Germany's Economy is Thriving, and Ireland's is Not

It's Thanksgiving!! Happy Thanksgiving!

Lots of news the past week about Ireland's government losing the confidence of the world credit markets (thus the imposition of austerity measures in order to get a large bailout from the IMF). Ross Douthat had a great piece about the huge number of McMansions in the Irish countryside, emblematic of the country's housing boom.

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Meanwhile, Harold Meyerson had a piece in yesterday's Post (here) arguing that Germany's economy is bucking the global downturn because the Germans are focusing on local manufacturing and local lending.

I learned from Meyerson's article that the Germans are still making things, and then they areexporting those things to other countries (their trade balance is second in the world, after China's). He states that manufacturing still accounts for 25% of Germany's economy, versus only 11% of the USA's economy.

Meyerson focuses on "mittelstands" which are family-owned (and not publicly-traded) manufacturing businesses.  Because they are not driven by the desire to maximize share prices in the short term, mittelstands can works towards long-terms economic goals. 

The article is well-structured because Meyerson provides the example of a mittlestand in Saxony-Anhalt that produces "axle-box housings for Chinese and German high-speed trains, machine tools requiring climate-controlled precision measurement."  Since trains are the finished product, this is also an example of a manufactured product that is contributing to a (relatively, in any event) clean technology: mass-transportation.

Here's an excerpt summarizing the argument:

The mittelstand remains blissfully immune to many pressures that share-price-oriented financial markets inflict on their American counterparts. "We don't have short-term strategies, only long-term strategies," says Hubner. Mittelstand companies are not publicly traded, and they benefit from an extensive system of vocational education and a sector of municipally owned savings banks that work solely with local businesses. Roughly two-thirds of German small and mid-size businesses get their loans from these banks. "Over the past decade, banking largely became a self-fulfilling activity," says Patrick Steinpass, chief economist for the national organization of savings banks. "But our banks are restricted to doing business in their regions; they have to concentrate on the real economy." Through such radical notions has Germany thrived.

Printing More Money to Solve Our Problems

The E.U. announced over the weekend that they (and the I.M.F.) have put together a $1 trillion bailout for Greece and the other Euro-zone countries having debt problems.

The European and US stock markets responded with major upswings yesterday, but I cannot for the life of me figure out how this is a solution to the problem.

Aren't the policy-makers --- yet again --- simply printing more money and thereby "kicking the can" of having to confront the debt further on down the road?

Anne Applebaum explains, in her Post piece this morning (here), some of the things that Greece's government has promised to do in exchange for the dough:

Europe and the International Monetary Fund will spend billions of euros to rescue Greece. And in exchange, Greece will not merely agree to reduce its vast public deficit but will adopt, by June, no fewer than 17 specific legal and budgetary changes. Among other things, the council declares that Greece "shall" reduce the "Easter, summer and Christmas bonuses" of civil servants and pensioners; increase taxes on fuel, tobacco and alcohol; reduce the operating costs of local government; and pass a law to simplify the rules for new business start-ups.

Once all that is out of the way, Greece "shall," by September, fulfill nine other requirements, among them a pension reform that raises the retirement age to 65, from a current average of 61. By December, Greece "shall" adopt 12 additional measures, among them one mandating the use of generic drugs in the state health-care system. There are further deadlines in March, June and September 2011. If the Greek government wants to continue receiving the cash it needs to function, it will have to pass all of this legislation, piece by piece.

Won't the Greek public push back incredibly hard on many of these requirements - particularly raising the retirement age by 4 years? The US government cannot muster the courage to raise our Social Security retirement age by even 1 year!!

Whither the Shares of National Bank of Greece Tomorrow?

It has been a wild roller coaster ride for the Greek debt situation these past couple of weeks.

The looming deadline is May 19, when bondholders are owed approximately $10 billion. As of today, the Greek government still might not be able to pay.

So Chancellor Merkel (more on her here), President Sarkozy, and the rest of the European gang have been trying to work out the details of a bailout. Problem is, the Germans cannot decide if they really want to get in the business of bailing out southern Europeans and their profligate vacationing. On Diane Rehm's Friday News Roundup last week, the debate revolved around whether or not the Germans would be willing to risk the collapse of the European Union concept for the sake of standing strong on not bailing out the bad behavior by Greece.

