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  • The PM who would be premier | Business Spectator
    the result fair even though he probably reluctantly accepted its strictly legal legitimacy It wasn t fair because the two New South Wales independents came from conservative electorates electorates that voted by a fair margin for coalition candidates in the senate And so most days often day after day Abbott offered up photo opportunities of him visiting every factory and a fair number of the small businesses in the industrial suburbs outside of Canberra He was relentless with these visits just as he was relentless in repeating over and over again the slogans about boats and the carbon and mining taxes And about how Gillard had lied her way into office by promising no carbon tax and then promptly delivering one Abbott s great strength as opposition leader has been his sustained campaigning and the discipline with which he has campaigned over almost two years now This relentlessness and discipline has clearly turned off some voters but it has helped make the coalition almost certain winners of the September 14 election As for the Gillard government the idea that it could spend most of the election year governing was absurd There was nothing wrong with Gillard announcing the election date eight months out from the poll except for all the things that went wrong immediately after the announcement Who knew that a day or so after the announcement Craig Thomson would be charged with fraud or that Eddie Obeid would be such a compelling and interesting witness at the New South Wales ICAC inquiry Yes you could argue that someone should have known but that s another story Announcing the date of the election was one thing but how Gillard framed the announcement was really stupid And literally unbelievable There was almost something liturgical about her line that there was a time for governing and a time for campaigning and that at this time she was governing You have to wonder who writes this stuff for her even if the sentiment is all her own Here was a government awash with leadership speculation and with a caucus full of media tarts hysterical wondering out loud with journalists what they would do if they lose their seats In these circumstances surely even Gillard should have realised that this idea that she would govern until the official campaign in August was ridiculous and would be perceived that way by most people People aren t stupid They know this government really has no other way to cut through announcing policies rabbiting on about the number of bills they ve passed is not working to say the least than to campaign full on promising locally targeted stuff while recommitting to the big national projects And to be as negative about Abbott as possible And that s what Gillard is trying to do out there in western Sydney That s what she s going to do in other regions of Australia from now until September 14 Abbott of course will be out there with her Abbott is always there to greet her And he was there to greet her when she arrived and checked in to that rather modest Rooty Hill hotel As it turns out the rather bizarre climate change denier Lord Monckton who had taken a room in the very same hotel was planning a greeting of his own Then there s the media There s nothing like a campaign to give you a range of stunts and talking point grabs colour and movement that you can run as news updates all day long on digital media and which can be produced at relatively low cost Covering a campaign is relatively easy and relatively cheap which is the main criteria it seems for what gets covered given the cuts in journalist numbers at a time when digital media needs new stories every minute or so in order to keep eyeballs coming to websites and mobile devices It is therefore disingenuous for some journalists to pretend a sort of cynical world weariness almost disappointment about the fact that what lies ahead is six of months of western Sydney style circuses The western Sydney circus very quickly degenerated into a dog whistle contest between Gillard and Abbott about foreign workers and asylum seekers There s more of this coming as well What is strange about the western Sydney campaign this week is how much it feels like a local campaign with virtually no resonance outside of the target area It has been focused on issues roads gun violence gangs for which the state government is responsible and about which most people outside western Sydney don t give a proverbial Gillard is a diminished prime minister and not just because she is likely to lose the next election Neither Paul Keating nor John Howard who were clearly heading for defeat in 1996 and 2007 respectively were thus diminished This is in part due to political ineptness in part because Tony Abbott has attacked her so ferociously and successfully and in large part because Kevin Rudd is there always there as an alternative leader Not only has Julia Gillard lost and she had it for a few months late last year most of the advantage that goes with being an incumbent prime minister in an election campaign she has sounded more and more like someone who wants to be the premier of New South Wales You have to admire Gillard s determination to keep campaigning She has nothing really going for her Her MPs are in despair including her supporters and the media almost daily presenting us with another draft version of her political obituary You have to wonder whether like Keating before the 1996 election Gillard is inside a bubble isolated a bubble in which she is able to believe the election can still be won Print this page More from Michael Gawenda 08 Jan Lessons in liberalism from New York s left turn 27 Dec The political ghosts haunting Parliament House 11 Dec Abbott is

