TheBigPond - spotlight on what South African business and business people have been up to in Europe. Edited by South African journalist Christo Volschenk from Stuttgart, Germany. Note: This blog has migrated to a new home at www.thebigpond.eu.
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WHEN THE GOING GETS TOUGH....

In the past weeks I've been unashamedly pro-CDU and anti-SPD. And pro-Merkel.

But, I've never been anti-Schr?der. Although I really should be - to be consistent. The boss should not be able to walk away scotfree from the mistakes/underperformance of his appointees (Clement and others). In the last instance, he is responsible for all. The buck stops with him.

But still I find it hard to be anti-Schr?der. Why? Because I've always kind of hero-worshipped people who perform at their best when the chips are down.

Whether it's Pete Sampras who fires an ace when he needs to at 5 all in the fifth set, the full-back who saves a certain try with a bone-crunching tackle on a storming lock forward, the managing director who handles difficult questions at a press conference, or the politician who thinks on his feet with the eyes of the nation on him.

In short: Everyone who gets going when the going gets tough.

And, whenever I sense "it happening" (the tough getting going), it gives me goose bumps. The last time this happened was a few hours ago, during the Schr?der/Christiansen TV interview - at the end of which Schr?der smiled like a cat who had just caught a mouse and the panel of experts (who came to slaughter him) sat there flabbergasted, wondering what had hit them.

Schr?der's excellent performance will most certainly help the SPD in the next voters' poll. But, my guess is, his performance will also help the CDU. How? By breaking the speed of the new "Left Party".

Meiner Meinung nach, the only loser tonight was the new "Left Party". And therefore, Schr?der did Germany a great favour tonight.

It always has been amazing to see how confident Schr?der can be in situations in which he really, really should NOT be confident. To see him coming out with guns blazing, when he should be re-treating. Full-on goose bumps material.

Knock-out punches to the chin are simply shrugged off. Time and time again. No glass chin here.

And I think many German viewers noticed this tonight and were impressed by it.

Nevertheless, I can't see the SPD/Greens winning the election, simply because I can't see the voters' memories being so short.

(Remember: As recently as May this year the public and business world were absolutely "gatvol" with Schr?der and the SPD and pollsters could hardly find a German voter willing to support the SPD.)

Or, do I over-estimate the German voter?

1.8.05 01:45


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SEX AND THE CITY (OF BERLIN)

A while back I complained about the hairstyles (and lack of femininity and sex appeal) of female politicians. All over the world, but particularly in Germany.

Last week the German weekly financial magazine Wirtschaftswoche published a quote which "spoke" to me.

A Roman Catholic church man called Streithofen apparantly said about Claudia Roth, a German female politician: "Die Frau wirkt auf mich hochgradig z?libatverst?rkend."

Roughly translated he said: When I look at Claudia Roth I know I don't need sex (I told you before I translate like an observer - what I want to see is what I see.)

Now, the man is a church man and we can't really expect of him to declare: With Claudia I closed my eyes and thought of Marilyn Monroe.

But, really. I think most non-church men would also find her "celibate material".

But, do you know what, Pater Streithofen. I think both you and me might be somewhat naive in the case Roth to think our opinions are important.

Maybe it's for the women to say how they find her...

For the record, I just want to add: South African female politicians are (in general, as always) more attractive than female politicians in Germany.

2.8.05 10:06


WHEN EVEN THE PRETENCE OF OBJECTIVITY FLIES OUT THE WINDOW...

This is not new, but I thought I should just go on record with it: Objective reporting is a romantic illusion. It doesn't exist. Not anywhere in the world. Also not at any German and South African newspaper, magazine, or other medium. It doesn't exist, because it can't exist.

And why is it a "romantic illusion"? For the simple reason that even a decision by an editor NOT TO PUBLISH something already undermines the objectivity objective. (Yes, I did that deliberately, so it'll sound more academic.)