As with the US investment banks, it appears that the larger entity (US government then = Germany now) does not want to face what could happen if it doesn't pony-up, so the bailout is in the works.

Dominique Strauss-Kahn at the IMF is playing a leading role -- could he be an early contender for 2010's Man of the Year, as he steps into the Ben Bernanke role?

Here's an excerpt from today's Times article, by Nicholas Kulish (here):

European leaders tried to claim the initiative and show that they were working to calm market fears over Greece’s tide of debt and the long-term viability of the euro currency. Traveling in Beijing on Thursday, President Nicolas Sarkozy of France told reporters that he was in constant contact with Mrs. Merkel and that Germany and France were “in perfect agreement” over how to deal with the Greek debt crisis, a spokesman for the president in Paris confirmed. Negotiators in Athens pushed to wrap up an agreement for significant cuts in Greek public spending to clear the way for the government to get financing and reassure investors worldwide that European debt was safe.

My last post about Greece was on February 22, here.

Archbishop Rowan Williams and Female Bishops in the Anglican Church

There is a good article in the most recent New Yorker ("A Canterbury Tale," by Jane Kramer, here) examining the debate within the Anglican Church about whether to permit women to be bishops.

Kramer discusses Rowan Williams's efforts to maintain unity between the pro- and anti- camps, and her description of Williams makes him sound like an awesome spiritual leader:

Williams is a fifty-nine-year-old Welshman with a beautiful voice, a full white beard, and fearsome, flyaway black eyebrows that in pictures, or when he is thinking hard, can make him look like a monk out of Dostoyevsky—a resemblance that is said to please him. He wrote a book about Dostoyevsky in 2008. His manner is friendly, more professorial than priestly. He taught theology for most of the nineteen-eighties, at Cambridge and then at Oxford ... His students—some of them now the priests berating him most strongly for his reluctance to put himself, and his office, on the line for a cause he is known to support—call him the most engrossing teacher they ever had. After a few minutes, I believed it. Williams has a disarming mind, a modesty, and an appetite for conversation, a way of thinking out loud, that belies the austerity of his title. At one point, he stopped himself, saying, “Sorry, this is turning into a sermon.”

I love the phrase "fearsome, flyaway black eyebrows" -- and based on the picture I found at Wikipedia, it's absolutely apt.

Williams actually sounds a bit like Obama in terms of recognizing that pushing for change too fast or too hard could be detrimental to his goal (which, I gather, is to enable women to become bishops):

“How do you eat an elephant?” he said, with something between a chuckle and a sigh, when I asked how he hoped to hold his church together, given that the demands of Anglican women were so completely at odds with the demands of Anglican men whose own inclusion specifically involved excluding those women from episcopal service. “I suppose it’s by using as best I can the existing consultative mechanisms to create a climate—and I think that’s often the best, to create a climate,” he told me. “There’s a phrase which has struck me very much: that you can actually ruin a good cause by pushing it at the wrong moment and not allowing the process of discernment and consent to go on, and that’s part of my view.” He thought that with time, patience, and enough discussion within the Church you could temper the opposition to female bishops—despite the fact that three synods since 1994 have tried to address the issue, and the opposition remains intractable.

The article makes the point that those in favor of female bishops cite to the fact that on Easter Jesus first appeared to two women.

Regarding women and Christianity, Maureen Dowd has been writing searing criticisms of the Catholic hierarchy recently, and she argues that if the priests/bishops/pope had listened to (and granted more authority to) women, then the phenomenon of child abuse by priests may not have been as widespread -- and the cover-up less likely. She also thinks the Catholic Church could use a "nope" -- a nun as pope. I am impressed (and somewhat surprised) with how stringently she's taking the Church to task.

Back to Anglicanism: I imagine that there will be female bishops within the next ten years, but I also anticipate that at least some of the dioceses will split off when it happens. Although Kramer writes extensively about the pope's invitation for dissenting Anglicans to join the Catholic Church, I do not think it will play out that way -- I think they will form an alternative Anglican institution.

