds Banking Group, Royal Bank of Scotland, Rabobank and UBS, as well as the British Bankers’ Association, accusing them of fraudulent misrepresentation.
Lloyds said it doesn’t believe the claim has any merit, while the others did not comment, according to the report.
The Bank of England has reason to pat itself on the back. During the financial crisis of 2007-2009, things could have taken a very ugly turn if it hadn’t cut interest rates to record lows and hadn’t started printing money.
A recent article in Politico says that some European Union policymakers believe that Brexit negotiations are so chaotic on the British side because of a cunning plot to swamp the EU with well-prepared, profoundly thought-out position papers at the last minute.
“Having seen the movie ‘Dunkirk’ over the weekend, history might suggest that the British could turn disaster and disorganization around,” it quotes an European official as saying.