    Original URL path: http://www.businessspectator.com.au/article/2013/3/6/national-affairs/pm-who-would-be-premier (2014-01-12)
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  • Michael Gawenda | Business Spectator
    blurred This is the world politicians also play to by Michael Gawenda 6 50am October 03 25 comments What lies beneath Canberra s silence The rules of engagement between journalists and politicians have been broken for some time If they worked those in the know would tell us what s really going on with Kevin Rudd by Michael Gawenda 6 38am September 18 9 comments More school morals less accounting 101 The debate we need to have is not about how Gillard s education crusade will be funded but how to reverse the growing gap between advantaged and disadvantaged children by Michael Gawenda 7 29am September 05 15 comments Politics by the rich for the people Modern politics has become farcical Instead of sensible debate the public is increasingly force fed fantasies based on the slimmest of facts by Michael Gawenda 7 05am August 22 22 comments Politicians hitting all the wrong notes Once politicians talked about ideas Now they too readily reach for fatuous musical references by Michael Gawenda 6 53am August 08 8 comments Why we still need to talk about Kevin One way or another Kevin Rudd will get his revenge on those who robbed his manifest destiny Either way the Rudd cheer squad remains alive and continues to play a vital role in the destruction of the Gillard government by Michael Gawenda 6 39am July 23 25 comments Resistance is futile With Bob Brown gone Labor s relationship with the Greens was bound to come to grief But given Labor s lack of moral and political capital distancing itself from the Greens won t be enough against a relentless Tony Abbott by Michael Gawenda 6 25am July 11 25 comments The Coalition s boat to nowhere Scott Morrison and Tony Abbott are in the business of moving as quickly as humanly not humanely possible from being in opposition to being in government Asylum seekers won t be the only victims by Michael Gawenda 6 32am June 27 25 comments Longing for a courageous leader The failure of Julia Gillard to show political courage may well signal the end of the Labor movement as a major political force Sadly Tony Abbott is also a master of timidity by Michael Gawenda 6 29am May 30 18 comments Baillieu Brumby and the ghost of Steve Bracks Most polls suggest Ted Baillieu will just miss out on snatching victory from John Brumby in this weekend s Victorian election But Steve Bracks was given no chance in 1999 and look what happened by Michael Gawenda 12 19pm November 26 Obama s loss can be Gillard s gain The drubbing the Democrats have taken in the US at the polls provides the Gillard government with a valuable lesson And that s the resolve to eschew poll driven policies regardless of the consequences by Michael Gawenda 7 09am November 05 1 comment The new paradigm will die in parliament It may be that the new political make up will produce a good government and a more democratic and engaged parliament Gillard will be desperately hoping it can be so while Abbott will be doing all in his power to prove otherwise by Michael Gawenda 7 38am September 10 4 comments Griffith is no place to grieve Kevin Kevin Rudd must be aware that his vow of silence on issues that aren t directly relevant to his constituents in Griffith is untenable If he wants to help Labor he will not recontest his seat by Michael Gawenda 8 05am July 22 21 comments A Paris Hilton prop We are at the start of an election in which Australia is gripped by a sort of insular unreality where budgetary concerns are compared to celebrity celibacy and global economic events can be safely ignored by Michael Gawenda 8 11am July 21 11 comments Page 2 Time wrought Gillard s transformation Not long ago Tony Abbott held the upper hand in media coverage and it felt like Australia had no prime minister at all Ironically as we enter an election year the tables have turned by Michael Gawenda 8 11am January 23 13 comments Confounded by pranksters and journalists Increasingly the journalism delivered to Australians is a product of stunts and the fantasies of media managers and that s as true of political coverage as it is of the comings and goings of celebrities by Michael Gawenda 7 01am December 12 25 comments Time to pinpoint Gillard s irresponsibility The weight of Kevin Rudd s deposition lives on in futile attacks over Julia Gillard s Slater Gordon role It should be focused on the prime minister s asylum policy failures by Michael Gawenda 6 41am November 28 18 comments Can Gillard drive home the Obama advantage Like Barack Obama Julia