One question that came to my mind is how many Anglican bishops there are, and I have not found an answer yet. Based on a percentage given in the article, I am guessing around 1,500, but that actually seems like a smaller number than I'd have thought.

Obama and Medvedev Reach an Agreement on Arms Reduction

Dmitri Medvedev is one of the most fascinating of the current world leaders. Something about him just seems more jovial and laid-back than Putin (is it the lingering effect of the happy picture at last year's G-20, to the left?).

And now, this great news: Obama and Medvedev have reached agreement on a nuclear arms reduction treaty. The treaty still needs to be approved by the Senate, and that is not a foregone conclusion. Nevertheless, it sounds like a significant step forward in (1) improving US/Russia relations and (2) contributing to an atmosphere in which other countries might reduce (or at least stop increasing) their arsenals.

Fred Kaplan has an excellent explanation of the agreement, here.

Kaplan emphasizes the symbolic import of the agreement, and my sense is that this is one of the ways that Obama's election really has shifted the course of our foreign relationships in a positive way. Here's an excerpt from Kaplan:

U.S. officials say that the good cheer engendered by the treaty will build mutual trust, which could lead to more cooperation on matters that really count these days: terrorism, nuclear proliferation (including joint efforts to stop Iran's uranium-enrichment program), climate change, and so forth. During the Cold War, nuclear arms-control talks were a surrogate for diplomacy. They gave U.S. and Soviet diplomats something to talk about—let them get to know each other, scope out intentions, reduce distrust—at a time when political disagreements made it impossible to talk about anything else. After the Cold War ended, the two countries could suddenly talk about lots of issues. The icy exchanges between George W. Bush and Vladimir Putin pumped a bit of frost back into the air. A renewed START accord will help "push the restart button." That's the (explicitly stated) hope, anyway. We'll see. One thing's for sure: If the treaty had collapsed, so would have the prospects for cooperation in other areas.

Here are the numbers of US and Russian weapons:

United States
ICBMs: 450 missiles, 550 warheads
Submarine-based missiles: 288 missiles, 1,152 warheads
Bombers: 113 planes, 550 bombs

Russia
ICBMs: 383 missiles, 1,355 warheads
Submarine-based missiles: 160 missiles, 576 warheads
Bombers: 77 planes, 856 bombs

I'd have thought we actually had a lot more missiles than that; have we been steadily reducing their numbers for the past twenty years?

The other big news from Russia this week has been two terrorist attacks: first, two suicide bombs on the Moscow subway that killed 39 people, and then today there was a bomb in the Caucasus. So far I have not heard anyone attributing the attacks to al Qaeda -- I think the assumption is that they were carried out by Chechen rebels.

In the United States, Nicolas Sarkozy has been visiting with Obama and trying to get the US more revved up on Iranian sanctions -- the Iranian nuclear story seems to continue to percolate in the background without grabbing all that much American media attention.

The Debt Crisis in Greece: No Resolution Yet

Germany, France, and the other European Union members have yet to figure out / decide how to address the debt problems in Greece. Approximately $23 billion in loans comes due in April and May, so I anticipate the decision will come no later than the next 2-3 weeks.

In this morning's Post (here), Robert Samuelson has a good summary of why neither choice -- a bailout or no -- is appealing:

A bailout is proving hugely controversial. If Greece is aided, won't other countries demand -- or require -- rescues? Is this possible, considering that even France and Germany have high debts and that a Greek bailout is unpopular, especially in Germany? One way to mute the problems is for Greece to embrace a harsh austerity that reduces its borrowing. Greece has already pledged to cut its government workforce and raise taxes on alcohol, tobacco and fuel. The other euro countries want more. Their dilemma is that either rescuing or abandoning Greece is a gamble. To some economists, Greece's situation is so dire that default is inevitable, though it may be a few years away. The required austerity would be too punishing, says Desmond Lachman of the American Enterprise Institute. Greece would need spending cuts and tax increases equal to 10 percent of GDP, he says. The resulting savage recession would worsen existing unemployment, already about 10 percent.

