LATEST POSTS China's first aircraft carrier on a sea trial in 2011 (Photo: Digitalglobe) I have just been sent a copy of Amitai Etzioni's essay "China: Making an Adversary" published in International Politics. It has been out for a while but is new to me and will not have been seen by most Telegraph readers. As you all know, Washington (and the West) is deeply split over how to handle China's spectacular renaissance. This is by far the most important issue in 21st-century geopolitics. It is not one we can afford to get wrong, and errors made today may prove irreversible. The new term "China hedge" has been coined, used by those who think that the country's growing economic and military might – combined with a new "truculent attitude" – is potentially so menacing that the US must rearm and reorganise… Read More EMU shroud-wavers need a better argument (Photo: PA) Congratulations to Iceland. Fitch has upgraded the country to investment grade BBB – with stable outlook, expecting government debt to peak at 100pc of GDP. The OECD's latest forecast said growth will be 2.4pc this year, after 2.9pc in 2011. Unemployment will fall from 7pc last year to 6.1pc this year and then 5.3pc in 2013. The current account deficit was 11.2pc in 2010. It will shrink to 3.4pc this year, and will be almost disappear next year. The strategy of devaluation behind capital controls has rescued the economy. (Yes, I know there is a dispute about exchange controls, but that is a detail.) The country has held its Nordic welfare together and preserved social cohesion. It is slowly prospering again, though private debt weighs heavy. Nobody is forcing the elected government out of office or… Read More Athens was the superpower of the Hellenic world - for a time This was sent to me by a reader. It is from the Melian Dialogue by Thucydides. Athens (then the big bully on block) wanted control over the little island of Melos as a strategic asset in its quarrel with Sparta. It gave the Melians an ultimatum: either submit to Athenian control or face annihilation. The Melians chose defiance. They were crushed. Those men captured were slaughtered. The women and children were sold into slavery. But the Athenian treatment of the Melians caused horror across the Greek world; it marked the moment of Athenian overreach and the beginning of their decline, as vulnerable city states allied with Sparta to protect themselves. Athenian arrogance backfired disastrously. In the end, Melian exiles retook their island. Here… Read More Greece is burning, and Germany is stoking the flames Germany’s Wolfgang Schäuble is entering into ever more dangerous waters. His apparent demand that Greece postpone elections scheduled for April, and impose a technocrat junta (a l’Italiana) for another year without PASOK and New Democracy, takes your breath away. Is this really the position of the German government? Greek democracy be damned? I presume he has seen pictures of the blackened buildings below the Acropolis – and yes, the evidence is everywhere: a neo-classical house near my hotel at Monastiraki metro station was completely gutted, as was a building across the road. (There were four homeless sleeping in the cold alley next door, being comforted by a young volunteer.) I presume too that Mr Schäuble has been well-briefed on the explosive… Read More Another normal day at the Hellenic Statistical Authority. Industrial output fell 11.3pc, compared to minus 7.8pc in November. It is what can happen if you join a fixed exchange system, then take out very large debts in what amounts to a foreign currency, and then have simultaneous monetary and fiscal contraction imposed upon you. Germany discovered this on the Gold Standard when it racked up external debt from 1925 to 1929 (owed to American bankers) in much the same way as Greece has done. When the music stopped – ie, when the Fed raised rates from 1928 onwards – Germany blew apart in much the same way… Read More Will Greece comply with the Troika's diktats? Very quickly: some of you will have seen that Greece’s tax revenue from VAT collapsed by 18.7pc in January from a year earlier. Nobody can seriously blame tax evasion for this. It has happened because 60,000 small firms and family businesses have gone bankrupt since the summer. The VAT rate for food and drink rose from 13pc to 23pc in September to comply with EU-IMF Troika demands. The revenue effect has been overwhelmed by the contraction of the economy. Overall tax receipts fell 7pc year-on-year. This is a damning indictment of the EU-imposed strategy. Greece is chasing its tail. The budget deficit is stuck near 8pc to 9pc of GDP because the economic base is shrinking so fast. Let me just add that it makes little difference whether or not Lucas Papademos secure… Read More Is the French franc on its way back? Salut souverainistes. For those wanting more details on the euro break-up plan drafted by French economists, here is the link to the L’Observatoire de L’Europe website. A few extracts, loosely translated: "The obstinate determination of governments to take us by forced march deeper into the euro impasse can only lead to the general aggravation of the economic situation in Europe." "Even though our American and Chinese competitors have an interest in the survival of the single currency, the euro is condemned to an uncontrollable explosion sooner or late". (A nice twist that one, inverting the false and widely believed conspiracy theory that the US is trying to destroy the euro.) "National currencies should be recreated in each eurozone country". There will be… Read More
Treating China as an enemy
Iceland's Viking Victory
Greece and the Melian Dialogue of Thucydides (obscure)
Germany's smear campaign against Greece
Greek death spiral accelerates
For Greece a tear, for Brussels a blush
An orderly EMU break-up, à la Française
Sunday, 26 February 2012
FEBRUARY 24TH, 2012 12:19
637 Comments
FEBRUARY 17TH, 2012 22:01
FEBRUARY 17TH, 2012 11:15
FEBRUARY 16TH, 2012 15:03
FEBRUARY 9TH, 2012 11:22
We learn that:
Greece's manufacturing output contracted by 15.5pc in December from a year earlier.
Unemployment jumped to 20.9pc in November, up from 18.2pc a month earlier.
I have little further to add. This is what a death spiral looks like.
FEBRUARY 8TH, 2012 15:23
FEBRUARY 7TH, 2012 12:25
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