Secret squirrel

Wednesday, March 04, 2009

Secret squirrel

Armageddon Ambrose has recordedthe response of Joaquin Almunia, EU economics commissioner, to the growing crisis in the eurozone.

"We are equipped intellectually, politically and economically to face this crisis scenario, " says our Joaquin. EMU economies in distress can count on EU solidarity if they get into trouble. They do not, as the wise and noble Mr Brown suggests, have to go cap in hand to the International Monetary Fund.

Thus speaks Joaquin, "It is clear that there are serious problems in certain countries. If a crisis emerges in one eurozone country, there is a solution before visiting the IMF." 

"The solution exists," he says, then lowering his voice … but "It's not clever to tell you in public. " In fact, he might have said, it's a secret squirrel solution - it's so secret, we're not even going to tell ourselves what it is!

But, with this secret solution, the probability of a eurozone break-up is "zero". And such is Joaquin's boundless confidence that he roundly declares: "Who is crazy enough to leave the euro area? Nobody. The number of candidates to join is growing." 

With such amazing "intellectual equipment" on display, who can possibly have any doubt that this crisis is drawing to a close? Never mind that Ambrose is telling us that the " crossover index" measuring default risk on low-grade corporate bonds jumped above 1,100 yesterday, nearing the panic levels after the Lehman collapse last year. 

Who cares that Klaus Schmidt-Hebbel, the chief economist of the OECD club of rich states, is saying that, "Some of these countries are facing a big crisis. This is not only a balance-or-payments crisis, it is also financial crisis with a risk of default on debt"? 

Why should we even begin to care that the "massive accumulation of foreign debt" creates the risk of repeating the Mexican and Asian blow-ups in the 1990s? 

Secret squirrel is on the case. Nothing can go wring.

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Tuesday, March 03, 2009

Round and round the same track

As Der Spiegel reports:

An international conference in Egypt on Monday resulted in $4.48 billion (€3.5 billion) in new pledges to help rebuild the Gaza Strip and fund the Palestinian government. The donors who gathered in the resort of Sharm el-Sheik gave a powerful boost to the moderate Palestinian Authority led by President Mahmoud Abbas while seeking to isolate the militant Hamas movement, which controls Gaza.

That would be our money, the various taxpayers of the Western world because we strongly suspect that most of the funds will be coming from the United States, the EU and the separate European countries.

More money to go on rockets that can be fired into Israel and on vicious propaganda that turns children into psychopaths. Woops, no, the money is to go to Fatah the "moderate" wing of the Palestinian polity and to bypass Hamas. Exactly how is that going to be achieved?

Fatah has no control over Gaza and its supporters are routinely arrested, beaten up, tortured and murdered by Hamas, as even Amnesty Internationalhas acknowledged. Were we not told that the aid sent into Gaza a while ago was not going to go to Hamas but the people of Gaza? Well, Hamas simply helped themselves to the food and the blankets.

As it happens, Egypt, where the conference took place, is very carefully keeping its borders with Gaza closed as well and controls very tightly what goes in and what comes out of that unfortunate area. Even the reporter ofDer Spiegel wonders how the reconstruction of Gaza can begin in those circumstances (not to mention the fact that the truth of what has really happened there during the Israeli attack has not been clearly spelled out with Hamas doing its best to obfuscate the situation).

Some German journalists are saying that it is impossible to reconstruct anything or create a lasting solution without Hamas. Even they are not convinced, as it is reasonably clear that there can be no lasting solution withHamas. They are not interested in any solutions short of Israel's destruction that, even if they can achieve it, will not exactly produce peace and prosperity for the Palestinians. After all, Israel's withdrawal from Gaza produced nothing except a base from which endless rockets could be fired into that country.

Rockets are being fired now and there is some speculation that President Obama and Secretary of State Clinton intend to signal to Israel that it would be best if they did not attack Gaza again, no matter what sort of shelling they have to put up with. Otherwise, there will be angry donor nations to face up to who will not like to see the destruction of what their aid has created.

That sounds like a departure from the usual pattern. In the first place, a good deal of the aid, namely from the Arab countries will never get there; in the second place, much of what does get there will be stolen; in the third place, any reconstruction will get bogged down in corruption, inefficiency and a civil war. And the rockets will go on being fired. 

By the time the Israelis once again decide that enough is enough either there would have been a change in the Administration or, at least, a new Secretary of State or the present incumbents will have learnt the lesson every American government has to learn over and over again: Hamas does not want peace and will work very hard to make sure that there is none. Meanwhile, we all carry on paying for this lunacy.