Samuelson cites to economists who think that it is a real possibility that Greece will abandon the euro sometime in the future. Wow, that would be a major development -- and one that would please populists (and nationalists) across Europe, I imagine.

The Greece Crisis and Wall Street

It's not yet clear how the Greek debt crisis is going to be addressed by the European Union - the rumors shifted back and forth during the week.

Greece's outstanding sovereign debts are approximately $300 billion.

In an article in this morning's Times (here), Louise Story and others report that Wall Street banks are partly to blame for enabling Greece to borrow too much:

As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere. In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.

This is yet another example of too much debt coming back to bite us.

420. Are there any countries that are not huge debt spenders? Or is it always in a nation's national interest to spur internal economic growth, which means incurring debt whenever necessary? What's the most fiscally conservative country in the world?

421. Frank Rich has an article this morning criticizing Obama and the Democrats for letting Sarah Palin steal the populist, angry-at-the-banks thunder (Obama made some really tone-deaf comments supportive of bank CEO's this week). When -- if ever -- is Obama going to take some action that truly tries to rein in Wall Street excess?

A Possible Bailout of Greece?

The big economic story this past week has been fear that Greece could default on its debt (my earlier post about the Greek economy was on December 13, here). Worries then spread to Spain and Portugal and their ability to pay off sovereign debt.

418. Which nations or groups are Greece's primary creditors (ie, who plays the role of China::USA for Greece)?

The US stock market has had a bad couple of weeks, and I think it's related to the concerns about Greece affecting the global economy on a broader scale.

This morning, Anthony Faiola reports in the Post (here) that European countries are talking about a possible bailout. Faiola says that the two possible sources of a bailout are (1) a German-led consortium of European Union countries/banks and/or (2) the International Monetary Fund.

419. It seems that the wealthier European nations are going back and forth as to whether or not to intervene in the Greek situation. Who's driving the decision-making: the bankers/economists or the political leaders like Angela Merkel? Are there populist uprisings in northern Europe (a la the Tea Parties) that are calling for fiscal/budgetary restraint and opposing the possible bailout?

Here is Faiola's summary of the Greek economy and its troubles:

Just as investors found millions of U.S. homeowners to be riskier bets than initially thought, they are now realizing that Greece -- as well as other weaker economies that use the euro -- is no Germany. Political handouts and padded employment rolls helped public-sector wages double here over the past decade. Rampant tax evasion -- at least a quarter of the economy operates under the table -- drained government coffers even as public spending soared. When the global financial crisis hit, Greece cooked the books to mask the extent of its massive budget deficit, with the fiscal emergency becoming clear only over the past few months.

Ukranian Elections: Viktor Yanukovych Wins

Anne Applebaum opines (here) about the recent Ukrainian presidential elections, in which Viktor Yanukovych won decisively.

Yanukovych is the Russian-allied conservative who opposed Viktor Yushchenko in the Orange Revolution of 2004. As Applebaum reminds, he was portrayed at that time (certainly in the Western media) as the "bad guy" to Yushchenko's progressive democracy advocate.

Now, though, Ukranians have grown frustrated with the lack of economic growth under Yushchenko's leadership; here is Applebaum's summary of some of the country's problems:

The recession hit Ukraine hard, and many difficult decisions were not made. The Ukrainian government still has not gotten around to privatizing land or removing Soviet-era subsidies from the budget. Tensions between the western and eastern halves of the country have not decreased.

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Applebaum does not think the election of Yanukovych is a step backwards for Ukraine -- at least not unless he governs as an autocrat. Instead, she argues that the election shows that democracy is taking hold there and enabling a peaceful transition of power. She also hopes that Yanukovych will move quickly to improve relationships with neighbors both east and west:

The Ukrainians need to expand their relationship with the International Monetary Fund, they need to negotiate stable and reasonable gas agreements with their Russian neighbors to the east, and they need to conclude visa and trade agreements with their European neighbors to the west. They are in need of practical, literate politicians, not ideologues. For their sake, we must hope Yanukovych is the former, not the latter.

