There are mounting concerns now about the effects of a harsh winter on the German economy (the irony that global warming might be a good thing here should not be lost on us) but the political issue is that economic weakening will help the AfD's narrative just when it is ready to break out of its East German ghetto and become a player in 'West Germany'. The fiscal crisis in France is cross-linked to this insofar as a serious economic meltdown there (looking more likely by the day) might have to rely on German assistance that might no longer be readily available.
The answer to the question is that the Eurozone remains fundamentally economically successful but that success is moving from the traditional centre to the periphery - northwards, eastwards and southwards - with the rest of the Eurozone members becoming cautious about policy decisions at the 'centre' unravelling that progress. Poland, Italy and Spain in particular are becoming independent powers again in their own right while still committed to the Holy European Empire as framework.
However, the real challenge is that a combination of technocratic regulation and poor productivity as well as the effects of the sometimes idiotic rolling in of hawkish Northern Europeans behind NATO strategy means that the changes necessary to ensure participation in the incoming digital productivity revolution are not taking place. The advocates of productivity reforms like Draghi are effectively being ignored at the higher level because of the defensive political behaviour of national liberal elites while there is no effective central planning capacity like that in China or implicit in the American military-industrial complex.
It gets worse - the Net Zero drive seems to have simply created a market for Chinese product instead of giving (as hoped) Europe the leading edge in green technologies. The European wind power manufacturing sector is deeply troubled. Energy costs are far higher than they should be for energy intensive industries which were Germany's strength and the German auto industry is rapidly back-tracking from green commitments (and wanting the authorities to assist in this) out of desperation.
One way out might be 'military Keynesianism' but this depends on confrontation and voters are not so keen on that. It will take decades to create the sort of techno-innovative military-industrial capacity. The Americans and Chinese (even the Russians) are way ahead on this. Defence strategy just ends up seeing European taxpayers pouring money into Trump's America and getting the leavings. Finland has ordered ice breakers - some of these will be built in Finland but most in the US so the taxpayer is essentially subsidising US jobs out of fear. The Germans and French are squabbling over advanced fighter jet production and the rival operation involving Italy also includes the UK and Japan who are outside the EU.
The only way out might be increased European integration but the European Commission is dysfunctional except as neurotic regulator along French lines. It could take a long time to get the political capital for further integration while the populist and a rising radical Left snap at the heels of centrists. French technocracy works in France on paper because France was already an integral state but even that is crumbling on fiscal mismanagement. Europe is not such an integral state so that the application of French technocracy (which worked well until this century when the EU was smaller) merely stifles innovation and (given the political aspects of the digital revolution) drives populism and resentment.
It is an 'almighty mess'. Yet the base economy (taken as a whole) is doing well. Europe would be one of the three major 'superpowers' (far more powerful than Russia) if it ever got its act together. Unfortunately getting there under current elite leaderships might be something we should not wish for given those leaderships' defensive, paranoiac and authoritarian tendencies.
Thank you for this analysis, Tim, which could almost end up being a post in its own right.
So thinking about the periphery ("northwards, eastwards and southwards") - what are they doing right which the core flails? There are some strong differences among these nations.
Very much so - as there are between the economies of US States and, like the US, they tend to break down into natural regions. The main ones are the Mediterranean, the North West Atlantic (broken by Brexit but crossing over increasingly into the next one in line), Nordic-Baltic (which is shifting from being German-dominated to become more 'Atlantic' but with Poland increasingly significant and attached), East Central Europe (which has more energy/trading affinities with Russia), Romania and the Balkans (still a bit 'Wild East' and which the Franco-German core thinks it can handle) and the old Franco-Benelux-German core which seems to be fissuring into France and Germany having separate trajectories post-SMO.
This is all very fluid but politics follows economics. There are many small country anomalies - Ireland is bound equally to the UK and EU, Switzerland is notionally independent but drawn increasingly into the orbit of the whole, Serbia and some other states cannot decide which bloc to align with. As to what is done right, it depends on local historical conditions - some are still rising from a lower historical base (very rapidly in the case of Poland), some maintain a sufficient commitment to welfarism that keeps money floating within the system without crushing entrepeneurialism, some are more entrepreneurial than others despite regulatory drives at the centre, some never got to the point of French sclerosis or German industrial vulnerability.
"Indian-Americans are a powerful special interest group in America politics with special significance in high technology" - and the GOP is split over this. One wing, pro-tech and -business, loves the Indian population as a success story, the American Dream well told. The other faction combines law and order mentality with resentment of Silicon Valley (check Josh Hawley's jeremiad against AI).
Not to be reductionistic, but these two words seem to neatly capture the whole of it: "almighty mess".
Durov is the smartest commtech player on the board. Personally, I'm fine with going back to PGP decentralised networks. Alt social tech coming out of crypto backed communities is gaining traction as the networks mature on all levels. EU Commission and its well paid hydra enabling total info control ends up insanely coming down to outlawing _all_ communication that is not databased for AI access by Authorities.
If Signal and Telegram cave in we have Session. No phone number needed. There's quite a few others, but Session looks favorite. I'll try it and see. That's the thing, restrict the internet and messengers, ever more private solutions will be developed.
"German deindustrialisation and fiscal crises in France (and the UK)" - where are the Eurozone's economic strengths now, Italy?
