Stratfor.com: „Assessing the Damage of the European Banking Crisis”

Text+grafica+analiza+sursa informationala: Stratfor.com

Europe faces a banking crisis it has not wanted to admit even exists.

The formal authority on financial stability, International Monetary Fund (IMF) chief Christine Lagarde, made her institution’s opinion on European banking known back in August when she prompted the European Union to engage in an immediate 200 billion-euro bank recapitalization effort. The response was broad-based derision from Europeans at the local, national and EU bureaucratic levels. The vehemence directed at Lagarde was particularly notable as Lagarde is certainly in a position to know what she was talking about: Until July 5, her title was not IMF chief, but French finance minister. She has seen the books, and the books are bad. Due to European inaction, the IMF on Oct. 18 raised its estimate for recapitalization needs from 200 billion euros to 300 billion euros ($274 billion to $410 billion).

Sovereign Debt: The Expected Problem

The collapse in early October of Franco-Belgian bank Dexia, a large Northern European institution whose demise necessitated a state rescue, shattered European confidence. Now, Europeans are discussing their banking sector. A meeting of eurozone ministers Oct. 21 is largely dedicated to the topic, as is the Oct. 23 summit of EU heads of government. Yet European governments continue to consider the banking sector largely only within the context of the ongoing sovereign debt crisis.

This is exemplified in Europeans’ handling of the Greek situation. The primary reason Greece has not defaulted on its nearly 400-billion euro sovereign debt is that the rest of the eurozone is not forcing Greece to fully implement its agreed-upon austerity measures. Withholding bailout funds as punishment would trigger an immediate default and a cascade of disastrous effects across Europe. Loudly condemning Greek inaction while still slipping Athens bailout checks keeps that aspect of Europe’s crisis in a holding pattern. In the European mind — especially the Northern European mind — a handful of small countries that made poor decisions are responsible for the European debt crisis, and while the ensuing crisis may spread to the banks as a consequence, the banks themselves would be fine if only the sovereigns could get their acts together.

This is an incorrect assumption. If anything, Europe’s banks are as damaged as the governments that regulate them.

When evaluating a problem of such magnitude, one might as well begin with the problem as the Europeans see it — namely, that their banks’ biggest problem is rooted in their sovereign debt exposure.

The state-bank contagion problem is fairly straightforward within national borders. As a rule the largest purchaser of the debt of any particular European government will be banks located in the particular country. If a government goes bankrupt or is forced to partially default on its debt, its failure will trigger the failure of most of its banks. Greece does indeed provide a useful example. Until Greece joined the European Union in 1981, state-controlled institutions dominated its banking sector. These institutions’ primary reason for being was to support government financing, regardless of whether there was a political or economic rationale justifying that financing. The Greeks, however, have no monopoly on the practice of leaning on the banking sector to support state spending. In fact, this practice is the norm across Europe.

Spain’s regional banks, the cajas, have become infamous for serving as slush funds for regional governments, regardless of the government in question’s political affiliation. Were the cajas assets held to U.S. standards of what qualifies as a good or bad loan, half the cajas would be closed immediately and another third would be placed in receivership. Italian banks hold half of Italy’s 1.9 trillion euros in outstanding state debt. And lest anyone attempt to lay all the blame on Southern Europe, French and Belgian municipalities as well as the Belgian national government regularly used the aforementioned Dexia in a somewhat similar manner.

Yet much debt remains for outsiders to own, so when states crack, the damage will not be held internally. Half or more of the debt of Greece, Ireland, Portugal, Italy and Belgium is in foreign hands, but like everything else in Europe the exposure is not balanced evenly — and this time, it is Northern Europe, not Southern Europe, that is exposed. French banks are more exposed than any other national sector, holding an amount equivalent to 8.5 percent of French gross domestic product (GDP) in the debt of the most financially distressed states (Greece, Ireland, Portugal, Italy, Belgium and Spain). Belgium comes in second with an exposure of roughly 5.5 percent of GDP, although that number excludes the roughly 45 percent of GDP Belgium’s banks hold in Belgian state debt.

When Europeans speak of the need to recapitalize their banks, creating firebreaks between cross-border sovereign debt exposure dominates their thoughts — which explains why the Europeans belatedly have seized upon the IMF’s original 200 billion-euro figure. The Europeans are hoping that if they can strike a series of deals that restructure a percentage of the debt owed by the Continent’s most financially strapped states, they will be able to halt the sovereign debt crisis in its tracks.

This plan is flawed. The figure, 200 billion euros, will not cover reasonable restructurings. The 50 percent writedowns or “haircuts” for Greece under discussion as part of a revised Greek bailout — likely to be announced at the end of the upcoming Oct. 23 EU summit — would absorb more than half of that 200 billion euros. A mere 8 percent haircut on Italian debt would absorb the remainder.

Moreover, Europe’s banking problems stretch far beyond sovereign debt. Before one can understand just how deep those problems go, we must examine the role European banks play in European society.

The Centrality of European Banking

Several differences between the European and American banking sectors exist. By far the most critical difference is that European banks are much more central to the functioning of European economies than American banks are to the U.S. economy. The reason is rooted in the geography of capital.

Maritime transport is cheaper than land transport by at least an order of magnitude once the costs of constructing road and rail infrastructure is factored in. Therefore, maritime economies will always have surplus capital compared to their land transport-based equivalents. Managing such excess capital requires banks, and so nearly all of the world’s banking centers form at points on navigable rivers where capital richness is at its most extreme. For example, New York is where the Hudson meets the Atlantic Octen, Chicago is at the southernmost extremity of the Great Lakes network, Geneva is near the head of navigation of the Rhone, and Vienna is located where the Danube breaks through the Alps-Carpathian gap.

Unity differentiates the U.S. and European banking system. The American maritime network comprises the interconnected rivers of the Greater Mississippi Basin linked into the Intracoastal Waterway, which allows for easy transport from the U.S.-Mexico border on the Gulf of Mexico all the way to the Chesapeake Bay. Europe’s maritime network is neither interlinked nor evenly shared. Northern Europe is blessed with a dozen easily navigable rivers, but none of the major rivers interconnect; each river, and thus each nation, has its own financial capital. The Danube, Europe’s longest river, drains in the opposite direction but cuts through mountains twice in doing so. Some European states have multiple navigable rivers: France and Germany each have three major ones. Arid and rugged Spain and Greece, in contrast, have none.