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416. Does Ukraine itself have natural gas reserves? Or is it that the reserves are in the Black Sea and that they must pass through Ukraine, via pipeline, on the way elsewhere?

417. What is Yushchenko doing now? Was he a candidate in this election? Is he still admired by democracy advocates or have they -- like the Ukrainian people -- been disillusioned by his actual performance in office?

The 2004 Orange Revolution was one of the first news stories that I tracked in my journals. Interestingly, Applebaum does not mention the infamous poisoning of Yushchenko (I remember the vivid pictures of him afterwards). I do not recall and cannot find in my journals whether anyone -- whether a political opponent or otherwise -- was ever convicted for the poisoning.

Here's an excerpt from one of my entries:

January 17, 2005, "Ukraine's Spies" - C.J. Chivers:

Through the Orange Revolution crisis of Nov. / Dec. '04, an "inside battle" was waged among Ukraine's top intel. officials, who ultimately chose not to follow Leonid Kuchma's orders.

Ihor Smeshko sided with the protesters. At a meeting at which the S.B.U. agreed to remain neutral, just after the election, Yushchenko gave Smeshko a landscape painting he had done.

An update: Philip Pan reports on the Post's website today (here) that international election observers are calling the election "free and fair," notwithstanding that Yulia Tymoshenko (Yanukovych's main opponent) has alleged a number of irregularities, including vote-buying and double voting.

Greece: Major Economic Problems for George Papandreou

This picture is from yesterday's New York Times and is by Aris Messinis of Agence France-Presse.

The Prime Minister of Greece is George Papandreou.

This past week, Greece's credit rating was downgraded (a report in yesterday's Times is here). There's a new Socialist government in power, and it sounds like the Greek people are really getting nervous about the state of their economy:

The dire economic situation has prompted the question of what went wrong in a country that was once seen as a model for European Union membership and that enjoyed 15 years of sustained growth, coming from behind to host the 2004 Summer Olympics. “We didn’t use the Olympic spirit well,” said Elias Clis, a former Greek ambassador. “The previous government took the safe way, and the safe way is a very dangerous path."

After winning by a wide margin in October, the Socialist government of Prime Minister George Papandreou announced that the country’s budget deficit was 12.7 percent of the gross domestic product, more than four times the 3 percent ceiling set by the European Monetary Union.

Mr. Papandreou last week estimated the national debt at $430 billion, calling it Greece’s worst crisis in three decades and blaming his conservative predecessors for the economic state.

388. Which European country is in the worst shape economically? It sounds like Germany is doing the best, and generally the eastern European countries (including Greece) are struggling most. How does Ireland's situation compare with Greece's?

389. Why do Greeks strike so much (the peg for the Times article is a recent trash-collectors strike)? I remember when I was in Athens there was a large-scale strike going on (I cannot remember which union), and Bart told me that strikes are just part of everyday life there. Do all Europeans love to strike, or is it really focused among the southern Europeans? Why does having a bigger social-safety net lead to more striking, rather than less?

The Swiss Ban on Minarets; Assimilation (Or Not) in Western Europe

This picture is of a minaret in Geneva. The Swiss recently passed a law (or amended their constitution?) to prohibit the building of minarets. 57% voted in favor of the ban.

Ross Douthat wrote in yesterday's Times (here) about Muslim immigration to western Europe and the increasing anti-immigrant / anti-Muslim feelings in a number of European communities.

Douthat argues that, contrary to the expectations of elite opinion leaders, (1) not all Muslim immigrants have been willing to assimilate and (2) not all foreign-born Europeans have been willing to accept them into their societies:

Switzerland isn’t an E.U. member state, but its minaret moment could have happened almost anywhere in Europe nowadays — in France, where officials have floated the possibility of banning the burka; in Britain, which elected two representatives of the fascistic, anti-Islamic British National Party to the European Parliament last spring; in Italy, where a bill introduced this year would ban mosque construction and restrict the Islamic call to prayer...

Millions of Muslims have accepted European norms. But millions have not. This means polygamy in Sweden; radical mosques in Britain’s fading industrial cities; riots over affronts to the Prophet Muhammad in Denmark; and religiously inspired murder in the Netherlands. It means terrorism, and the threat of terrorism, from London to Madrid. And it means a rising backlash, in which European voters support extreme measures and extremist parties because their politicians don’t seem to have anything to say about the problem.

