A study about corruption published in December puts forth an interesting, and troubling, conclusion: some countries in the European Union perceive themselves as less corrupt than they actually are.
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.
What a spectacular lesson the first half of the year delivered for investors. At the beginning of the year, it looked like the UK’s vote to leave the European Union was a great idea: the eurozone seemed on the brink of disintegration.
Beyond the depressing, backward-looking policies that the Brexit vote and the election of Donald Trump as US president seem to have brought, there is a ray of hope.
People elsewhere in Europe, seeing the first ugly consequences of populism, might find enough motivation to go to the polls in elections just to try to keep populists out of government. I am talking about the decent people who are tired of politicians but aren’t seduced by the populists’ siren calls.
“You see, no hope’s a dangerous thing.”
— W.A.S.P. “My Tortured Eyes”
Last year’s Brexit vote and the election of Donald Trump as president of the U.S. shook the world out of complacency and sent analysts and experts into a frenzy of attempts to explain what was behind these two events.
For Trump’s election there is the partial explanation of the Russian intervention. For Brexit, the fact that the tabloid newspapers have, for years, portrayed Eastern Europeans as benefit scroungers who at the same time “steal” jobs from the British may have played a role.
But what about the rest of Europe?
If you’re curious to see where the seeds of the next financial crisis are in Europe, take a look at what’s happening in the real estate sector.
European equities are likely to continue to lead the stock markets higher into the end of the first quarter, but there will be some hiccups.
The technical picture looks good, but the question is whether technical factors and the aggressively interventionist monetary policy will be enough to put an end to the eurozone crisis for good.
Kicking and screaming, the French government has finally begun to introduce some reforms towards a less regulated economy – although all the while trying to look as if this isn’t what it is doing.
The European Central Bank had no choice but to launch its own quantitative easing programme in the end. The jury is still out on whether it will work – but judging by the first reactions, it could actually mark the return to some sort of normality for the eurozone.