The unity of the American transport system means that all of its banks are interlinked, and so there is a need for a single regulatory structure. The disunity of European geography generates not only competing nationalities but also competing banking systems.

Moreover, Americans are used to far-flung and impersonal capital funding their activities (such as a bank in New York funding a project in Nebraska) because of the network’s large and singular nature. Not so in Europe. There, regional competition has enshrined banks as tools of state planning. French capital is used for French projects and other sources of capital are viewed with suspicion. Consequently, Americans only use bank loans to fund 31 percent of total private credit, with bond issuances (18 percent) and stock markets (51 percent) making up the balance. In the eurozone roughly 80 percent of private credit is bank-sourced. And instead of the United States’ single central bank, single bank guarantor and fiscal authority, Europe has dozens. Banking regulation has been expressly omitted from all European treaties to this point, instead remaining a national prerogative.

As a starting point, therefore, it must be understood that European banks are more central to the functioning of the European system than American banks are to the American system. And any problems that might erupt in the world of European banks will face a far more complicated restitution effort cluttered with overlapping, conflicting authorities colored by national biases.

Demographic Limitations

European banks also face less long-term growth. The largest piece of consumer spending in any economy is done by people in their 20s and 30s. This cohort is going to college, raising children and buying houses and cars. Yet people in their 20s and 30s are the weakest in terms of earning potential. High consumption plus low earning leads invariably to borrowing, and borrowing is banks’ mainstay. In the 1990s and 2000s much of Europe enjoyed a bulge in its population structure in precisely this young demographic — particularly in Southern European states — generating a great deal of economic activity, and from it a great deal of business for Europe’s banks.

But now, this demographic has grown up. Their earning potential has increased, while their big surge of demand is largely over, sharply curtailing their need for borrowing. In Spain and Greece, the younger end of population bulge is now 30; in Italy and France it is now 35; in Austria, Germany and the Netherlands it is 40; and in Belgium it is 45. Consumer borrowing in general and mortgage activity in particular probably have peaked. The small sizes of the replacement generations suggests there will be no recoveries within the next few decades. (Children born today will not hit their prime consumptive age for another 20 to 30 years.) With the total value of new consumer loans likely to stagnate (and more likely, decline) moving forward, if anything there are now too many European banks competing for a shrinking pool of consumer loans. Europe is thus not likely to be able to grow out of any banking problems it experiences. The one potential exception is in Central Europe, where the population bulges are on average 15 years younger than in Western Europe. The younger edge of the Polish bulge, for example, is only 25. In time, these states may be able to grow out of their problems. Either way, the most lucrative years for Western European banking are over.

Too Much Credit

Germany has extremely high capital accumulation and extremely competent economic management. One of the many results of this pairing is extremely inexpensive capital costs. When Germans — governments, corporations or individuals — borrow money, it is accepted as a near-fact that they will pay back what they owe, on time and in full. Reflecting the high supply and low risk, German borrowing rates for governments and corporations have long been in the low to mid single digits.

The further you move from Germany the less this pattern holds. Capital availability shrivels, management falters and the attitude toward contract law (or at least as defined by the Germans) becomes far less respectful. As such, Europe’s peripheral economies — most notably its smaller peripheral economies — have normally faced higher borrowing costs. Mortgage rates in Ireland stood near 20 percent less than a generation ago. Government borrowing rates in Greece have in the past topped 30 percent.

With that sort of difference, it is not difficult to see why many European states have striven for inclusion in first, the European Union, and second, the eurozone. Each step of the European integration process has brought them closer in financial terms to the ultra-low credit costs of Germany. The closer the German association, the greater the implicit belief that German financial resources would help them in a crisis (despite the fact that EU treaties explicitly rejected this).

The dawn of the eurozone era prompted lenders and investors to take this association to an extreme. Association with Germany shifted from lower lending rates to identical lending rates. The Greek government could borrow at rates that only Germany could demand in the past. Irish borrowers were able to qualify for 130 percent mortgages at 4 percent. Compounding matters, the collapse of borrowing costs and the explosion of loan activity occurred at the same time as Southern Europe’s demographic-driven consumption boom. It was the perfect storm for explosive banking growth, and it laid the groundwork for a financial collapse of unprecedented proportions.

Drastic increases in government debt are the most publicly visible outcome, but it is far from the only one. The least visible outcome is that extraordinarily cheap credit to consumers triggers an explosion in demand that local businesses cannot hope to fill. The result is unprecedented trade deficits as money borrowed from foreigners is used to purchase foreign goods. Cyprus, Greece, Portugal, Bulgaria, Romania, Lithuania, Estonia and Spain — all states whose cheap labor when compared to the Western European core should encourage them to be massive exporters — instead have run chronic trade deficits in excess of 7 percent of GDP. Most routinely broke 10 percent. Such developments do not directly harm the banks, but as credit costs return to more rational levels — and in the ongoing debt crisis borrowing costs for most of the younger EU members have tripled and more — consumption is coming to a halt. In the few European markets that demographically may be able to generate consumption-based growth in the years ahead, credit is drying up.

Foreign Currency Risk

Much of this lending into weaker locations was carried out in foreign currencies. For the three states that successfully made the early sprint into the eurozone — Estonia, Slovenia and Slovakia — this was a nonfactor. For those that did not make the early leap into the eurozone it was a wonderful way to get something for nothing. Their association with the European Union resulted in the steady strengthening of their currencies. Since 2004, the Polish, Czech, Romanian and Hungarian currencies gained roughly one-third versus the euro, driving down the monthly payments on any euro-denominated loan. That inverted, however, in the 2008 financial crisis. Then, every regional currency but the Czech koruna (and Bulgarian lev, which is pegged to the euro) gave back their gains. For Central Europeans who had taken out loans when their currencies were at their highs, payments ballooned. More than 10 percent of Polish and Hungarian mortgages are now delinquent, largely because of currency movements.