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In this week's New Yorker, Ian Buruma also examines the issue of Muslim assimilation into western European norms. Buruma focuses on Ahmed Marcouch, a Moroccan-born Dutch politician who has espoused liberal views (including acceptance of homosexuality) while also advocating for the teaching of Islam in Holland's public schools.

Both of these articles made me think about the similarities and differences between attitudes towards immigrants in the US and in western Europe. No matter how anti-immigrant some Americans are (and I believe that nativism in America is an underreported story in the media, Lou Dobbs's success notwithstanding), the European situation is ten times more fragile because of the overlay of violence and past acts of Islamist terrorismm.

Ottomania

Dan Bilefsky reports in today's Times (here) about Ottomania, a phenomena in which people in Turkey are increasingly nostalgic for the Ottoman Empire.

The article says that Ottomania is rooted -- in part -- in a growing frustration with western Europeans' reluctance to accept Turkey as an equal - either politically (by way of admission to the European Union) or socially/culturally:

Ottomania is a harking back to an era marked by conquest and cultural splendor during which sultans ruled an empire stretching from the Balkans to the Indian Ocean and claimed the spiritual leadership of the Muslim world. The longing for those glory years — by religious Muslims and secularists alike — partly reflects Turks’ frustration with a European Union that seems ill disposed to accept them as members ...

“We Turks are tired of being treated in Europe like poor, backward peasants,” said the owner of Ottoman Empire T-Shirts.

Bilefsky also says that the Turkish government has been "aggressively courting" alliances with Muslim governments including Iraq and Syria.

A recent manifestation of Ottomania is the tremendous attention in Turkey to the death, this year, of Ertugrul Osman, the heir to the Ottoman throne. It sounds as though the Turks celebrated Osman the way that some Russians continue to celebrate descendants of the czar.

Angela Merkel

Angela Merkel gave a speech to Congress on Tuesday of this week.

The 20th anniversary of the fall of the Berlin Wall is next week, and that's the primary reason for Merkel's speech.

But, according to an AP piece in the Times (here), a major focus of Merkel's remarks was the need for coordinated action on climate change (the talks in Copenhagen start in December).

I've just done some reading about Merkel on Wikipedia, inspired by a very enthusiastic profile by Anne Applebaum that I read earlier in the week. Merkel was born in 1954 in Hamburg and is a scientist by training: she wrote her doctoral thesis about quantum chemistry (I didn't know there was such a thing). She speaks fluent Russian -- I guess that's one reason why many of the articles about her emphasize her work on improving German/Russian relations.

Merkel was first elected as Chancellor in 2005 and then re-elected this fall. Her party is the Christian Democrats, but she has had to govern through parliamentary coalitions.

Applebaum's piece (here) argues that Merkel has quietly become the most important and influential person in Europe. Applebaum posits that some of Merkel's success may stem from her clever use of her woman-hood:

The more I watch Merkel, the more I am convinced that her femaleness holds the key to her success. Under her watch, Germany has continued to grow more powerful, more influential, and more dominant than ever before. Yet not only has no one noticed, they applaud and ask for more ...

Merkel provokes no jealousy or competitiveness among the alpha males who run large countries, and she inspires no fear among the citizens of smaller ones. On the contrary, Germany even has good relations with most of its neighbors to the east, many of whom are inclined to distrust Germans as a matter of principle.

This is partly because she is so willing to show up when asked and offer mild-mannered words of friendship and apologies for World War II. After which she returns home and works to make Germany stronger and more dominant in the region. And everyone smiles.

349. Do Obama and Merkel get along well? Which of the current European leaders does Obama have the best relationship with?

350. Do scientists make better politicians/leaders than lawyers do? Of the leading American politicians, who has the most experience and background in science?

351. What product does Germany produce that is most imported into the US? Would it still be cars? Or is there some other industrial product?

352. How many German troops are there in Afghanistan? Obama made a point of thanking Merkel for Germany's cooperation there -- what is the extent of their participation?