Whomever manages to sneak in linkage to BRICS Clear-Pay system.
There are mounting concerns now about the effects of a harsh winter on the German economy (the irony that global warming might be a good thing here should not be lost on us) but the political issue is that economic weakening will help the AfD's narrative just when it is ready to break out of its East German ghetto and become a player in 'West Germany'. The fiscal crisis in France is cross-linked to this insofar as a serious economic meltdown there (looking more likely by the day) might have to rely on German assistance that might no longer be readily available.
The answer to the question is that the Eurozone remains fundamentally economically successful but that success is moving from the traditional centre to the periphery - northwards, eastwards and southwards - with the rest of the Eurozone members becoming cautious about policy decisions at the 'centre' unravelling that progress. Poland, Italy and Spain in particular are becoming independent powers again in their own right while still committed to the Holy European Empire as framework.
However, the real challenge is that a combination of technocratic regulation and poor productivity as well as the effects of the sometimes idiotic rolling in of hawkish Northern Europeans behind NATO strategy means that the changes necessary to ensure participation in the incoming digital productivity revolution are not taking place. The advocates of productivity reforms like Draghi are effectively being ignored at the higher level because of the defensive political behaviour of national liberal elites while there is no effective central planning capacity like that in China or implicit in the American military-industrial complex.
It gets worse - the Net Zero drive seems to have simply created a market for Chinese product instead of giving (as hoped) Europe the leading edge in green technologies. The European wind power manufacturing sector is deeply troubled. Energy costs are far higher than they should be for energy intensive industries which were Germany's strength and the German auto industry is rapidly back-tracking from green commitments (and wanting the authorities to assist in this) out of desperation.
One way out might be 'military Keynesianism' but this depends on confrontation and voters are not so keen on that. It will take decades to create the sort of techno-innovative military-industrial capacity. The Americans and Chinese (even the Russians) are way ahead on this. Defence strategy just ends up seeing European taxpayers pouring money into Trump's America and getting the leavings. Finland has ordered ice breakers - some of these will be built in Finland but most in the US so the taxpayer is essentially subsidising US jobs out of fear. The Germans and French are squabbling over advanced fighter jet production and the rival operation involving Italy also includes the UK and Japan who are outside the EU.
The only way out might be increased European integration but the European Commission is dysfunctional except as neurotic regulator along French lines. It could take a long time to get the political capital for further integration while the populist and a rising radical Left snap at the heels of centrists. French technocracy works in France on paper because France was already an integral state but even that is crumbling on fiscal mismanagement. Europe is not such an integral state so that the application of French technocracy (which worked well until this century when the EU was smaller) merely stifles innovation and (given the political aspects of the digital revolution) drives populism and resentment.
It is an 'almighty mess'. Yet the base economy (taken as a whole) is doing well. Europe would be one of the three major 'superpowers' (far more powerful than Russia) if it ever got its act together. Unfortunately getting there under current elite leaderships might be something we should not wish for given those leaderships' defensive, paranoiac and authoritarian tendencies.
Thank you for this analysis, Tim, which could almost end up being a post in its own right.
So thinking about the periphery ("northwards, eastwards and southwards") - what are they doing right which the core flails? There are some strong differences among these nations.
Very much so - as there are between the economies of US States and, like the US, they tend to break down into natural regions. The main ones are the Mediterranean, the North West Atlantic (broken by Brexit but crossing over increasingly into the next one in line), Nordic-Baltic (which is shifting from being German-dominated to become more 'Atlantic' but with Poland increasingly significant and attached), East Central Europe (which has more energy/trading affinities with Russia), Romania and the Balkans (still a bit 'Wild East' and which the Franco-German core thinks it can handle) and the old Franco-Benelux-German core which seems to be fissuring into France and Germany having separate trajectories post-SMO.
This is all very fluid but politics follows economics. There are many small country anomalies - Ireland is bound equally to the UK and EU, Switzerland is notionally independent but drawn increasingly into the orbit of the whole, Serbia and some other states cannot decide which bloc to align with. As to what is done right, it depends on local historical conditions - some are still rising from a lower historical base (very rapidly in the case of Poland), some maintain a sufficient commitment to welfarism that keeps money floating within the system without crushing entrepeneurialism, some are more entrepreneurial than others despite regulatory drives at the centre, some never got to the point of French sclerosis or German industrial vulnerability.
"Indian-Americans are a powerful special interest group in America politics with special significance in high technology" - and the GOP is split over this. One wing, pro-tech and -business, loves the Indian population as a success story, the American Dream well told. The other faction combines law and order mentality with resentment of Silicon Valley (check Josh Hawley's jeremiad against AI).
Not to be reductionistic, but these two words seem to neatly capture the whole of it: "almighty mess".
Durov is the smartest commtech player on the board. Personally, I'm fine with going back to PGP decentralised networks. Alt social tech coming out of crypto backed communities is gaining traction as the networks mature on all levels. EU Commission and its well paid hydra enabling total info control ends up insanely coming down to outlawing _all_ communication that is not databased for AI access by Authorities.
If Signal and Telegram cave in we have Session. No phone number needed. There's quite a few others, but Session looks favorite. I'll try it and see. That's the thing, restrict the internet and messengers, ever more private solutions will be developed.
https://getsession.org/