And because of the sheer volume of news available for publication every day, every editor must choose every day. He simply can't publish all.

In short: Also the decision not to report on something is a form of censorship. You could even say: When an editor chooses to do nothing, he is quilty of opinion manipulation!

It is important to remind editors about this fact, because they often conveniently forget it when they complain about someone, somewhere "undermining the freedom of speech".

Lack of space, or time, forces editors all over the world, every day, to choose, to decide "for their readers" what they should read (or see, or hear), to decide for them what they will find interesting.

And by doing this, they manipulate the public opinion - sometimes blatantly, sometimes subtly, sometimes unwittingly, mostly unwillingly.

The Financial Times Deutschland (FTD) yesterday blatantly and deliberately "manipulated public opinion" by totally ignoring the Christiansen/Schr?der TV interview of the previous evening.

Although the debate took place reasonably early in the evening (certainly early enough for a mention on the last page to go to the printer, i.e the front page) not a word was written about it.

To make matters worse, Merkel and the CDU got splashed all over an inside page.

I decided to wait for this morning's edition of the FTD, to check whether it got a mention today. But, alas. Still no mention.

Or, am I in the wrong here? When your chancellor appears in an hour-long one-on-one with your country's acknowledged best TV interviewer in the prime time slot on a Sunday night.....is that major news, or not?

Apparantly not for the FTD.

I think it was front page material. Conclusion? They simply didn't want to report on anything which might help the cause of the SPD/Greens in the election and harm the cause of the CDU (traditionally the business-friendlier political party in Germany).

So, with about 6 weeks to go to the election, the FTD has apparantly decided the race is getting to tight for comfort. Schluss mit lustig. We'll bury all pretentions of reporting objectively for now and go straight for the jugular.

So, dear fellow observers, here's another job for us: Let's be on the look-out for more examples of gross "public opinion manipulation" by editors in the run-up to the German election.

Expect to be busy in the next 6 weeks.

2.8.05 11:35


TWO HURDLES GERMANY MUST (BUT MIGHT NOT) CLEAR

I always thought for Germany the glass was half full. But, today I changed my mind. Now I think the glass is half empty.

So what? Well, the first describes a positive frame of mind. The second a negative frame of mind. Big difference. In the world of economics - huge.

And, from where all this pessimism, all of a sudden?

Ja, well. It's this election thing.

Germany is at a cross-roads. Either it takes the path of renewal, new energy and new prosperity. Or, it ambles along on the road of mediocrity and slow decline for another decade, maybe more.

To get onto the road of prosperity, Germany must clear two hurdles. And this is where the mango hits the fan: Since this morning I'm convinced the chances of Germany clearing both hurdles are about zero to 10%.

The first hurdle: The Constitutional Court and the decision whether Germany should get an early election, or not.

The second: Winning by a big enough margin to give Germany an effective government after the election. (I specifically avoided mentioning political parties, because it's more important that a political party, or coalition gets A STRONG MANDATE from the voters, than WHICH political party, or coalition wins.)

Now, why do you worry about the first hurdle? No-one else in Germany seems to doubt that the country will go to the ballot station in September...

Ja, well. I'm not convinced at all. Germany needs an election for socio-economic reasons. And that is how President K?hler also saw it (maybe, because he's an economist by training). So, when he motivated his decision, it was full of economic arguments, so to speak. Birth rate to low, debt to high etc.

Problem is, the guys in Karlsruhe are legal eagles. They have to look at the issue from a legal angle. From a legal interpretation angle. And from that angle it's completely irrelevant how many babies are born in Germany. And so will several other economic reasons given by the President for his decision be irrelevant to the guys in Karlsruhe.

Then there is chancellor Schr?der's assertion that he can't rule effectively because of "internal strive" and "internal unhappiness" around Agenda 2010.

Well, 3 days after he said that (during the no confidence debate) the SPD released it's election programme. And, alas! It was the Agenda 2010 all over again. Gone was the "dissention" in the SPD. Suddenly all were happy to fight an election with Agenda 2010.