Wind Energy in France

Edward Cody had a fascinating piece in last Sunday's Post (here) about a controversy over windmills in France. Cody's piece reminds me of the opposition to installing windmills around Cape Cod in Massachusetts.

The French government has set a goal of 8,500 windmills, which would produce 25,000 megawatts of energy, by the year 2020. Currently there are 2,500 windmills.

328. How many windmills are there in the United States? How many are there in Virginia?

According to Cody, a specific plan is to install 3 windmills in the town of Argouges, which is approximately 10 miles from Mont St. Michel. These windmills would be 300 feet high, and they would be slightly visible from Mont St. Michel.

329. Can you really see for 10 miles? I thought you could only see for 3-4 miles (?).

The opponents of the current plan for Argouges argue that the windmills should be at least 18 1/2 miles from Mont St. Michel. They also oppose -- on a broader scale -- France's move towards a greater reliance on wind energy, arguing that "the mills deface the landscape everywhere ... and are not an economical way to reach Europe's clean-energy goals."

The wind energy issue is a fascinating conundrum for environmentalists. Wind is far preferable to carbon-based sources and also preferable -- as I understand it, at least -- to nuclear power. That being the case, it's got to be a tough call for them to oppose wind energy on primarily aesthetic grounds.

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Cody writes that farmers are often pro-windmill -- motivated by the lease payments that they receive (this reminds me of American farmers who lease their land for cell phone towers):

"Farmers and their village councils, often one and the same, tend to embrace proposals to install windmills in their fields ... because farmers get stipends for use of the land and villages get tax revenue on income from electricity, which is sold to the national grid at favorable prices by the private companies that build the windmills."

Bad News in Chechnya and Ingushetia

In yesterday's New York Times (here), Ellen Barry reports that the situations in Chechnya, Ingushetia and Dagestan -- after improving for a number of years -- have taken a turn for the worse.

According to Barry, Russia has focused its Chechnya strategy around President Ramzan Kadyrov, whose level of authority is questioned in the face of rising violence:

For years, the Kremlin’s strategy in the Caucasus has hinged on Mr. Kadyrov, with Moscow giving him free rein to crush signs of rebellion in the region.

Mr. Kadyrov, a former separatist himself, transformed his corps of fighters into a brutal internal police force. Human rights organizations documented his government’s use of torture, intimidation and extrajudicial killing, but even liberals had to admit that he had been effective at quelling the violence.

Now, Mr. Kadyrov’s grip on Chechnya looks far weaker, leaving Moscow with a choice about whether to stick with a deeply flawed policy or risk a change of course.

Kadyrov blames Islamic extremists for the rise in violence and alleges that they are financed by Western countries.

In Ingushetia, Dmitri Medvedev had hand-picked Yunus-Bek Yevkurov as President, but Yevkurov was seriously wounded in a suicide bomb attack early this summer.

The photo, by Kazbek Vakhayev from yesterday's Times, shows the aftermath of an August 17 bombing at a police station in Nazran, Ingushetia, which killed 25 people.

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289. How much coverage do the Caucusus areas get in the Russian media? Is it analogous to Mexico's coverage in the US media?

290. How many Chechens live in non-Chechnya Russia? Do they have any political influence?

291. What are the main economic activities in the Caucusus? Is there any tourism there at all?

Turkey's Strategic Importance

An article in this morning's Times (by Sebnem Arsu, here), gave me a sense of Turkey's extreme importance in the world energy market.

Vladimir Putin just reached a deal with Recep Erdogan (who is still Turkey's prime minister) in which (a) Turkey granted to Gazprom the use of certain waters in the Black Sea (so that Gazprom can build the "South Stream Pipeline" to eastern and southern Europe) and (b) Russia agreed to assist with building a pipeline across Turkey, from the Black Sea to the Mediterranean. Silvio Berlusconi was also present for the agreement-signing, although the article does not make clear why.

The interesting part is that Turkey signed an agreement with European governments, just last month, to build the "Nabucco Pipeline," which will compete with the South Stream Pipeline and is an attempt by European countries to undercut Russia's control of natural gas shipments.