Gillard has been subjected to vicious personal attacks simply because she does not fit the mould of a traditional white middle aged male leader Come election time this may work in her favour by Michael Gawenda 7 24am November 14 25 comments Closing the book on Gillard s endurance It seems Julia Gillard was right that the carbon tax would never fell Labor as a competitive force at the next election Maxine McKew s book will do little to change this by Michael Gawenda 7 24am October 31 7 comments The affairs we had to have In Canberra at the moment we seem to be living in an age of affairs each with an undercurrent of failing male female relations These turgid political battles may be ugly but they are substantive by Michael Gawenda 6 29am October 17 25 comments Alan Jones and the hate love in Outrage over Alan Jones comments shows how the line between journalistic impartiality and social media opinion has been blurred This is the world politicians also play to by Michael Gawenda 6 50am October 03 25 comments What lies beneath Canberra s silence The rules of engagement between journalists and politicians have been broken for some time If they worked those

    Original URL path: http://www.businessspectator.com.au/contributor/michael-gawenda?page=1 (2014-01-12)
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  • Athens 2014 is not Sarajevo 1914 | Business Spectator
    made a direct comparison between the crisis management in the euro crisis and the period prior to World War I In an interview Clark said The euro crisis did make me think about parallels with 1914 and about the question of whether we ve actually gotten more politically intelligent as a species Because you look at the euro crisis and you see that all the leaders in Europe had one fear in common They all feared a meltdown of the currency But that fear that they had of a catastrophic outcome was not in itself enough to bring them into sort of a consensual position to force them into collaborating with each other and finding common solutions Clark s perspective may be the sombre and slightly pessimistic one of a historian After all we learn from history that we learn nothing from history as George Bernard Shaw put it Today s political leaders would nevertheless insist that important lessons had been learnt that would prevent a rerun of historical events and indeed a new war on European soil Expect to hear a lot of political rhetoric over the coming months explaining how the lesson learnt from previous confrontations in Europe was the push for European integration and how monetary union was the primary way of achieving this goal German chancellor Angela Merkel has been making similar arguments for years declaring the survival of the euro currency a question of war and peace It usually culminates in her mantra If the euro fails then Europe will fail But is the lesson of World War I really that simple And are the events of a century ago even remotely comparable to what is happening in Europe today By taking the emotion and the rhetoric away a more realistic picture emerges It is undoubtedly true that the confrontation between Europe s powers ended in the greatest possible disaster at the time That however does not prove that binding European nations together within a system of supra nationalism has done away with all such antagonisms As Christopher Clark correctly observes European politicians are still pursuing their own agendas despite being formally integrated into a construct euphemistically called European Union It remains a fact that countries do not have friends but only interests Instead of drawing the conclusion that more integration was a way of turning a once bellicose Europe into a more peaceful continent the very opposite might also be argued Was the Great War not triggered by tensions occurring within the Habsburg Empire a fragile construction that forced peoples together that had nothing in common but their hatred for each other And is the construction of the euro not trying something very similar If Europe today looks like a more peaceful place than in 1914 when the young generations of many countries joyfully entered the War then this has many reasons Progresses with European integration may well be among them More important however are other factors For a start society was a lot younger than today In most European countries the median age was just above 20 years Today it around 40 years It has long been shown in sociological studies that the relative abundance of young males is one of the best factors explaining wars Seen this way Europe s demographic ageing process may weaken its economic performance but at least it reduces its propensity for military conflict The differences in the forms of government are also clearly visible between then and now Constitutional and parliamentary monarchies were the predominant forms of governance before the Great War Today parliamentary democracies are dominating the scene Though there is a lively academic debate about this theory of democratic peace it seems that on balance democracies tend to be less prone to go to war with each other None of this is to say that conflict even violent conflict is impossible in Europe today My argument here is a much