Disunited Europe uses Schengen as a tool to exert pressure

The European Union has never been a unity but recent conflicts even sharpened the divisions. We have not only the broad EU-28 but the euro-zone within it and the Schengen-area as a next dimension. Moreover, the continent falls into the rich and stable North and poor and indebted South on the one hand, as well as the multiethnic and open West and the monoethnic and closed East on the other. Since no state wants to be excluded from the elite, European politicians started to blackmail each other using the threat of exclusion rather than cooperate. If the EU fails and loses to eurosceptic governments that may come to power due to the unwise decisions taken by the Community, then the current leaders will be to blame.

It started a few years ago with the Greek debt crisis and the possible expulsion of the country from the euro area. It was a forcible way of making Greece carry out reforms in the manner intended by the Troika, even if the Greeks had their own views. And blackmailing still continues, as only if the next deadline of a bail-out comes. Continue reading →

Donald Trump: America’s next president from Wall Street

Last summer we made a forecast that Mr Trump might be America’s next president. Back then, most of the political analysts could not take this as a serious eventuality. They wrongly viewed Mr Trump as an outsider, despised by the USA establishment. And as an outsider they think he has no chance of becoming the next US president. Some 4 months later as CNN headlines read: “CNN/ORC Poll: Trump alone at the top again”¹, many political analysts are still in disbelief.

Image by Gage Skidmore

Democracy works according to a simple pattern. To make it as a president, a candidate needs access to the mainstream media. In many countries the mainstream media are partly state owned; in the US they are owned by New York based firms like Twenty-First Century Fox (Fox News), Inc, Time Warner Inc (CNN) and National Amusements, Inc. (CBS) financed by Wall Street bankers and Wall Street investor funds. In modern society people do not receive media coverage by accident. It is carefully planned who is and who is not in the media.

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Could Artur Mas tear Spain apart and trigger a “black swan” event?

On September 27 the coalition Junts pel Si (Together for Yes) led by Artur Mas won the local election in Catalonia. Its political platform promised to work towards Catalonia’s independence of Spain. On November 9 the Catalan parliament passed a separatist motion: the legislators were tasked with

(i) drafting the Catalan constitution,

(ii) designing the Catalan social security system and

(iii) creating the Catalan treasury¹.

Within the meaning of the same motion the Spanish Constitutional Court no longer had jurisdiction over Catalonia. In the wake of these events the Spanish government headed by Mariano Rajoy appealed with the Constitutional Court to suspend the Catalan motion and to issue a warning to 29 top Catalan politicians. timeline On November 11 the Constitutional Court ruled as was expected: the bill of November 9 was suspended and the top Catalan politicians were duly given a warning. The court has a further 5 months to rule over the case. Before that, on December 20 Spain will have a general election whose results may greatly affect the political process in Catalonia; so much so that the go-away region may have its own elections in case acting prime minister Artur Mas fails to form a government by January 10.

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US and Canadian oil producer suffer the most from current oil price collapse

Oil price has collapsed and is not going to rebound quickly. But not all the oil-consumer countries benefit from low prices in the same way. And not all oil-producer countries suffer equally.

Oil prices change as the values of currencies do. Purchase or sale contracts for oil are usually long term ones, the price of oil in such contracts does not change very frequently. Fluctuating exchange rates of currencies are still enormously important for the economies. Oil for $40 per barrel does not mean that this barrel is also as cheap in all countries as consumers have to buy dollars in order to purchase a barrel. Or producers sell their barrels for dollars and then exchange these dollars for their own currency. The domestic price based on the exchange rate is not always stable. Continue reading →

Right-wing Parties are on the rise across Europe

Right-wing parties have always been part of the European political scene with the French National Front and the British National Party as well as United Kingdom Independent Party being most talked about. At the polls they may have had quite a large popular support, yet the election systems used in some European countries effectively blocked them from entering national parliaments although they gained a significant share of the vote (see graph for UKIP)¹. In some isolated cases when a nationalistically-oriented or a right-wing party won a significant number of parliament seats, it would be shunned by all the remaining parties, and thus rendered politically ineffective, as was the case with the Sweden Democrats².

wykres

Enter the refugees. The swelling numbers of migrants and especially the flood that has taken place over a couple of recent years has made Europeans reconsider their attitude to the phenomenon, and so they started supporting the parties, whose political platform called for stopping the migrant waves. Continue reading →

Turkey will pay the price for having a lack of patience

photo Eugene Sergeev

It was a political decision to down the Su-24, and it reflected more the growing impatience on the part of the Turks at the Russian military actions in Syria rather than an exasperation at the violation of Turkish airspace. The decision also showed Turkish shortsightedness and political immaturity. It was a blow to Russia, one that may lphoto Eugene Sergeevead to far-reaching international consequences. The long-term consequence for Turkey may be the loss of some of her territory to Kurds.

The course of events and their background

If each single violation of a country’s airspace were to lead to the outbreak of hostilities, we would long have had world war three that would have erupted in the region of the Baltic states where such incidents caused by Russian and NATO pilots are far from being rare. The long accepted practice is that in such cases the pilots of both sides try to make eye contact in order to identify the intruder beyond any doubt. Then the alien craft is escorted out of the country’s airspace. Continue reading →

Collapsing global trade a harbinger of the next crisis.

photo Oscity

A falling industrial demand, falling commodity prices, falling trade, falling sales. This is what we see now in China, Europe and even in the USA. What comes next? Falling employment, falling customers’ demand, falling economy. Global trade gives us clear signals that we cannot ignore.

A crisis is coming and these are the signs:

China: October imports fell 18.8 percent in comparison to the previous year¹. It is the beginning of the domino effect, with its coal and iron background.
Taiwan: October orders from China fell 10.6 percent in comparison to the previous year, from Japan 24 percent down. Taiwan’s export orders are seen as an indicator of a demand for high-tech gadgets and for Asia’s exports².
Japan: first decline in exports in October since August 2014 (2.1 percent in comparison to the previous year). Reasons: China’s slowdown, poor Asia’s demand, the yen not weak enough. Double-digit declines in auto parts and electronic components³.
Germany: a monthly drop in exports in August, due to declines in industrial production and the number of factory orders⁴.
UK: 40% of respondent-companies are below average in export orders. Reasons: China’s downturn and a strong sterling⁵.
Baltic Exchange’s main sea freight index fell below 500 for the first time. Baltic’s BDI Index (gauging the cost of shipping) reflects a slower coal and iron ore demand in China. 19-commodity Thomson Reuters/Core Commodity CRB Index reached 13-year lows⁶.
USA: quiet three busiest U.S. seaports during ‘peak shipping season’. Imports in Los Angeles, Long Beach and New York fell in both September and October for the first time in a decade⁷. Continue reading →