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As part of the Russia/Turkey deal, Putin also agreed to reopen talks on Russian assistance to Turkey with building nuclear power plants. Greenpeace members showed up to protest this aspect of the deal.

274. Is Berlusconi still taking heat in Italy for his escapades with the young women?

275. Where does Erdogan stand, relative to other Turkish politicians/leaders, on the Islamist continuum?

L'Aquila and the G-8

The annual G-8 summit is being held today in L'Aquila, Italy. The photograph below is of a church in L'Aquila, where the earthquake hit on April 6.

296 people were killed and 50,000 remain homeless in the region.

The summit was initially scheduled for a resort island off Italy's coast, however Silvio Berlusconi moved it to L'Aquila in an effort to draw attention to the disaster and (presumably) to encourage other nations to contribute aid. However, according to this morning's Post, many Italians are critical of the move because, they claim, the efforts to prepare for the summit have actually drawn focus away from recovery and rebuilding work.

Two of the major focuses of the summit this year will be (1) coordinating the global response to climate change and (2) continued economic recovery efforts. Regarding climate change, the conference to develop a successor to the Kyoto treaty will be held in Copenhagen towards the end of the year.

246. How long will the Copenhagen conference last? Will it be similar to the "Doha Round" of trade talks, which if I understand correctly has lasted for a number of years?

247. In what year did the G-7 become the G-8? Russia was #8, right? Is Medvedev attending on Russia's behalf?

248. Will Obama or any of the other world leaders eat pizza while in Italy?

Russian (and Central Asian) Oil

An article in yesterday's NYT reports that Russia's financial position has shifted dramatically in the past year because of the decrease in oil prices. Andrew Kramer reports (here) that Gazprom entered into a number of long-term purchase contracts with central Asian countries during 2008 -- when prices were at their peak:

In his zeal to monopolize gas supplies, Vladimir Putin, who is now Russia’s prime minister, committed Gazprom to long-term contracts with Central Asian countries for gas at a cost far in excess of current world prices. Now that the world economic crisis has sharply curtailed demand for gas, Gazprom is saddled with a glut of expensive Central Asian supplies that it is forced to sell at a loss.

This is a signficant development for the Russian government because Gazprom is the country's largest taxpayers, and its tax payments this year will decrease from $40 billion to $22.5 billion.

222. Gas prices have increased to about $2.20 / $2.25 per gallon (from less than $2.00 one month ago). Will the increase continue? What's causing it? I get the sense that economists are still very divided as to whether the biggest large-scale concern is inflation or deflation.

Paul Krugman on Ireland's Economy

Paul Krugman, in today's Times (here), says that Ireland is in particularly dire economic straits (similar to Iceland's situation last winter). GDP may decrease by 10% this year, and their government bonds have been downgraded as lenders are uncertain of the country's ability to repay. Krugman blames easy credit for the problems, analogizing Ireland to Florida (was it Krugman or someone else who, a few months ago, said that Spain was Europe's Florida)? The Irish public is having a debate, similar to ours, as to whether the government should nationalize its banks.

G-20 Summit Gets Started

President Obama arrived in London today for the G-20 summit.

Reports about the summit say that Obama and other leaders will gloss over their many differences so as not to further rattle markets or harm confidence.

There have been lots of articles the past couple of weeks about how little the Europeans countries are doing, in comparison to the US, in terms of stimulus spending.

One that won't be discussed as much as it should is protectionism; David Sanger, in an article in the NYT today, says "At the last G-20 summit meeting, participants agreed to resist protectionist tendencies. Few have. By several official counts, 17 nations — the United States included — have taken at least preliminary actions to limit imports or make sure that their stimulus money is spent at home."

170. Who is actually in the G-20?

North America = USA, Canada, Mexico
South America = Argentina, Brazil Europe = France, Germany, Italy, Turkey, UK, Russia, and the European Union as an entity
Middle East = Saudi Arabia
Africa = South Africa
Asia = China, India, Indonesia, Japan, South Korea
Australia = Australia

Fascinating that Saudi Arabia gets a seat at the table!