New Banking ‘Empires’

The cheap credit of the eurozone’s first decade allowed several peripheral European states a rare opportunity to expand their network of influence, even if they were not in the eurozone themselves. They could borrow money from core European banking centers like Germany, France, Switzerland and the Netherlands and pass that money on to previously credit-starved markets. In most cases, such credit was offered without the full cost-increase that these states’ poorer and smaller statures would have justified. After all, these would-be financial centers had to undercut the more established European financial centers if they were to gain meaningful market share. This pushed far more credit into Central Europe than the region otherwise would have attracted, speeding up the development process at the cost of poor underwriting and a proliferation of questionable lending practices. The most enthusiastic crafters of new banking empires have been Sweden, Austria, Spain and Greece.

  • Sweden has the happiest record of any of the states that engaged in such expansionary lending. Being one of the richest countries in Europe and yet not being a member of the eurozone, Sweden did not experience a credit expansion nearly as much as other states, instead it served as a conduit for that credit — augmented by its own — to its former imperial territories. Alone among the forgers of new banking empires, Sweden’s superior financial stability has allowed it (so far) to continue financial activities in its target markets — Estonia, Latvia, Lithuania and Denmark — despite the ongoing financial crisis. But instead of lending, Swedish banks are now purchasing regional banks outright. Swedish command of the Danish banking sector, for example, has increased by 80 percent since the crisis. Through its new local subsidiaries, Swedish banks now lend more in per capita terms to Danes than they do to their own citizens, and there is no longer a domestic Estonian banking sector — it is 97 percent Swedish-owned. Such expansionary activity is likely to continue so long as Sweden can sustain it, as there is a geopolitical angle to Sweden’s effort: It is seeking to deepen its regional influence not only for economic purposes, but also to mitigate the rising role of its longtime competitor, Russia.
  • Austria has tapped not only eurozone credit but also taken advantage of favorable carry trades to serve as a conduit for Swiss franc credit into Central Europe. Just as Sweden is using foreign capital to re-create its historic sphere of influence in the Baltic, Austria is doing the same in the lands of the former Austro-Hungarian Empire. Now, the majority of all mortgages in Poland, Hungary, Croatia and Romania — and a sizable minority in Austria — are denominated in foreign currencies, courtesy of Austrian banking activity. With the Swiss franc now locked in at record highs, many of these mortgages are not serviceable. The Hungarian government has felt forced to abrogate the terms of many of these loans, knowing that the Austrian banks are now so overexposed to Central Europe that they have no choice but to take the losses. As the financial crisis has continued apace, Austria has found itself with more exposure, fewer domestic resources and greater vulnerability to external forces than Sweden. So instead of being able to take advantage of regional weakness, it is finding itself losing market share both at home and in its would-be financial empire to Russia.
  • Spain’s banking empire isn’t even in Europe. Spanish firms BBVA-Compass and Santander have used the cheap euro credit to massively expand credit to Latin America. And Spain’s expansion took a somewhat novel route: The combination of cheap lending at home and in Latin America encouraged more than a million Latin American Spanish speakers to relocate to Spain and gain citizenship. To smooth the naturalization process, Madrid mandated that the new Spaniards be granted top-notch credit, a factor that only added to an already hyperactive construction sector. Spanish banks’ nearly 500 billion-euro exposure to Latin America is, for now, holding; only time will tell its impact to Spain’s bottom line.
  • The Greek government used its access to cheap credit to build up debt levels that are now the subject of much discussion across Europe. But much less is made of its banks, who encouraged consumers both at home and across the southern Balkans to increase their own debt levels. Being the least experienced of the four would-be financial centers, Greek banks offered the steepest credit breaks to the countries with the weakest repayment potential. Like Spain, Greece also did not make EU membership a condition for lending; vast volumes accordingly were fed into Macedonia, Serbia and even Albania.

Housing Bubbles

Large volumes of suddenly cheap credit made available to eager consumers obviously generated a series of sizable housing bubbles.

Spain’s tapping of European credit markets also underwrote the largest housing boom in Europe. More construction projects have been completed in Spain in recent years than in Germany, France, Italy and the United Kingdom combined. The construction sector — both commercial and residential — has now collapsed and there are about 1 million homes now sitting vacant in a country with just 16.5 million families. Outstanding loans to various real estate interests total some 400 billion euros, all backed by collateral that has lost 20 percent of its value since the housing market peaked.

In relative terms, Ireland actually did more than Spain. At its peak, nearly 10 percent of Irish gross national product was dependent upon construction, with 70 percent of that purely from residences. Half of the mortgages extended during the Irish real estate boom were made at the peak of the market between 2006 and 2008. That sector remains in the midst of a fairly rapid collapse. Residential home prices have reduced by half since their peak in 2007 and are showing few signs of stabilizing. The Irish government hopes that with their eurozone bailout package, their banking sector will become functional again by 2020. Until then, Ireland in effect has no banking sector and has been financially sequestered from the rest of the eurozone.

Two other European states — the United Kingdom and Sweden — have both experienced massive increases in home price growth, and both suffered from price corrections due to the 2008 financial crisis. But prices in both markets have recovered smartly, with Sweden even bouncing back above its pre-crisis highs. Sweden, in fact, is still experiencing a massive housing boom, with annual mortgage credit still expanding at a 30 percent annualized rate.

Viziunea economica a USL – update 28.05.2011

USL inseamna activarea responsabila a ideologiilor, convingerilor si solutiilor noastre atunci cand avem de dat un raspuns de miza nationala

Programul economic al USL

Dacă domnul președinte Daniel Constantin se plângea un pic de poziția de intervenție, eu sunt chiar mulțumit pentru că ceea ce era esențial de spus, astăzi, s-a spus. Nu-mi rămâne decât să mulțumesc, ca orice om care încheie o asemenea manifestare, și să fac două, hai, trei considerații necesare de ordin politic.

