Posts Tagged ‘Italy’
Liquidity is meant for the Internal market. Competitiveness is for External market?
Posted April 16, 2014
on:Liquidity is meant for the Internal market. Competitiveness is for External market?
Should the level of “Life-Style” be the same among the competitive and the challenged productive states within a Union?
This is not a fair condition to impose on States that managed to sacrifice and work hard for better life conditions.
States in financial crisis must have ready lists of 4 categories of enterprises:
1. The public institutions that are critical in the smooth transmission of liquidity to the various economic sectors
2. The mixed State/Private entities that have locations in many regions of the State and employ many citizens
3. The nationwide private companies
4. The medium and small productive companies that serve their local provinces
It is well know that medium and small productive companies constitute 70% of State production that cater for the internal market needs.
Any shortage in liquidity in these small private companies and employment hit the roof and the citizens experience shortages in most commodities.
Giving priority to the local economies in the distribution (infusion) of liquidity is the first step in preventing mass unemployment.
There are public economic sectors that cater to the general public needs, such as energy, water and transportation… and the stabilization of these functional sectors in matter of maintenance is another urgent priority.
Before the internal market is reinvigorated and underway, it is of no use planning for the export sections to external markets in order to get the influx of “hard currencies”
Stability and security are the basis for a shift toward State development.
Having the autonomy to print money in period of liquidity shortage is the key for stabilizing the internal market.
The disadvantage resides in the society structure that favor the oligarchy and wealth disparity that eliminate the benefit of printing more money.
The crisis in Greece, Ireland, Portugal, Spain and Italy have demonstrated that it is a priority that a State has to reform its public service institutions to discard redundant and politically influenced service appointments.
Without a drastic realization that the political structure should be reformed, and for actually feel the pain associated with uneven equal rights to jobs and opportunities in the institutions, all the remaining reforms will be within the “patching” process.
The crisis in Greece was deep rooted because it lacked the two preconditions: Lousy political structure and not having the right to print money.
Ireland, Portugal, Spain and Italy had political structures that could remedy to the “unfairly” political conditions and to reform the system within the single Euro currency.
The EU has learned the lesson:
1. First, the State that asks to join the union zone must demonstrate that it is serious to undertake political reforms and the structure be designed to react in timely manners to situations of political reforms.
Many States have been included based on historical and ideological “myths” that didn’t match their current unstable realities.
The EU dominant responsibility is to gradually transform the States who applied to join the union into politically viable structure.
The States in waiting must acknowledge that it takes time to achieve stable and valid political structure.
How a poor and unstable State can become competitive in the external market? This is an impossible condition to withhold liquidity infusion that is meant to support local companies.
The “productively challenged States” in the Euro zone should not expect the same level of life-style as the most competitive among them.
And equal rights in life-style is not an equitable and sustainable demand on State basis.
The Euro of the European Union (EU) currency is witnessing healthy devaluation compared to the dollar and needs to be lower to arond 1.1 to the dollar. The increasing difficulties experienced by many States in the EU result from initial weaker economies that could not compete efficiently in the European common market and then were buffeted by the US financial crisis. The European and international financial and political medias are breaking the taboo of discussing whether maintaining the Euro is a viable alternative in the short term.
The arguments of the group that staunchly defends the Euro is mostly based on political reasons: To them it is becoming a matter of safeguarding dignity and sovereignty. It beieves that the Euro is the major factor in the reconstruction of the European market and for the political stability and the cohesion of the European market. This group would like you to believe that without the Euro there would be no EU.
The taboo breaker group believes that the EU is in dire difficulty because it prematurly created a common currency before ironing out and strengthening common politics. Germany and its satellites States in the northern hemisphere benefited most from the Euro since their currencies were highly overvalued “stronger” than the Euro and thus, they managed to compete better and export more to the European common market.
The other States in the Union could not deal with a Euro that was much overvalued compared to their national currencies and thus, had to suffer in market competition. The financial and economic commotions in Greece, Ireland, Portugal, and Spain are symptoms of the financial and economic imbalance with respect to the vaster and stronger economies in Germany, France, and Italy. This group believes that the EU is heading toward a deflationary period within a couple of years if no structural institutions are installed.
The main source of imbalance is that the original six States in the Union had firmir and better tested administrative and political instituions that could apply regulations agreed on and the capability to supervise and monitor laws and regulations governing the union members. The weaker States are at great disadvantage: The main powerful States in the union have no confidence in the resilient determination of the weaker States to effectively executing the agreed upon regulations and second, the weaker States are prohibited to issuing (printing money) to satisfy liquidity in their internal trade and commerce.
It is not the Euro that created the common European market: the EU was already instituted and functioning well before the common currency was created on political grounds. The Euro was mainly to be the material “symbol” of the Union and this symbol degenerated into a calamity at the first major problem. The EU could have imagined much less costly symbols for its unification until political coherence was firmly established, tested, and thoroughly evaluated.
