Can we have a renewable energy efficient Europe by 2050?

The current Danish EU Presidency has pledged to promote for a “sustainable” Presidency, promoting the idea of a sustainable energy efficient Europe, by 2050 if possible.

I really hope so, I really want to see this happening! But I do not think that Europe will manage to switch to 100% totally renewable energy by 2050. I mean look at us; we are having difficulty deciding over what is the best way to tackle the current economic crisis that it is in our door step NOW!! Can we agree on something that will be totally implemented by 2050?

And with the record of many EU states signing up for something but never making the effort to implement it, I hold little hope. Some states are having difficulties absorbing EU funds, or passing all EU laws because of corruption, political idleness and ignorance of the government officials of EU laws.

First we need a fully functioning union, common policies in many other areas to ensure states agree, promote, implement and stick with the decisions taken. We need a quicker way to take decisions and a tool to make sure that those decisions are binding to all states! Yes I am talking about federalism again!

We need to agree on pan European level where can we draw renewable energy from, and in what ways. We got sun and wind in the southern states, wind and sea currents in the northern states. If we could set up European companies to develop and exploit all these resources so that each country benefits first and then share those benefits with the other member states, then that would be the first step.

We could also create new subjects in our universities and encourage our youths to study and explore new professional paths in the renewable energy sector, and promote it as a life-style for all citizens. Create new jobs and professions in this new green sector, so our youths can be absorbed right after they finish their studies; no point of studying something but there is nowhere to go and get and job!

Those new European companies that will be set up will have investors from many, if not all EU states, not just the rich few. We want this to be beneficial for all countries and to kick-start the interest in all states, because if it is seen as something that is “cooked” only by Germany, France, Britain or Denmark and Sweden, it will harder to convince the smaller countries’ citizens to have the same enthusiasm about this new project.

They also need to see it as something of their own, something that is good for them and that they have so much to benefit from it too. Jobs for their children, prosperity, growth, money, better life-style, healthier living conditions (smoke free) etc. So why not attract investors and government involvement from all EU states? And create a new EU body to overseer this new group of companies and the work that they do in each country. But also the actions that our governments take to hasten the implementation of this new plan. In other words, in my opinion the EU as a group of nations should start creating its own kind of "public sector" companies, where our national governments fail to create them!

They won't totally control the new sector, we do not want the centralization and sluggish management of our familiar national public sector companies. But the EU I think should start investing funds to create this new sector, nurture it and help establish it. Kick-start the process. Look for investors, attract interest and support in each country.

We could cut funds from CAP for example, we spend so much in it; way too much in my opinion. We could form a common defense policy so that we won't have individual defense budgets in each state, rather spend or invest collectively! Share the load and invest all this extra cash in this new sector!

Countries like Greece for example spend too much in their defense. If Europe could secure its borders with this new common defense policy and a better united attitude towards Turkey, Greece could invest all this extra cash with the advise, supervision and cooperation of its other EU partners in producing solar energy. The sun in the Aegean can be used n so many other ways by the Europeans, apart from tanning!

My ideal future economic model for Europe!

Our leaders are debating, attending summits trying to find a solution for the current economic crisis. They want to decide which way forward, what to do to save the euro and the European economy. The citizens are looking up to them desperately, in hope of any good news, something that will lift the heavy load of austerity from their shoulders.

In my opinion it is all in vain, simply because our leaders do not have the guts to do what needs to be done: change the economic system of the Continent! Our economies are capitalist, Market based and overall I accept capitalism as a style to base our economy on. But this type that we have as we've seen recently simply does not work for me, not for the ordinary citizens!

We have given the Markets and the Banks all freedom, they have become way too powerful and in fact they are endangering our societies and their coherence. Market economy is plain gambling.

Some powerful people are gambling on countries, companies, commodities and some of them grew to be so powerful, that can make whole countries go bankrupt. They own more money than many of the smaller nations of this World. So how can you stop or regulate such people, make sure that the future of our children is not in the hands of the powerful few?

We see the "peripheral" European states being pushed into the jaws of the IMF, that has done so much damage in the economies of Africa and Latin America. Who decides which country is worth investing in, keeps its AAA, which one must be downgraded and with what criteria?



The current economic system, the Market based free and unregulated capitalism, is set up by gamblers; a culture of easy money! Who controls the Markets, the IMF and the rating agencies? They all are based over the other side of the Atlantic, if you ever wondered.



Wouldn't be fairer to establish such institutions across the globe and have a variety of standards, not just an one sided point of view? We must acknowledge the influence of various lobby groups, investors and supporters of the campaigns of each political party. The lobbies that surround the EU headquarters in Brussels, also play an important role.