Victor Ponta și foștii prim-miniștri prezenți aici, domnul Daniel Constantin au vorbit, azi, pe larg într-o asemenea împrejurare despre teme economice, soluții economice precise și despre unele dintre ele chiar în detaliu. Toate lucrurile acestea sunt răspunsuri pe care noi trebuie să le dăm unor probleme, provocări strict economice, dar nu trebuie să uităm nicio clipă, și n-am vreo îndoială că toți cei prezenți în această sală nu uită, e vorba, însă, de numărul foarte mare de cetățeni care așteaptă aceste răspunsuri, nu trebuie să uităm și nu trebuie să uite nimeni că aici, pe teme economice, chiar e vorba de politic. Și în sensul acesta, vreau să fac cele trei considerații:

Unu: Pentru ca acest program, asumat în mod onest de către noi, să reușească trebuie să spunem clar de pe acum că în momentul în care Uniunea Social Liberală va veni la putere, politica economică a României va fi făcută de către Guvernul României, cu învestirea și sub controlul Parlamentului României.

Sigur că nu e o noutate. Nu știu câtă revoluție este în a anunța că noi vom respecta Constituția, dar vreau să spun limpede că în Constituția României scrie, și noi așa vom face indiferent de cine va fi președintele României, și anume că politica economică a acestei țări o face Guvernul, învestit cu un mandat parlamentar și sub controlul și cenzura Parlamentului, nu a președintelui României, nu a Fondului Monetar Internațional, nu a Băncii Naționale.

Sigur că un Guvern rațional și responsabil are forme de parteneriat și de cooperare necesare și cu președintele României – dacă vreodată un președinte al României sau acest președinte al României vor înțelege că politica externă poate servi mari interese economice ale acestei națiuni, cu Banca Națională, cu alte instituții, cu reprezentanții mediului de afaceri, cu sindicate, cu patronate etc. etc., dar decizia, în materie de politică economică, este și va fi a Guvernului, a primului ministru, sub controlul și cenzura Parlamentului.

Al doilea lucru este acela că pentru a aplica toate aceste măsuri, pentru a atinge, de fapt, toate aceste obiective e nevoie de două lucruri și despre unul, în viziunea noastră, am discutat azi, anume de soluții economice, soluții tehnice. Ele nu pot fi aplicate dacă nu există, însă, a doua componentă și anume o voință politică puternică și onestă. Și avem – Uniunea Social Liberală, această voință politică. Avem suficientă experiență, dovadă cei doi prim-miniștri care sunt prezenți, astăzi, aici, domnul Năstase, domnul Tăriceanu, avem destulă experiență politică și avem destul capital și resurse de schimbare pentru a înțelege că ceva esențial în practica politică, în mentalitatea politică, în atitudinea politică trebuie să se schimbe și toate lucrurile care sunt angajate sau mare parte din lucrurile care sunt angajate acolo, din punct de vedere instituțional, din punct de vedere comportamental al unui leadership politic, necesită această voință, o avem și o vom aplica.

În fine, ca orice program, sigur că și acest program economic, repet, care e doar parte, cum s-a și arătat, a unui ansamblu de programe sectoriale sau pe domenii, va genera discuții. Asta e în fond și speranța noastră.

Ne interesează discuțiile și dezbaterile bine-intenționate, nu ne interesează propaganda. Sigur că va fi un război propagandistic. Sigur că el va căpăta aspecte stupide. Nu ne așteptăm să ne laude adversarii sau nu ne așteptăm să tacă cei care asta au de făcut, să ne atace. Ne așteptăm, însă, la o discuție cinstită. Suntem deschiși unei discuții cinstite, aplicate, oneste despre nuanțele acestui program, despre riscurile sale, despre modalitățile în care, fără îndoială, el ar putea fi completat sau îmbunătățit.

Eu cred, poate mă înșel, sunt fatalmente subiectiv, eu cred că este unul din programele economice care vin cel mai devreme în raport cu data oficială a alegerilor. Îmi aduc aminte că, în mod tradițional, și în ’96, și în  2000, și în 2004, acest tip de programe venea undeva în primăvara anului electoral, cu locale și generale. Iată unul care vine mai devreme și asta înseamnă un risc pentru noi, dar e un risc pe care ni-l asumăm pentru că întrebările mediului de afaceri, salariaților, pensionarilor, cetățenilor României sunt presante și au nevoie acum de discuția unor soluții concrete, măcar pentru a nu ne scufunda cu toții în lipsa de speranțe și în orizontul închis în care încearcă unii să ne convingă că am fi închiși.

În al doilea rând, eu cred că acest program are foarte multe lucruri concrete, care pot fi contrazise, care pot fi contestate, ca pot fi, repet, puse în discuție, dar sunt fapte concrete. Nu e un program care spune că am dori să fie bine și tot românul să prospere. E un program care face opțiuni și în privința regimului impozitării, și în privința regimului costului muncii și în privința existenței unor forme instituționale, face niște opțiuni, asumând niște riscuri, dar o face pentru că înțelegem toți cei din Uniunea Social Liberală, cel puțin, că, dacă vrem să facem responsabil politica în România, de asta e nevoie acum, cu toate riscurile.

În fine, vă rog să rețineți că e un program care poate fi pus în discuție, dar care, cred, nu poate să primească acuza tradițională de populism, pentru că e un program care, poate pentru prima oară, nu promite românilor nu știu ce salariu, nu știu ce pensie în două luni, în șase luni, într-un an. Este un program care pornește cu realism de la situația de fapt, care ia în calcul toate dificultățile și care încearcă și vrea să dea speranță, dar nu să înșele.

Închei spunând că toate discuțiile care au durat mult, pentru că s-a vrut și au reușit să fie niște discuții serioase între social-democrați, liberali, conservatori, între oameni care cred și cred în continuare cu putere în doctrine care se confruntă, nu sunt doctrine complementare, oameni care cred în soluții diferite, au fost foarte interesante și, din punctul meu de vedere, cred că e și punctul de vedere al președintelui Victor Ponta, modul cum au decurs aceste discuții ca și rezultatul lor sunt un motiv de optimism pentru că astăzi Uniunea Social Liberală trece cel mai greu examen de până acum. Cel mai greu de până acum. A discuta și a conveni asupra acestor măsuri, pornind de la criteriile pragmatice ale nevoii de răspuns la realități imediate, și nu de obsesii și amendamente doctrinare, e, cred, un pas important pe care politicienii angrenați în conducerea Uniunii și în redactarea acestui program l-au făcut și este, cred, un semn bun pe mai departe.