more modest one Whatever we may hear over this historical commemorations year about supposed parallels between the past and the present take any such claims with a few pinches of salt The euro crisis is not the July crisis Angela Merkel is not Wilhelm II and Athens is not Sarajevo World War I was the war that should have never been fought It was a war that was senseless purposeless and superfluous It sowed the seeds of further catastrophes over the following decades including the rise of communism fascism and the Cold War But World War I cannot and should not be used as a justification for a European integration agenda that is visibly failing Least of all should it be used in any discussion relating to Europe s monetary problems These are economic questions and fortunately not questions of war and peace Dr Oliver Marc Hartwich is the Executive Director of The New Zealand Initiative Print this page More from Oliver Marc Hartwich 21 Nov Silent assassins chase German savers 14 Nov Rates of wrath Why the EU needs real reform 07 Nov Don t put Germany on the economic axis of evil 31 Oct I spy the demise of the Old West alliance 24 Oct Big government makes Europe a no grow zone Related articles 12 Jan Obama picks Fed vice chair 11 Jan US jobs growth slows sharply 10 Jan Korea China jostle for Aust resources 10 Jan China trade balance contracts 10 Jan New home sales lift in November More from Business Spectator Technology Adapt or die Commercial The Future of Energy Family Business Alan Kohler s Family Business China China Spectator Please log in or register to post comments Comments on this article Comments Policy Zakk Lino Thu 2014 01 09 09 00 Brilliant You are finally ready for a leading position at the Vanuatu and Fiji Initiative Tony Holland Thu 2014 01 09 09 12 Lots of fancy words Oliver but surely wars are fought for many reasons land mainly but when a group of pple are starving they

    Original URL path: http://www.businessspectator.com.au/article/2014/1/9/economy/athens-2014-not-sarajevo-1914 (2014-01-12)
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  • Rates of wrath: Why the EU needs real reform | Business Spectator
    share too many features except their helplessness in the face of the continent s economic crisis It is also different because at least Japan was a highly developed high tech economy when its crisis struck The same cannot be said of countries like Greece or Portugal The latter point leads to the heart of the euro crisis It remains a structural crisis of many of its economies The problems are well known but easily forgotten when discussing monetary policy To deregulate Italy s labour market curb Greece s corruption increase Portugal s productivity and reduce France s bureaucracy it takes more than an interest rate cut It would need decisive action and genuine economic reforms Europe is not getting such reforms so what remains to counter the continent s economic malaise is another dose of aggressive monetary policy It will not be the last one and the next prescriptions say outright quantitative easing may be more potent still The question remains whether this is little more than life support for a dead corpse In a way it is only consequential that monetary policy seems to have become Europe s last hope For decades many European economies have resorted to all sorts of policies to stimulate economic growth without economic reform The classic recipe to get an economy to grow without inflicting pain on anybody was deficit spending Europe saw a lot of it since the mid 1970s Back then most European governments had net debt burdens of around 30 per cent of GDP In the eurozone it currently stands at 90 per cent of GDP The growth that such deficit spending has produced was typically a flash in the pan Its legacy meanwhile was a growing mountain of debt Another measure to artificially boost mainly southern European economies was constant devaluations For countries like Italy reductions in the exchange rate of the lira were a convenient tool of remaining competitive in export markets without tackling any of Italy s actual problems But because the competitiveness problems were never solved the next devaluation was never too far away Both policies deficit spending and devaluations have run their course Debt levels have reached such high levels that it makes further debt financing almost impossible Devaluations meanwhile are problematic not only because of fixed exchange rates between the eurozone economies but also because other non Euro economies are also engaged in weakening their currencies This only leaves monetary policy as a relatively painless way of stimulating Europe s economies without actually reforming them And this is what the ECB does with its loose monetary policy It is the last remaining option to kick start economic growth without change The basic problem for many European economies is that they have forgotten how to generate decent growth without debt devaluations or cheap money Real growth would result from getting the basic economic policy settings right a functioning legal system defined and stable property rights limited size of government low and predictable taxes low regulatory burden As the World Bank s new Doing Business 