The end of an era

In a previous blog I wrote that four years on, and in spite of all the media coverage, the “Financial crisis” still remains vague, distant and virtual for many people, something you read in the news or see on TV, something that happens to others, elsewhere or to big banks, with the notable exception, of course, of one high-profile investment bank who still manages to make a profit out of a loss.

But that’s changing. The impact the “Financial crisis” is having on the inhabitants of Greece, Italy, Spain and Portugal leaves most of the 378 million inhabitants of the other 23 EU member states, including myself, shaking their heads trying to understand how it got that bad there – or observing that its only logical for certain states to have align retirement ages to those of neighbour states or, have to upgrade their computer IT infrastructure to speed up the collection of ± 10Bln Euros in outstanding internal revenue or professional taxes because Brussels told them to, as is the case in Greece.

If there are still any in the European Union, perhaps a minority now – i.e. those who expect to receive their share of the dividends due to be paid out in 2012, who don’t [yet] feel concerned, be they continental or insular; who think they’ll slip through the problem – as they would a closing door before it snaps shut. Those who feel it’s not affecting them, not really, not yet or not perceptibly but don’t worry, like some pervasive VAT hike*, it will!
(* As I write the French government are publishing a decree to implement what is called a “Social” VAT. In a nutshell this “Social” VAT will, on one side, deduct 40 billion euro in professional/company & social charges and on the other side, increase the VAT by 4 points, from 19.6% to 23.6%. The “Social” part of it is that companies and workers will pay less charges but because VAT on products, even essentials, will have been upped everybody will have to pay more when they go shopping! I will let the reader mull over the “Social” ramifications here, if there are any.

Life goes on regardless.

For the majority of people, Christmas has come and gone, the New Year underway and people, having little or no choice, carry on with their lives, regardless of the cost of the Christmas festivities and regardless of what may be looming in 2012. I can’t say, and I won’t insinuate, that it’s doing the “Ostrich” thing by not appearing to care what happens to others but when it’s a full-time job just making sure there’s a paycheck at the end of the day and, when possible, trying to make life a little better, you tend to leave it to the politicians and the economists, after all, that’s what they’re there for.

And then something happens to you personally that makes you realize that whats happening in Greece, Italy, Spain and Portugal is also happening, albeit imperceptibly, on your own doorstep, or to be exact at your local food-store.
All that because of something the employee at the checkout said about the loyalty/reward/points/advantage MasterCard you’ve been using for the last 10 years. It’s then that you understand that things will never be the same again, it’s the end of an era.

The “Grass is always greener” syndrome

As an inhabitant of an EU member state, you have to look at the situation in Russia and the USA and then look at what certain protagonists in Brussels want and weigh up the pros and cons of a federal EU. Personally, I’m in a quandary.

On the one hand, I can’t help seeing David Cameron’s “English” point of view (I say English and not British because Alex Salmond may just not agree with David Cameron speaking on behalf of the Scots!)

There are arguments for unifying Europe, and that comes from someone who has fully benefited from a Europe without borders ever since the UK joined in 1973. Someone who, for having worked in several EU member states for numerous years, is looking forward to a retirement pension of European dimensions.

A Europe without borders? Yes, but with the appropriate fail-safes

While I do think Europe without borders is a good idea I also think the appropriate “fail-safes” are needed. With more countries looking to join the EU because of the security it brings (ex: Romania and Bulgaria in 2007, Croatia by 2015) the EU will need to come up with a coherent plan to tackle issues such as unemployment. But today’s current financial crisis may cast a shadow, or may definitively terminate the plans of certain non-Euro currency countries looking to join the Euro zone and, in view of the Greek debacle and how they were allowed to join the euro-zone in the first place, that may not be a bad thing.

Rules need to be established – and I don’t mean “what percentage of bread can be put into sausages” or “how much animal fat can be put in chocolate”.   Guarantees must be provided on both sides (why kill the goose that lays the golden egg?), bureaucracy must be curbed and more transparency demanded of candidate states, i.e. Will certain high-profile investment banks be counseling the perspective member states on how to align their budgets to euro-zone requirements? Will they offer complex financial products as part and parcel of their service offering?

So, whether it’s me having to revise my monthly budgeting, because the food-store’s new reward/credit card no longer offers the delayed payment facility I had with the old card (remember the cost of the Christmas festivities?), or the EU, tired of being perceived as a providential solution for ailing economies or geopolitically unstable or immature states, times have changed, an era has come to end and both the EU and I will have to adapt and come to terms with a new era and a new context.


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