Uniunea Social Liberală nu înseamnă, cu titlul unei cărți foarte în vogă pe la începutul anilor ’90, a lui Fukuyama, sfârșitul istoriei sau nu înseamnă sfârșitul ideologiilor. Înseamnă activarea responsabilă a ideologiilor, convingerilor și soluțiilor noastre atunci când avem de dat un răspuns de miză națională.

Vă mulțumesc dumneavoastră tuturor celor care ați fost prezenți azi aici, cu multă răbdare. Le mulțumesc tuturor colegilor care au lucrat, și sunt mult mai mulți decât vedeți în fața dumneavoastră pe această scenă și chiar decât vedeți în această sală. Îi mulțumesc, mi se pare normal s-o fac în chip special, președintelui PSD și copreședintelui alianței noastre, uniunii noastre, Victor Ponta, care a coordonat acest colectiv și acest efort, hai să-i zic și grup, să nu credeți că m-am dus spre stânga, dacă îi zic colectiv, și tuturor mulțumindu-le, mulțumesc anticipat și pentru criticile și fronturile de dezbateri pe care sper că acest program, atât de mult așteptat, să le genereze. Mulțumesc foarte mult încă o dată!

CrinAntonescu.ro

Adnotari:

In finalul proeictului „Viziunea economica, pag. 472, programul USL isi propune „un nou acord cu FMI.

Datorita faptului ca Romania si-a pierdut indepenta fiscala, prioritatea zero este renegocierea prezentului acord FMI, avand ca finalitate: stergerea datoriilor si/sau prelungirea contractului de imprumut. FMI este un instrument politic si deosebit de sensibil la climatul poliltic. Toate tariile care si-au renegociat contractele de finantarea cu FMI au evoluat.

Ungaria, Polonia, Cehia, Slovacia, Bulgaria, toatee aceste tari au depasit recesiunea fara ajutorul FMI.

Case-study: crestere economica in patru trimestre in Turcia.

Noul Conservatorim: Programul economic al USL- câteva propuneri

Update: 28.05.2011

Studiu ECOL:  Despre datoria publica a Romaniei

Hungarian Spectrum: Guvernul Orban (FIDESZ-KDNP) renationalizeaza compania de petrol MOL.

Romania analizata de George Friedman (Stratfor.com)

In school, many of us learned the poem Invictus. It concludes with the line, “I am the master of my fate, I am the captain of my soul.” This is a line that a Victorian gentleman might bequeath to an American businessman. It is not a line that resonates in Romania. Nothing in their history tells Romanians that they rule their fate or dominate their soul. Everything in their history is a lesson in how fate masters them or how their very soul is a captive of history. As a nation, Romanians have modest hopes and expectations tempered by their past.

This sensibility is not alien to me. My parents survived the Nazi death camps, returned to Hungary to try to rebuild their lives and then found themselves fleeing the communists. When they arrived in America, their wishes were extraordinarily modest, as I look back on it. They wanted to be safe, to get up in the morning, to go to work, to get paid — to live. They were never under the impression that they were the masters of their fate.

The problem that Romania has is that the world cares about it. More precisely, empires collide where Romania is. The last iteration was the Cold War. Today, at the moment, things seem easier, or at least less desperate, than before. Still, as I discussed in Borderlands, the great powers are sorting themselves out again and therefore Romania is becoming more important to others. It is not clear to me that the Romanians fully appreciate the shift in the geopolitical winds. They think they can hide in Europe, and perhaps they can. But I suspect that history is reaching for Romania again.

Geopolitics and Self-Mutilation

Begin with geography. The Carpathian Mountains define Romania, but in an odd way. Rather than serving as the border of the country, protecting it, the Carpathians are an arc that divides the country into three parts. To the south of the mountains is the Wallachian Plain, the heart of contemporary Romania, where its capital, Bucharest, and its old oil center, Ploesti, are located. In the east of the Carpathians is the Moldavian Plain. To the northwest of the Carpathians is Transylvania, more rugged, hilly country.

And this is the geopolitical tragedy of Romania. Romania is one nation divided by its geography. None of the three parts is easy to defend. Transylvania came under Hungarian rule in the 11th century, and Hungary came under Ottoman and Austro-Hungarian rule. Wallachia came under Ottoman rule, and Moldavia came under Ottoman and Russian rule. About the only time before the late 19th century that Romania was united was when it was completely conquered. And the only time it was completely conquered was when some empire wanted to secure the Carpathians to defend itself.

Some of us experience geopolitics as an opportunity. Most of humanity experiences it as a catastrophe. Romania has been a nation for a long time, but rarely has it been a united nation-state. After becoming a nation-state in the late 19th century, it had a precarious existence, balanced between Austria-Hungary, the Ottoman Empire and Russia, with Germany a more distant but powerful reality. Romania spent the inter-war years trying to find its balance between monarchy, authoritarianism and fascism, and it never quite found it. It sought safety in an alliance with Hitler and found itself on the front lines in the German invasion of Russia. To understand Romania as an ally one must bear this in mind: When the Soviets began their great counterattack at Stalingrad, they launched it over Romanian (and Hungarian) troops. Romanians maneuvered themselves into the position of fighting and dying for the Germans, and then got their revenge on the Germans by being slaughtered by the Soviets.

All of this led to Romania’s occupation by the Soviets, toward whom the Romanians developed a unique strategy. The Hungarians rose up against the Soviets and were crushed, and the Czechoslovaks tried to create a liberal communist regime that was still loyal to the Soviets and were crushed. The Romanians actually achieved a degree of autonomy from the Soviets in foreign affairs. The way the Romanians got the Soviets to tolerate this was by building a regime more rigid and oppressive than even that of the Soviet Union at the time. The Soviets knew NATO wasn’t going to invade, let alone invade through Romania. So long as the Romanian regime kept the people in line, the Russians could tolerate their maneuvers. Romania retained its national identity and an independent foreign policy but at a stunning price in personal freedom and economic well-being.