The Maastricht treaty set limits to budget deficit below 3% and public deficit below 60%. Currently, only Spain has kept its public debt at 54% and Germany its budget debt at 3.3%. The remaining States in the Euro have doubled and even tripled both limits. Joblessness is very bad all over the Euro zone averaging 10%; Spain has 20% and Ireland and Greece about 14%.
It seems to me that the Euro has encourage many mafia type “economies” to expand simply because it became much easier to transfer a unique currency and circumventing further money exchange regulations and constraints.
The financial institutions and the medias are sending waves of terrors claiming that there is lack of confidence in the Euro; they claim that this confidence is so low that investors are shirking the Euro zone States. I believe that the Euro should stay but be restricted to the main large economies such as Germany, France, Italy, Spain, Holland, Danmark, and Norway where the same homogeneous spirit for taking seriously the application of financial and economic regulations among the member States.
The other weaker States should have an alternative common currency, far devalued from the Euro and backed by the Euro until political coherence and institutions are equalized in efficiency and modernity. The weaker States should enjoy the privilege of pre-empting slow internal trade by issuing liquidity in the newer common currency within limits.
Currently, this Teutonic vital space of Germany is at work from an economical perspective after the fall of the Berlin Wall. Germany export is mostly oriented toward the eastern vast States that recaptured their independence from the Soviet Union in 1990. Germany would have rather have its own European Union formed of Holland, Danmark, Sweden, Poland, Tchekoslovakia, Austria, and Ukraine. The western European States and Greece are just added burden that Germany feels it was pressured to supporting. Probably, the European Union might adopt a second currency (alongside the Euro) just for internal trade purposes among the European States. The internal trade currency could be labelled “Euro E” referring to the eastern European States so that the current Euro, implicitely a “Euro W” referring to the western European States, be mainly used for external trades outside the EU boundries.
Bi-Weekly Report (#15) on Lebanon and the Near East (April 2, 2009)
There are a few good news. First, The Italian government finally delivered a scientifically equipped ship to the Lebanese Council for Scientific Research in order to study the Lebanese 200 km of coastal water characteristics. This ship named Qana-CNRS was 18 months in the making and Italy will send marine scientists and technologists to train the Lebanese counterparts. Lebanon has signed international agreements to investigate and remedy maritime ecosystems.
Second, the Academic Scientists of Lebanon has met for another opening ceremony in the Princeton Club in New York. I was under the impression that this council was already functional and active and has gone beyond media opening ceremonies a year ago. It finally got a license in the USA. This scientific council was in the organization stage since late Rafic Hariri PM. It will hold a discussion group this autumn in Lebanon. Four more members from Lebanon proper are contemplated to be included. The goal of this academy is to stand tall against the Israeli academy in the Middle East.
Professor Edgar Chouweiry is heading this council; he is a head director at Princeton University for physical research. The council members include Michael Attiyeh, director of mathematics at Cambridge University; Jean-Francois Bach, Professor of immunology at Necker Hospital in Paris; George Bahr, Professor of virology at the Balamand University in Lebanon; Andre Cabron, ex-Professor of immunology at the Pasteur Institute; Michel Dercour, professor at Piere and Mary Curie University; Mohammad Al Hassan, head of the African academy of sciences; Joan Nasr Allah, Professor of plants at Cornel University; Mouna Nemer, head director of cells at the Ottawa University; Eve Kirie, head at the French Politecnique University; Edward Simon, astrophysist at Villanova University; Professor Samir Zard, director of biology in France; Professor Hussein Zabeeb, mechanics of material at Washington State University; and Professor Charles Elachy, director at Jet propulsion laboratory in Passadena.
Among the attendees at the ceremony were many scientists, entrepreneurs, and surgeons such as: biochemist Wadih Jreidiny, Jack Merheb, Ray Debbany, Wael Shehab, Salah Selman, Cesar Shedyac, George Lotfy, George Fares, Nichola Khoury, Edgar El Shaar, Nada Aneed, George Younane, Ghasan Abu 3Alfa, and Nabil Housami.
The third good news is that President Suleiman offered Lebanon to be the liaison among the Arab States and the South American States for economic development and cooperation since the Lebanon emigrants enjoys large presence in South America. More probably, the liaison will be jointly undertaken by Syria and Lebanon since Syria has as many emigrants as Lebanon there.
The fourth good news is that the South American head of States met with the Arab head of States in Qatar and the process is being formalized on regular basis.
Syria has appointed an ambassador to Lebanon Ali something Ali.
General Aoun is confident that he would gather 35 deputies in the next election on June 7; the interviewer was skeptic.
Geaja slept over in Zahle to drum up supporters; Amine Gemayel joined him: he would like to share recognition for any kind of leadership.
A US Intelligence report predicts that the State of Israel will cease to exist within 20 years. It seems that there are over 2 millions Israelites with at least US residency status and most of them will be heading to the USA as the world economy stabilizes. There are also over 2 millions Israelites with European citizenships and they too will be residing in their States of origin and Europe in general. The level-headed Israeli Jews have finally realized that the Zionist ideology never contemplated a peaceful and stable state with its neighboring States. All the successive Israeli governments’ policies and actions never offered any willingness to co-exist with the Near Eastern populations.