2014 report shows Europe is still a long way away from meeting these criteria France is currently ranked 38th Spain 52nd and Italy 65th the worst ranked eurozone economy is Malta at 103 If Europe does not reform then monetary policy may remain the only chance of stimulating the economy Of course this is not a sustainable solution but just palliative care This may explain why the judgments on the ECB s historic rate cut differ so much If you are concerned just about the next quarter s growth figures or indeed tomorrow s stock market then maybe the ECB has done the right thing in your eyes If however you are asking the more fundamental question of whether Draghi has done anything to solve Europe s structural problems the answer would have to be negative For decades Europe has tried alternatives to economic reform Near zero interest rates are just the latest episode They will fail like all other preceding pseudo solutions Dr Oliver Marc Hartwich is the executive director of the New Zealand Initiative Print this page More from Oliver Marc Hartwich 09 Jan Athens 2014 is not Sarajevo 1914 21 Nov Silent assassins chase German savers 07 Nov Don t put Germany on the economic axis of evil 31 Oct I spy the demise of the Old West alliance 24 Oct Big government makes Europe a no grow zone Related articles 12 Jan Obama picks Fed vice chair 11 Jan US jobs growth slows sharply 10 Jan Korea China jostle for Aust resources 10 Jan China trade balance contracts 10 Jan New home sales lift in November More from Business Spectator Technology Adapt or die Commercial The Future of Energy Family Business Alan Kohler s Family Business China China Spectator Please log in or register to post comments Comments on this article Comments Policy Tony Holland Thu 2013 11 14 08 31 Oliver this is a worrisome article of rubbish far more interesting if you had coupled it with the reforms or lack of them going on in countries that badly need reforming I thought you did encapsulate the type of reform needed in those countries rather well however But and its a bit BUT You seem to have missed the row going on in Greece and the Troika walking out yesterday without agreeing to release any more money to the Greeks this month and saying they will not go back into Greece until after the EU meeting on the 19th and if Greece comes up with EU ministers for agreement to disburse the EU portion the IMF has said if that happens it will go back into Greece and decide if they can release their portion too However the EU has specifically said Greece is not on the agenda until February and speculation abounds Greece will have to take some form of unilateral action by December if the EU and IMF aren t going to fund them any

    Original URL path: http://www.businessspectator.com.au/article/2013/11/14/economy/rates-wrath-why-eu-needs-real-reform (2014-01-12)
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  • I spy the demise of the 'Old West' alliance | Business Spectator
    region They are also realising that their individual and combined share of global GDP is going to shrink in the future This does not have to be bad news since it is a shrinking of relative size not of absolute wealth But it is concerning enough for both continents that in the 21 st century they will no longer be the dominant forces In the first years of the century both continents had to learn it the hard way how vulnerable they are For the Americans it was 9 11 that cruelly demonstrated that US values are not globally shared The bursting of the sub prime property bubble and the collapse of Lehman Brothers then sent deep shockwaves through the US economy For Europe there was no shortage of moments revealing its political and economic weaknesses either The sovereign debt crisis engulfing the continent and the frictions within it monetary union are obvious The sidelining of the European Union on the international stage is also visible whether it is in the WTO talks or in climate change negotiations The Europeans feel how their influence is fading Against this backdrop of threats to their global significance both Europe and the US have started talks on establishing the world s largest free trade zone A deal between the US and the EU on trade would undoubtedly help both sides in securing their status and protecting their turf not least at the expense of others as I previously argued in this column Tools to lock away global trade June 28 It appears that the chances of such an agreement are deteriorating and one of the main reasons for this is the US spying network that was once meant to fight global terrorism Europe is shocked and astonished that it was the target of the American spying and anti terrorism activities The US decision to spy on anyone and everyone after 9 11 has had the ironic result that America is in the process of losing one its oldest friends Europe For decades the ties between Washington and European capitals had been strong even if they had never been simple And they had to be strong After all the whole global architecture of economic cooperation was built on them That is why the World Bank has always been headed by a US citizen and the International Monetary Fund by a European That is why the OECD is still dominated by the