Contemporary Romania cannot be understood without understanding Nicolae Ceausescu. He called himself the “Genius of the Carpathians.” He may well have been, but if so, the Carpathian definition of genius is idiosyncratic. The Romanian communist government was built around communists who had remained in Romania during World War II, in prison or in hiding. This was unique among the Soviet Union’s Eastern European satellites. Stalin didn’t trust communists who stayed home and resisted. He preferred communists who had fled to Moscow in the 1930s and had proved themselves loyal to Stalin by their betrayal of others. He sent Moscow communists to rule the rest of the newly occupied countries that buffered Russia from the West. Not so in Romania, where native communists ruled. After the death of the founder of communist Romania, Gheorghe Gheorghiu-Dej, another Romanian communist who stayed in Romania ultimately took over: Ceausescu. This was a peculiarity of Romanian communism that made it more like Josip Broz Tito’s Yugoslavia in foreign policy, and more like a bad dream in domestic policy.

Ceausescu decided to pay off the national debt. His reason seemed to flow from his foreign policy — he didn’t want Romania to be trapped by any country because of its debt — and he repaid it by selling to other countries nearly everything that was produced in Romania. This left Romania in staggering poverty; electricity and heat were occasional things, and even food was scarce in a country that had a lot of it. The Securitate, a domestic secret police whose efficiency and brutality were impressive, suppressed unrest. Nothing in Romania worked as well as the Securitate.

Herta Muller is a Romanian author who writes in German (she is part of Romania’s ethnic German community) and who won the Nobel Prize for Literature in 2009. One of her books, The Appointment, takes place in Romania under the communists. It gives an extraordinary sense of a place ruled by the Securitate. It is about a woman who is living her life, working at her job and dealing with an alcoholic husband while constantly preparing for and living in dread of appointments with the secret police. As in Kafka, what they are looking for and what she is hiding are unclear. But the danger is unrelenting and permeates her entire consciousness. When one reads this book, as I did in preparing for this trip, one understands the way in which the Securitate tore apart a citizen’s soul — and remembers that it was not a distant relic of the 1930s but was still in place and sustaining the Romanian regime in 1989.

It was as if the price that Romania had to pay for autonomy was to punch itself in the face continually. Even the fall of communism took a Romanian path. There was no Velvet Revolution here but a bloody one, where the Securitate resisted the anti-communist rising under circumstances and details that are still hotly debated and unclear. In the end, the Ceausescus (Nicolae’s wife Elena was also a piece of work, requiring a psychological genius to unravel) were executed and the Securitate blended into civil society as part of the organized-crime network that was mistaken for liberalization in the former Soviet empire by Western academics and reporters at the time.

Romania emerged from the previous 70 years of ongoing catastrophe by dreaming of simple things and having no illusions that these things were easy to come by or things Romanians could control. As with much of Eastern Europe but perhaps with a greater intensity, Romanians believed their redemption lay with the West’s multilateral organizations. If they were permitted to join NATO and especially the European Union, their national security needs would be taken care of along with their economic needs. Romanians yearned to become European simply because being Romanian was too dangerous.

The Redemption of Being European

In thinking of Romania, the phrase “institutionalized prisoner” comes to mind. In the United States it is said that if someone stays in prison long enough, he becomes “institutionalized,” someone who can no longer imagine functioning outside a world where someone else always tells him what to do. For Romania, national sovereignty has always been experienced as the process of accommodating itself to more powerful nations and empires. So after 1991, Romania searched for the “someone else” to which it could subordinate itself. More to the point, Romania imbued these entities with extraordinary redemptive powers. Once in NATO and the European Union, all would be well.

And until recently, all has been well, or well in terms of the modest needs of a historical victim. The problem Romania has is that these sanctuaries are in many ways illusions. It looks to NATO for defense, but NATO is a hollowed-out entity. There is a new and ambitious NATO strategy, which sets a global agenda for the organization. Long discussed, it is an exercise in meaninglessness. Countries like Germany have no military with which to fulfill the strategy, assuming that any agreement to act could be reached. NATO is a consensual organization, and a single member can block any mission. The divergent interests of an expanded NATO guarantee that someone will block everything. NATO is an illusion that comforts the Romanians, but only if they don’t look carefully. The Romanians seem to prefer the comforting illusion.

As for the European Union, there is a deep structural tension in the system. The main European economic power is Germany. It is also the world’s second-largest exporter. Its economy is built around exporting. For a country like Romania, economic development requires that it take advantage of its wage advantage. Lower wages allow developing countries to develop their economy through exports. But Europe is dominated by an export superpower. Unlike the postwar world, where the United States absorbed the imports of Germany and Japan without needing to compete with them, Germany remains an exporting country exporting into Romania and leaving precious little room for Romania to develop its economy.

At this stage of its development, Romania should be running a trade surplus, particularly with Germany, but it is not. In 2007, it exported about $40 billion worth of goods and imported about $70 billion. In 2009, it exported the same $40 billion but cut imports to only $54 billion (still a negative). Forty percent of its trade is with Germany, France and Italy, its major EU partners. But it is Germany where the major problem is. And this problem is compounded by the fact that a good part of Romania’s exports to Germany are from German-owned firms operating in Romania.

During the period of relative prosperity in Europe from 1991 to 2008, the structural reality of the EU was hidden under a rising tide. In 2008 the tide went out, revealing the structural reality. It is not clear when the tide of prosperity will come rolling back in. In the meantime, while the German economy is growing again, Romania’s is not. Because it exists in a system where the main engine is an exporter, and the exporter dominates the process of setting rules, it is difficult to see how Romania can take advantage of its greatest asset — a skilled workforce prepared to work for lower wages.

Add to this the regulatory question. Romania is a developing country. Europe’s regulations are drawn with a focus on the highly developed countries. The laws on employment guarantees mean that Europeans don’t hire workers, they adopt them. That means that entrepreneurship is difficult. Being an entrepreneur, as I well know, means making mistakes and recovering from them fast. Given the guarantees that every worker has in Europe, an entrepreneur cannot quickly recover from his mistakes. In Romania, the agility needed for risk-taking is not readily available under EU rules drawn up for a mature economy.