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That explains it …

Following our piece earlier today on the change in policy toward Afghani redevelopment, we see in the Guardian News Blog a piece on the French forces in Afghanistan.

The strap, in part, reads: "Roadbuilding in a far-flung valley under the guard of French forces augurs well. " Embedded in the piece, we read:

On the other hand, the breathing space won by the French has allowed work on the road to begin along the lower reaches of the Panjshir river. It is due to be given an asphalt surface within three weeks. After years of pleading from Afghan provincial governors, roads are at the centre of the new strategy being pursued in Afghanistan by the head of Central Command, General David Petraeus, and the force commander in Afghanistan, General David McKiernan.

Last year, the Taliban succeeded in making the main road that rings the country more or less impassable as it passed through the south, suffocating much of the economic gains the government and its foreign backers are trying to eke out.

"We would not even have thought of building this road a few months ago," Spellmon said. When it is completed, trucks will no longer have to sit in long lines in the congested capital on the way north. It will also mean that the seedless pomegranates, for which the Pashtun villages of southern Kapisa are famous, can be taken more rapidly to more markets.

There had to be a reason for the sudden shift in policy that we observed – and thus we see the fingerprints of David Petraeus, leader of the "surge" in Iraq. Note the quoted excerpt: "After years of pleading from Afghan provincial governors, roads are at the centre of the new strategy being pursued in Afghanistan …".

After a redevelopment strategy based around "feel-good" projects, heavily biased towards schools, clinics, gender development schemes, and thousands upon thousands of latrines (I kid you not), it seems that sense is prevailing. The people on the ground have been calling for a shift in priorities for years and, with Petraeus in post, their calls have been heeded.

The interesting thing is that this is a genuine and important shift in policy which, if maintained, could make a strategic difference. But, as we observed earlier, so distant is the media from the reality, it has not taken on board the importance of what is happening.

One can’t avoid noting either that, once again, the Tories have missed a trick. It has been evident for some time that the development priorities have been badly skewed and that infrastructure has not been given the importance it needs. Had the Tories picked this up and been calling for change, they could be preening themselves, claiming a victory. That is one of the arts of good opposition.

But, as always, guess who has recently been making the running! To give him his due, Michael Ancram was on the case in 2004 but, as with so many things, there was no follow-up.

Despite that, things may not look as bleak as we thought, even if there is a long way to go yet.

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Warming on hold

This is getting like the latter days of the BSE scare. When the panic over "mad cow disease" was rampant and half a million people were going to die every year from it, the incubation period was two years. When the epidemic did not materialise, it became five years and when, obstinately, the epidemic still did not appear, it became ten and then 20 …

Eventually, we hypothesised that the incubation period was really 100 years. We would all die of BSE but for one minor problem … we were all going to die of old age first. And so it is with global warming. It looks as if an awful lot of people are going to be in their graves before we next see any of the blessings of higher temperatures.

That is according to Kyle Swanson and his climate team at the University of Wisconsin-Milwaukee. Following a 30-year trend of warming, they have finally recognised that global temperatures have flat lined since 2001 "despite rising greenhouse gas concentrations."

Swanson, however, is not going to let go of his one true God. Global warming has only "gone into hiding". While the current cooling trend may continue for 30 years, that is "just a hiccup". With humans' penchant for spewing greenhouse gasses, it will certainly come back to haunt us.

"When the climate kicks back out of this state, we'll have explosive warming," says Swanson. "Thirty years of greenhouse gas radiative forcing will still be there and then bang, the warming will return and be very aggressive."

That should see him nicely through to his pension and beyond, giving him and his many fellow-travellers plenty of time to continue their careers before it the final whistle blows on the most expensive scare in history – an ingenious device which enables evidence of cooling to be discounted.

Unfortunately, it also gives plenty of time for the "colleagues" in Brussels to play their dire games, although some of these seem to be grounding not on the evidence of cooling but lack of money.

EU environment ministers met yesterday in Brussels to consider EU aid to "poorer countries" to enable them to reduce their own emissions, only to confront the spectre of having to find €175 billion per year by 2020.

Somewhat daunted by the prospect of a sum which is actually bigger than the entire EU budget, environment commissioner Stavros Dimas noted that, "We were not quite able to reach consensus on the financing mechanism." He added darkly, "This is an issue where the (EU) council (of nations) will need more discussion time."

Perhaps Mr Dimas should consult Kyle Swanson. According to him, they might have 30 years. But, by the end of that period, it will become 40 and then 50 and then 60. Eventually, we're all going to die of global warming but for one minor problem …

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