US and Europe That is why the US and Europe are fantasising to run the world through the pointless G7 and later G8 summits Today with a G8 that includes Italy but excludes China the absurdity of this trans Atlantic hegemonic pretence is self evident On both sides of the Atlantic it should be clear that the Old West can only retain some of its global significance if it is united or at least not fighting itself After the latest NSA news this looks far from certain Not that it had been much better in recent years Throughout the GFC the Great Recession and the euro crisis the US and Europe have not argued the same case Typically the US have called for looser monetary policies and more stimulus whereas the European read German response was usually a plea for more austerity and monetary orthodoxy The US and the EU have not been singing from the same hymn sheets and even when they occasionally did it sounded remarkably out of tune In a global economic environment that needs the Old West less Europeans and Americans are no longer cooperating Instead they are doing their best to undermine the little bit of trust they still had left in each other Spying on the German chancellor allegedly from the premises of the US embassy in Berlin is the icing on the cake For the world economic order this is bad news We are in a period of transition towards a century dominated by Asia and the Pacific But this transition will not get any smoother by the collapse in the relationships between the nations in the Old West framework In the coming months and years President Obama and his administration will have a lot of work to do if they want to restore trust with their European partners And they will have to show even more commitment to make them believe they could be friends Dr Oliver Marc Hartwich is the executive director of the New Zealand Initiative Print this page More from Oliver Marc Hartwich 09 Jan Athens 2014 is not Sarajevo 1914 21 Nov Silent assassins chase German savers 14 Nov Rates of wrath Why the EU needs real reform 07 Nov Don t put Germany on the economic axis of evil 24 Oct Big government makes Europe a no grow zone Related articles 13 Jan Palmer wants to repeal Newman laws 12 Jan Israel s Sharon dead at 85 12 Jan Vic energy minister to step down 12 Jan Trade pact is close Robb 10 Jan Robb casts doubt on handouts More from Business Spectator Technology Adapt or die Commercial The Future of Energy Family Business Alan Kohler s Family Business China China Spectator Please log in or register to post comments Comments on this article Comments Policy Roger Knight Thu 2013 10 31 09 35 I think the US will feel the wrath of not just the EU for the unbelievable arrogance of the US Security services but also many other countries from around the World are from now on forward going to be treated as suspiciously as China is treated already What you have also pointed out Dr Hartwich in your considered piece is that what until a few days ago were considered cornerstones of World financial regulators and overseers of World monetary policy have most probably also crashed and burnt as a result of loss of essential and fundamental TRUST The World Bank the IMF and the G8 may have lost their legitimacy You are probably not wrong even

    Original URL path: http://www.businessspectator.com.au/article/2013/10/31/politics/i-spy-demise-old-west-alliance (2014-01-12)
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  • David Cameron, a Tory reborn | Business Spectator
    Even the vacuousness of the Conservatives presentation was borrowed straight out of the Labour Party s handbook Let optimism beat pessimism Let sunshine win the day Cameron proclaimed at the 2006 party conference as if he was trying to sell soap instead of politics It was like the soundtrack to Tony Blair s first election campaign Things can only get better just a tad more poetic Cameron did his very best to get rid of anything and everything that reminded voters of the old Conservative party He did not talk about Europe that awful issue that has divided the Tories since the days of Margaret Thatcher He did not bang on about taxes and the need to cut them He even got rid of the party s logo Back in 1987 Thatcher introduced a torch to symbolise liberty pride and unity Cameron replaced it with a stylised tree painted with big brushstrokes that make any three year old s drawing look like a work of art The only positive thing Tory traditionalists could say about the tree was that at the very least it was slightly right leaning Apart from that there was not much semblance with the party once led by Margaret Thatcher To his credit mimicking Labour worked quite well for the David Cameron s Conservatives for a while It allowed the party a restart it desperately needed However just being the nicer or better dressed version of Labour was not enough to win an outright majority in the 2010 general election Cameron needed to enter an unusual coalition government with the Liberal Democrats which once again changed his tune The Cameron of today however is a new Cameron At the same time it is the most authentic the Tories have looked for years At his Manchester conference speech Cameron finally got rid of the Conservatives camouflage of