Romania should be a country of small entrepreneurs, and it is, but there is extensive evasion of Brussels’ — and Bucharest’s — regulations. It is a gray market that creates legal jeopardy and therefore corruption in the sector that Romania needs the most. Imagine if Germany had the regulations it champions today in 1955. Could it possibly have developed into what it is in 2010? There may be a time for these regulations (and that is debatable), but for Romania it is not now.

I met a Romanian entrepreneur who marketed industrial products. In talking to him, I raised the question of the various regulations governing his industry and how he handled them. There was no clear answer or, more precisely, I didn’t realize the answer he had given me until later. There are regulations and there are relationships. The latter mitigate the former. In Germany this might be called corruption. In Romania it is survival. A Romanian entrepreneur rigorously following EU regulations would rapidly go out of business. It may be that Romania is corrupt, but the regulatory structure of the EU imposed on a developing economy makes evasion the only rational strategy. And yet the entrepreneur I talked to was a champion of the European Union. He too hoped for the time when he could be a normal European. As Rousseau said, “I have seen these contradictions and they have not rebuffed me.”

It is difficult to for an outsider to see the specific benefits of NATO and EU membership for Romania. But for the Romanians, membership goes beyond the specifics.

Romania’s Choice

August and September are bad months in Europe. It is when wars and crises strike. August and September 2008 were bad months. That August, Russia struck Georgia. In September, the financial crisis burst wide open. In the first, Russia delivered a message to the region: This is what American guarantees are worth. In the European handling of the financial crisis in Eastern Europe, the Germans delivered a message on the limits of German responsibility. Both NATO and the European Union went from being guarantors of Romanian interests to being enormous question marks.

In my conversations with Romanians, at all levels and almost universally, I have found the same answer. First, there is no doubt that NATO and the European Union did not work in Romania’s favor at the moment. Second, there is no question of rethinking Romania’s commitment to either. There are those Romanians, particularly on the far right, who dislike the European Union in particular, but Romania has no strategic alternative.

As for the vast majority, they cannot and will not conceive of a Romania outside the confines of NATO and the European Union. The mere fact that neither is working well for Romania does not mean that they do not do something important: NATO and the European Union keep the anti-democratic demons of the Romanian soul at bay. Being part of Europe is not simply a matter of strategic or economic benefits. It represents a transitional point in Romanian history. With membership in the European Union and NATO, Romania has affirmed its modernity and its democratic institutions. These twin amulets have redeemed Romania’s soul. Given this, I suppose, an unfavorable trade balance and the absence of genuine security guarantees is a small price to pay. I am not Romanian, so I can’t feel their ineffable belief in Brussels.

Romanians do acknowledge, again almost universally, the return of Russia to the historical stage, and it worries them. Of particular concern is Moldova, a region to the east that was historically Romanian, taken by the Soviets in a treaty with Hitler and the rest of which was seized after World War II. Moldova became an independent country in 1991 (a country I will be visiting next). For much of the post-Cold War period it had a communist government that fell a few years ago. An election will be held on Nov. 28, and it appears that the communists might return. The feeling is that if the communists return this time, the Russians will return with them and, in the coming years, Russian troops will be on Romania’s borders.

Romanian officials are actively engaged in discussions with NATO officials about the Russians, but the Germans want a more active involvement of Russia in NATO and not tension between NATO and Russia. The Western Europeans are not about to be drawn into Eastern European paranoia fed by nostalgic American strategists wanting to relive the Cold War, as they think of it.

I raised two strategic alternatives with Romanian officials and the media. One was the Intermarium — an alliance, perhaps in NATO, perhaps not — of Poland, Slovakia, Hungary, Romania and Bulgaria. (To readers who asked why I did not go to Bulgaria on this trip, it was simply a matter of time. I will go there as soon as I can.) Very interestingly, one official pointed out substantial levels of cooperation on military planning between Hungary and Romania and discussions between Romania and Poland. How serious this is and whether it will go beyond the NATO context is unclear to me. Perhaps I can get a better sense in Warsaw.

But military planning is one thing; the wherewithal to execute military plans is quite another. The Romanians are now caught in a crisis over buying fighter planes. There are three choices: the Swedish Gripen, the Eurofighter and used American F-16s. The problem is that the Romanians don’t have the money for any of these aircraft, nor does it seem to me that these are the defense measures they really need. The Americans can provide air cover in a number of ways, and while 24 F-16s would have value, they would not solve Romania’s most pressing military problem. From where I sit, creating an effective mobile force to secure their eastern frontier is what is needed. The alternative I’ve heard was buying naval vessels to block a very real Russian naval buildup in the Black Sea. But if Romania has trouble buying 24 fighters, naval vessels are out of the question.

The Romanians are approaching defense planning from a NATO perspective — one used for planning, not implementation, and one that always leads to sophisticated systems while leaving the basics uncovered. This may seem like an unnecessary level of detail for this essay, but the Romanians are deep in this discussion, and questions like this are the critical details of strategies growing out of geopolitics. It is the difference between planning papers drawn up by think tanks and the ability to defend a nation.

The Black Sea is a critical part of Romania’s reality, and the rise of Turkey makes the system of relationships interesting. Turkey is Romania’s fourth largest export target, and one of the few major trading partners that imports more from Romania than it exports. I pointed out to Romanians that it is the great good fortune of Turkey that it was not admitted to the European Union. Turkey’s economy grew by an annualized rate of 12 percent in the first quarter of 2010 and has been surging for years.

Turkey is becoming a regional economic engine and, unlike Germany, France and Italy, it offers compatibilities and synergies for Romania. In addition, Turkey is a serious military force and, while not seeking confrontation with Russia, it is not subservient to it. Turkey has adopted a “360 degree” strategy of engagement with all countries. And since Turkey is a NATO member, as are Hungary, Slovakia and Poland, there is no incompatibility with a dual strategy of the Intermarium and the Black Sea. For now, they fit. And the irony of Romania reaching out to the heir to the Ottomans is simply that and no more. This is the neighborhood that Romania inhabits. These are the options it has.

What doesn’t fit for Romania is the NATO/EU system alone. Perhaps this is part of a rational mix, but it cannot be all of it. For Romania, the problem is to move beyond the psychological comfort of Europe to a strategic and economic understanding that accepts that the post-Cold War world is over. More important, it would be a move toward accepting that Romania is free, responsible for its future and capable of managing it.