For example with money from Europe and the EU subsidies, Greece has now a powerful farming lobby that is not allowing any real change in the country’s economy. But if you look at the map of our Continent, Greece is a mountainous country with very few patches of green, mainly found in Thessaly, Macedonia and Thrace. Yet farming is traditionally one of the main economic sectors of this country, but it is necessary to to diversify it for a more stable economy.


Instead of having some countries leading Europe, sucking up all industrial and economic activity in the Continent and leaving the smaller states fighting for scraps, wouldn't be nice to have a stable economic model for all? Not an elitist one with few rich countries supporting the "peripheral" ones, after having them on social welfare in the form of subsidies for decades.

A solution would come in the form of a federal Europe, with a collective Government that invests in every country and allows it to exploit its natural resources. For jobs, stability, progress and prosperity of its own people first and then to supply the rest of Europe with the best of what each country can provide. Fish from the north, vegetables from the south, minerals from Greece, agriculture from other greener spots of Europe, wood from Scandinavia, etc.

Look at the European map and see which countries are greener; France, Poland, Romania, Hungary. We should be forwarding CAP funds over there and make them the breadbasket of Europe. Greece can still produce only what other regions can not because of climatic restrictions. Then it can provide Europe with its mineral resources, wind mills, solar panels for energy and other resources.

Why not help or encourage Greece to set up a green renewable industry, instead of remaining a limping farming country? Investments in Greece can transform its economy in becoming more industrialized and compatible with those of other Euro-zone countries. 

We can not compete with France as we do not have a huge land mass like they do, that can be farmed. Them and Poland and Romania have vast farm lands. Establishing a well organized farming industry in the new states can kick start their economies, until they decide to invest in other fields later on. Once their economies stabilize they can diversify it.

Perhaps because the farming lobby in the old 15 EU states is too strong, little change is taking place. Just like the fisheries lobby is too strong in Iceland and keep the country out of EU. People that are milking the system and benefiting form the current status quo, are protesting to any change. And our media often are being paid to serve the interests of these elites and form a sympathetic public opinion. 


Europe should provide and protect its people. We must have equality among the member states and investments focused on where they are needed, to exploit the continent’s natural resources collectively. We can have stability, growth, peace and prosperity for all Europeans, not just a bunch of lazy marketers and bankers.

Why I agree with Sarkozy on the FTT.

French President Nicolas Sarkozy has made it quite clear he is determined to forge ahead with a controversial Financial Transactions Tax (FTT), even if it means his country is the only one to implement it. It seems likely then, that some form of FTT will be introduced in 2012, though it remains to be seen whether such a tax will be at the level of the EU, the Euro zone, the new “Euro-zone Plus” group…or just France.

The European Commission has been pushing for an eventual EU-wide tax, and its proposal was presented to European finance ministers last year by Tax Commissioner Algirdas Šemeta.

Commissioner Semeta commented on the Debating Europe website topic on the issue (here),  answering to some comments, that the financial institutions will just pass the charges to the customers.

It is important to be clear on the scope of the proposed FTT. We want to tax the trading of financial instruments like securities, bonds and derivatives, not the day-to-day financial activities of ordinary citizens or companies. The conclusion of insurance contracts, mortgage lending, consumer and business credits or payment services will, for example, not be included in the scope of this tax. More than 85% of all the transactions to be taxed are transactions within the financial sector, where, for example, one bank trades with another one. So, there is no direct client immediately identifiable to whom the banks might want to pass on the tax incurred.

 Thus, citizens, private households and SMEs will not be directly affected by the tax, unless they themselves invest on financial markets. However, they might be indirectly affected by an increase in capital costs and lower financial asset prices in case financial institutions want to recover the cost of the tax from business with their clients not linked to financial markets. But these effects will probably be limited as the tax rate proposed is low and would in the first place fall on financial companies. 

Even if the bank was to pass on the FTT to its client, such as a private household, the additional charge would be rather low. In case a private household was to intervene on financial markets, for example through buying or selling shares, it should only be charged an additional 0.01 to 0.1% of the transaction volume. If a private household wanted to purchase, for example, shares in the amount of €10,000 his bank might charge a €10 FTT for this transaction. Of course, the more frequently a person traded (with the help of his bank) on stock exchanges, the more frequently the investor would have to pay the tax.

  

It is, indeed, expected that the shareholders of the banks and the investment bankers will have to shoulder parts of the tax, for example through lower dividend payments and reduced bonuses paid out. This effect would not be unwarranted, as a golden rule of sound public policy requires that those benefiting from a public policy should also be those that should pay for its provision.