the past years and showed his true colours Or at least the colours that might win him a second term in office So Cameron presented the Tories as the party of business and the hard working people of Britain He explained the need to cut welfare dependency the budget deficit and taxes He even set out on a great eulogy to Margaret Thatcher the greatest peace time Prime Minister our country has ever had He must have forgotten about the Falklands but there you go A few years ago such a speech would have been unthinkable It would have appeared like a relic from the Tory past So what makes it possible today The main reason why Cameron is moving towards the right or rather going back to the Tory roots is the threat he feels from UKIP the United Kingdom Independence Party What had started off as a splinter group of disgruntled ex Tories fighting Britain s membership of the European Union has developed into a serious challenge to the Conservative Party In next year s European Parliament elections UKIP may well embarrass the Tories according to opinion polls

    Original URL path: http://www.businessspectator.com.au/article/2013/10/10/politics/david-cameron-tory-reborn (2014-01-12)
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  • Merkel’s victory will blunt her sword | Business Spectator
    to pass the relevant legislation For example the laws on the establishment of the European Stability Mechanism depended on the support of the Social Democrats and the Greens Although Merkel s slim majority made governing harder it also provided her with some good arguments on the international stage By pointing out how difficult it was for her to convince her own MPs of the wisdom of bailout packages for other European countries she could extract austerity policies from them in return Merkel could always explain to her international colleagues that to make bailout packages acceptable to her own coalition she needed to be able to convince her reluctant MPs that Greece et al were not bottomless pits After Sunday s election this line of argument no longer holds The most vocal of all eurosceptics liberal backbencher Frank Schäffler has lost his seat together with the whole Free Democrat Party Over the whole parliamentary term the FDP had been in self destruction mode Backstabbing lack of direction and a disastrous communications strategy all contributed to the decline of a once proud party When Merkel then refused to endorse the FDP before the election it sealed the party s fate It missed the electoral threshold by 0 2 per cent of the vote If only every 200th Merkel voter had decided to switch support to the FDP the party would have survived in parliament and with it Angela Merkel s old coalition government Now she needs a different partner This is what will substantially weaken her position In all likelihood Merkel s Christian Democrats are headed for a coalition with the Social Democrats the so called Grand Coalition which Merkel already headed in her first term from 2005 until 2009 It would be grand indeed because it has the support of 503 MPs in a parliament of 630 leaving only the Greens 63 and the post communist Left 64 in opposition Though such a large majority certainly makes passing legislation a breeze for any chancellor this comfortable majority could be a boomerang for Chancellor Merkel First of all she can no longer pretend that she needed to take some obscure eurosceptical backbenchers into consideration Even a larger revolt within her own party would be tolerable given her super strong majority More importantly though her potential Social Democrat coalition partner is far more relaxed about granting bailouts to other European countries and has in the past occasionally argued for the introduction of eurobonds jointly guaranteed bonds by European governments The Social Democrats are also critical of austerity policies for the European periphery and have more in common with the Keynesian positions of French President François Hollande than Chancellor Merkel As a taste of things to come prominent Social Democrat Martin Schulz who is also president of the European Parliament just announced that as a price for any coalition agreement Merkel would have to give up her policies on Europe Merkel will not be able to continue her policies Schulz told news magazine Der

    Original URL path: http://www.businessspectator.com.au/article/2013/9/26/politics/merkels-victory-will-blunt-her-sword (2014-01-12)
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  • Merkel, and the end of an 'ever closer' EU | Business Spectator