It is this last step that is the hardest for Romania and many of the former Soviet satellites — which were also bound up with World War I and Hitler’s disaster — to come to terms with. There is a connection between buying more expensive German cars than you can afford, and more of them than you need, and the novels of Herta Muller. The appointment can be permanently cancelled, but the fear of the interrogation is always with you. In this region, the fear of the past dominates and oppresses while the confident, American-style military planning and economic restructuring I suggested is alien and frightening.

The Romanians emerged from a world of horror, some of it of their own making. They fear themselves perhaps more than they fear others. For them, becoming European is both a form of therapy and something that will restrain the demons within and without. When you live with bad memories, you live with the shadows of reality. For the Romanians, illusory solutions to haunting memories make a great deal of sense.

It makes sense until war comes, and in this part of the world, the coming of war has been the one certainty since before the Romans. It is only a question of when, with whom and what your own fate will be when it arrives. The Romanians believe with religious fervor that these things will be left behind if they become part of Europe. I am more skeptical. I had thought that Romania’s problem was that it was part of Europe, a weak power surrounded by stronger ones. They seem to believe that their solution is to be part of Europe, a weak power surrounded by stronger ones.

I leave Romania confused. The Romanians hear things that I am deaf to. It is even at a pitch my Hungarian part can’t hear. I leave now for another nation, Moldova, which has been even more exposed to history, one even stranger and more brutal than Romania’s.

Statul liberal: reconstrucţia de la vârf a statului român

REZOLUŢIA LIGII ALEŞILOR LOCALI
Statul liberal: reconstrucţia de la vârf a statului român

Partidul Naţional Liberal consideră că procesul de reconstrucţie a statului român după principiile, valorile şi instituţiile statului liberal a devenit o necesitate stringentă a societăţii româneşti.

Statul asistenţial şi clientelar, impus după 1989 de moştenitorii partidului comunist, i-a adus pe români în pragul colapsului economic, moral şi politic.

Într-o perioadă de gravă criză economică, în care autoritatea de stat ar fi trebuit să încurajeze segmentele active şi productive ale societăţii, statul român se comportă ca un jefuitor al acestora, în beneficiul grupării politico-financiare aflate acum la putere.

Acest tip de comportament atestă faptul că statul român actual este, din păcate, un duşman al propriilor cetăţeni.

Plecând de la aceste realităţi, constatăm falimentul politicii actualei puteri, de utilizare demagogică a sintagmei  „reforma statului”, ca paravan pentru acoperirea sistemului clientelar al PD, care căpuşează statul român.

Fideli convingerilor noastre, exprimate în programul PNL pentru România, intitulat „Statul liberal – a doua modernizare a României”, afirmăm că statul român trebuie reconstruit, astfel încât să devină, din inamic, un partener al românilor.

Vrem un stat care se bucură de încrederea propriilor cetăţeni, care recunoaşte şi respectă libertatea fiecărui cetăţean şi care încurajează reuşita individuală a fiecărui cetăţean.

Reconstrucţia statului român trebuie începută de la vârf şi realizată în cel mai scurt timp.

De aceea, Partidul Naţional Liberal se pronunţă cu fermitate pentru promovarea de urgenţă a următoarelor măsuri legislative constituţionale şi organice:

Reducerea numărului de parlamentari la 300. Partidul Naţional Liberal consideră că un număr mai mic de parlamentari creşte eficienţa actului legislativ şi gradul de competenţă a resursei umane promovate de partidele politice.

Separarea atribuţiilor celor două Camere ale Parlamentului, astfel încât Senatul să devină, preponderent, camera comunităţilor locale. Partidul Naţional Liberal este adeptul sistemului bicameral, ca formă evoluată de parlamentarism, dar consideră că Legislativul poate deveni eficient doar prin separarea atribuţiilor Camerelor.

Alegerea parlamentarilor prin vot uninominal majoritar în două tururi. Partidul Naţional Liberal asumă –împreună cu întreaga clasă politică – eroarea adoptării actualului sistem de vot. Considerăm că votul uninominal majoritar reprezintă cea mai bună opţiune pentru democraţia românească, întrucât este singurul sistem electoral în care răspunderea alesului faţă de alegător o depăşeşte în importanţă pe aceea a alesului faţă de propriul partid.

Alegerea preşedinţilor de consilii judeţene prin vot uninominal majoritar, în două tururi. Partidul Naţional Liberal consideră că acest sistem de vot reflectă cel mai bine voinţa cetăţenilor şi scade şansele de succes ale unor înţelegeri politicianiste, făcute de partide la ”masa verde”, împotriva cetăţenilor.

Reorganizarea administrativ-teritorială a României după sistemul regiunilor cu grad mare de autonomie financiar-fiscală. Partidul Naţional Liberal consideră că adoptarea acestui model reprezintă primul şi cel mai important pas către un stat român eficient din punct de vedere economic.

Partidul Naţional Liberal îşi asumă, prin vocea tuturor reprezentanţilor săi, parlamentari, preşedinţi de consilii judeţene, primari, consilieri judeţeni şi locali, o reformă a statului reală, eficientă şi în stransă legatură cu interesele românilor.

Vrem ca statul eficient, statul partener al românilor, să fie construit rapid, pentru a valorifica ultima şansă a societăţii româneşti de a depăşi criza economică şi instituţională în care România se zbate în prezent.

Braşov, 5 noiembrie 2010

Daurel's Blog

Just another WordPress.com weblog

Florin Citu

A look at financial markets and government policies through the eye of a skeptic

La Stegaru'

"Aveţi de apărat onoarea de a fi stegari!", Nicolae Pescaru

ADRIAN NĂSTASE

Pune întrebarea și, împreună, vom găsi răspunsul!

Sociollogica

"Istoria ne legitimeaza ca singurele partide autentice de centru-dreapta", Crin Antonescu

Carl Schmitt Studien

"Istoria ne legitimeaza ca singurele partide autentice de centru-dreapta", Crin Antonescu

%d blogeri au apreciat asta: