There are moments in politics and policy that change the course of history; when they can be summarised in three words, they are the best.
Mario Draghi’s statement back in 2012 that the European Central Bank will do “whatever it takes” to save the euro was such a moment: from then on, the speculators’ attack on weaker eurozone members’ sovereign debt stopped.
Another such moment came three years later, when in 2015 German chancellor Angela Merkel allowed one million refugees to enter Germany. “Wir schaffen das” (we can manage this), she said.
Brexit and Bitcoin both start with the letter “b”. Does the similarity stop here? As it turns out, no. Both these words refer to concepts that are quite alike. Of the two, Bitcoin is probably the least toxic.
Continental Western Europe, and the European Union in particular, have often been criticised as stagnant bureaucracies that impede creativity and growth. The US and UK economies have been praised as the places to go for people who wanted to see their careers thrive.
It is true that the Anglo-Saxon model, with its focus on free markets, works best for entrepreneurial types – witness the absolute dominance of Silicon Valley in the world of tech, or the City of London in banking.
And yet, when it comes to developing, attracting and retaining talent, it looks like the EU — or at least Western Europe and countries associated with the EU — are still the best places.
The Bank of England will publish its inflation report next Thursday, and this time it will get even more attention than usual.
Brexit is being felt in prices more and more now, with the cost of grocery bills jumping and prices for essentials going up. The phenomenon of “shrinkflation” is in full swing as well; many products are mysteriously losing weight, but maintain their price.
No matter how much it would like to help (or to meet its inflation target), the Bank of England cannot do anything to prevent prices from rising. In fact, to be more accurate, it could, but it will not. The central bank could raise interest rates, stopping the pound’s depreciation — but if it does this, the housing market would crash.
The UK’s negotiations with the European Union started with a proposal regarding the status of EU citizens in Britain after the country leaves the EU. One particular point in the proposal gives a flavour of things to come. It should worry anyone, not just EU citizens.
“I take the advisory point” about the UK’s EU referendum. These were the words spoken by Nigel Farage in a BBC interview over the weekend. He added that he wants to see constitutional changes in Britain that would make all referendums binding.
The best part of this statement, of course, is the fact that the man who predicted riots on the streets if the government ignores the referendum’s result was forced to admit publicly that the government, under current legislation, does not have to act on the plebiscite.
Some eight years ago, while visiting Paris with a friend, a couple of young Parisians asked us where we lived. “Oh, London, so cool!” was their reaction. Understandably, I felt smug. Would these young people say the same thing today?
I was reading the other day on the blog of excellent Bucharest-based economist Radu Craciun his latest article: “Is Eastern Europe the EU’s scapegoat?” When I read the headline, I thought the article was about Brexit; but in fact, Radu writes about how some experts in the EU claim that the single currency was created as a way to maintain the unity of the Union after it expanded “too rapidly” to the East.
Well, that’s new. I didn’t realise that, besides causing English people to behave irrationally against their own interests and vote to leave the world’s biggest trading bloc, Eastern Europeans are also guilty of inspiring what could turn out to be the world’s least successful currency union.