    of the past years have meant a constant assault on national sovereignty and a transfer of power from the member states to the European Union and its agencies these shifts were mainly driven by economic necessity There was no great political enthusiasm across Europe for new institutions like the European Stability Mechanism nor the European Central Bank s activities let alone the European Commission s greater role A few weeks ago Merkel gave an interview to German national radio in which she said We discuss if we need even more competencies for Europe However we can also consider whether we can give something back It was a typical Merkel statement vague but hinting at what she is really thinking It may well signify a change of direction for the European Union From the beginning of European integration the process of European politics has been a one way street Power was gradually shifted towards the European level never the other way around An ever closer union was the motto Today the future of European integration looks less certain not just because of Merkel s cryptic remarks The years of crisis have led to a growing disillusionment with the European project They have also estranged former allies from each other Though it would be premature to proclaim a return to the nation state in Europe it is likely that we will witness a hollowing out of the European Union in coming years The interests of member states are far too diverse to be reconciled The only chance European politicians have to save the European Union is to cut back its reach Earlier this year British Prime Minister David Cameron promised a referendum on Britain s continued membership in a reformed European Union Cameron said he wanted to remain in Europe but only if the European Union changed which to him meant if London could repatriate some powers from Brussels Cameron s problem is that in order to change the European treaties he needs allies Britain cannot single handedly change the rules of the EU game If it isn t happy with the current state of affairs but the other members were the only option for Britain would be to pull out completely However it appears that Britain s dissatisfaction is at least partly shared on the continent France s President François Hollande has repeatedly criticised the European Union and the European Commission for interfering with what he regards as internal affairs Now that Merkel has also signalled that she is willing to discuss the balance of power between the national and the European levels of government the door is opened for a serious debate In the past Britain Germany and France have seldom pulled in the same direction on Europe Their economic policies were often incompatible their foreign policy outlooks too diverse If these three heavyweights are seriously considered curbing EU powers it would signify a break from previous policies And it makes a lot of sense Within the European Union Britain is Germany s most likely ally in economic questions and vice versa They both share a similar approach to economic policy that is much more liberal than say France s or Italy s Merkel cannot wish Britain to depart from the European Union and leave the Germans alone with the rest Britain may have made a lot of noise about its frustrations but it is not in Britain s interest to pull out completely and leave burnt bridges behind Despite being outside the eurozone London is Europe s most important financial centre If Britain left the EU London s position would be threatened by other places most notably Paris and Frankfurt The fear in the City of London is that once Britain had pulled out the EU would retaliate with an attack on the British financial services sector So Germany has an interest in keeping Britain in Europe and Britain certainly needs to remain part of the European common market The best way to achieve this is to change the nature of the European Union in a way that would allow Britain to continue its membership But this would necessitate a weaker European Union Convincing other European countries of the need to curtail the EU s powers may not be hard Crisis countries in particular resent receiving austerity diktats from Brussels The EU and its Commission have lost popularity which is precisely why Hollande is also campaigning against Brussels It would be a major change of direction for Germany and France to reverse the decades long process of integration For Merkel it would mean a break with her country s and her own party s long held positions But it makes good sense for her do so It is not just the euro crisis that had been put on hold by the political considerations linked to the German elections but the whole question of the future of the EU Following September 22 the cards will be reshuffled in Europe irrespective of the outcome of Germany s election Dr Oliver Marc Hartwich is the executive director of The New Zealand Initiative Print this page More from Oliver Marc Hartwich 09 Jan Athens 2014 is not Sarajevo 1914 21 Nov Silent assassins chase German savers 14 Nov Rates of wrath Why the EU needs real reform 07 Nov Don t put Germany on the economic axis of evil 31 Oct I spy the demise of the Old West alliance Related articles 12 Jan Obama picks Fed vice chair 11 Jan US jobs growth slows sharply 10 Jan Korea China jostle for Aust resources 10 Jan China trade balance contracts 10 Jan New home sales lift in November More from Business Spectator Technology Adapt or die Commercial The Future of Energy Family Business Alan Kohler s Family Business China China Spectator Please log in or register to post comments Comments on this article Comments Policy Tony Holland Thu 2013 09 12 08 11 Indeed we are all waiting to see what happens when

    Original URL path: http://www.businessspectator.com.au/article/2013/9/12/economy/merkel-and-end-ever-closer-eu (2014-01-12)
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