Something's wrong here...

So, I think the Karlsruhe clan will refuse the early election.

But, even if I'm wrong (let's hope so!), the chances of Germany clearing the second hurdle are super small. Judged by the latest voters' poll, it is non-existent.

In fact, it seems as if Germany will have another "lame duck" government after the election. The same as before. Something it needs like a hole in the head.

The latest polls show the CDU/FDP coalition won't have a majority. So, they won't be able to easily, quickly and radically alter the German economic landscape after the election.

One could ask: Since we already know the problem won't be solved by an election, do we really need one? Suddenly, it's actually egal whether there's an election, or not.

In fact, if these Karlsruhe guys wanted to be difficult, they could simply say: It is not sure that Germany's problem will be solved by an election....chances are the new government will be just as "lame" as the existing one...therefore we rule: NO ELECTION.

3.8.05 15:31


SOMETHING HAS TO CHANGE

My gut tells me the European Union (EU) can't exist with the monetary and fiscal arrangements as they stand now.

They are to "country-insensitive". Amongst others. Somehow, sometime, something has to change.

But, let's start at the beginning.

Outside the EU governments have two, major instruments for smoothing out the swings of the short-term business cycle, i.e monetary and fiscal policy.

In theory (sometimes also in practice, although it's not always so easy, or possible, to change tack with fiscal policy on short notice) these 2 instruments are used in combination to optimise the effect on the business cycle.

So, the ideal situation is the one where the 2 instruments compliment each other, i.e. pull together, not against each other. And where the 2 instruments are put to work counter-cyclically, i.e. they are expansive in a downswing and restrictive in an upswing.

That's the ideal. Mostly only found in handbooks.

More common is the situation where the "fixed expenses" of the public sector (interest on debt, social services etc.) comprises such a big part of the total expenses, that it leaves the minister of finance little room to play.

But, even here the finance minister (responsible for fiscal policy) and the president of the central bank (hopefully, responsible for monetary policy!) would try to co-ordinate policies as far as possible.

And in the EU?

Here member countries have lost effective control over both monetary and fiscal policy. Monetary policy is determined by the European Central Bank (ECB), while EU politicians effectively run EU fiscal policy from Brussels.

This is a double whammy. Firstly, because the members now have nothing left to steer with and, secondly, because "co-ordination between the 2 instruments" is not possible any longer (if not in theory, definitely not in practice).

This may lead to situations (like we have it now), where the ECB considers raising interest rates (because of inflationary pressures building up), while the big member countries in the EU are told to make their fiscal policies more restrictive, or risk being fined by Brussels. And all of this in an economic environment which (at least for Germany) borders on a recession.

That, the "macro discrepancy".

There is also a "micro discrepancy": The EU politicians control EU fiscal policy with a single, simple rule (deficit may not be larger than....) which is totally insensitive to economic conditions in individual member countries.

And the ECB is similarly insensitive to the monetary situations in individual member states. (Forget about this thing that member countries are represented in the ECB and so co-determine. Like in politics, power is also not divisible in the world of monetary policy determination. You either have it, or you don't. Ask FW de Klerk about that.)

So, the monetary and fiscal policy arrangements of the EU are not realistic and will have to change, sooner or later.

On a more basic level (if it's possible): How can monetary policy be the same for Germany and Italy? It's a dream. The peoples are to different.

The one fought tooth and nail for the integrity of its currency over the last 50 years. The other just didn't care and simply added another nought at the back every few years for decades on end.

These mentalities didn't change with the signing of a Maastricht document. Proof that it didn't can be seen in the different routes taken by real wages in the years after the signing of Maastricht - the Germans displayed huge discipline, while the Italians thought life was one long party (as they always thought).

No. You can put a horse and a cow in the same paddock, but you won't make a "corse" out of them.

5.8.05 11:27


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