Another point was that financial institutions will just move to places like Switzerland, where there is less regulation. Mr Semeta replied: 

The FTT proposal should be seen as a key step to making progress on a global solution to taxing financial transactions. A global FTT is the first best solution. The Commission has always been in favor of an FTT at the global level and we think that it would make sense to support this position by leading by example.

We believe that if we can show that such a tax works also at a (sufficiently broadly defined) regional level and generates substantial revenue without harming the overall economic development, then other regions of the world will follow. However, any “local” FTT needs a number of anti-avoidance and anti-relocation measures. 

We want to set a good example to promote the FTT at the global level – as has been asked from us by the European Parliament and the heads of state of the EU Member States. The Commission is not the only one to advocate this idea – there were many supporters at the Millennium Development Summit in NYC recently, for example, but it is true that there is no universal consensus.

We will continue discussing this with our G20 partners. I think the sounder, more solid the evidence of the potential benefits of such a tax we can provide, the greater our chances are of convincing them to work with us on a global FTT.

Nevertheless, already with the legal proposal of the Commission there are a lot of potential loopholes that have been closed. Actually, relocating a transaction (for example, from Frankfurt to Zurich) does not really help in circumventing the payment of the tax, as it is not the place where the transaction takes place that determines tax liability but the place of establishment of the parties in the transaction.

Next argument that was expressed by debaters on the website was the case of Sweden and its experience in the late 1980s. The imposition of a FTT on equities and bonds was a total disaster as trading simply moved overseas. Mr Semeta commented: 

Sweden introduced a 50 basis points tax on the purchase or sale of equity securities in January 1984. A “round trip” transaction (purchase and sale) resulted therefore in a 100 basis points tax. The tax applied to all equity security trades in Sweden using local brokerage services as well as to stock options. The fact that only local brokerage services were taxed is, in the literature, seen as the main design problem of the Swedish system.

We studied different countries’ experiences and we designed the tax carefully to avoid the kind of failure Sweden experienced. The Commission’s proposal includes in particular the following features:

• It has a much broader tax base;

• It makes a link to the residence of financial institutions at EU level;

• It considers financial institutions of third countries with a branch established in the EU or even without such a branch, i.e. makes them taxable; in the latter case when they interact with EU counter-parties (subject to certain conditions).

To put it in other words: Sweden covered local brokerage services whereas the EU FTT would cover transactions by broadly defined financial institutions established in the EU, including pure third country-based institutions when they interact with EU counter-parties. In case of the EU FTT, an easy evasion is not possible if there is a link with the EU territory. Joint and several liability rules ensure enforceability. In addition, a possible move from equity trades to other financial instruments would not be an option under the EU FTT as financial instruments are comprehensively covered.

Moreover, an EU framework provides for a coordinated approach in the EU which should mitigate the problem of relocation and distortion of competition.

The final comment was that the FTT actually does not bring any extra revenue, in fact it shrinks them. Mr Semeta replied: 

The Commission’s extensive analysis show that the implementation of an FTT at EU level, provided that the negative impacts of major risks identified would be minimized, could raise around €50 billion per year, largely depending on market reactions. Also, in case the profits of financial institutions were negatively affected, some offsetting knock-on effects on profit taxes could be expected. The tax will, thus, help to generate revenues for the public budget which could be used for different purposes.

There is indeed a degree of uncertainty on the revenue from an FTT, because it would be a new and innovative tax, and as asset prices underlying these transactions are volatile. This mainly holds for shares and derivatives thereof. Hopefully, also the market volumes for government bonds should decline once budget consolidation progresses. This risk can be managed by using cautious projections for the budget.

When it comes to estimating the effects of such a tax on GDP, a lot of uncertainty exists as well. The figure of 1.7% refers to a deviation of GDP from its baseline scenario in the long run. Thus, it describes a cumulative effect over several decades, while the revenue estimations provided refer to annual revenues. Also, some of the assumptions underlying the concrete model run (such as the design of the tax and the way how enterprises finance their investment activities or how the revenues generated will be recycled) introduced a significant bias in the estimation. 

Correcting for these effects, the more appropriate figure might therefore be in the order of 0.5 to 1.0%. In any case, we should not forget that such figures are derived from macroeconomic model simulations which are specifically difficult when it comes to analyzing financial markets.

My personal opinion was always “make the financial sector pay!” Someone needs to regulate this sector and it is about time to do so, as we have seen what non-regulation of the Banks and the Markets can do. What should be done with any revenues raised? We should use them to erase and pay off any debts of the debt ridden countries. First in Europe if the FTT is passed, or the whole World if this plan takes a global dimension!


As for if the UK will be able to avoid the FTT, I insist that they should not. Enough with this elitism. Elite countries, nations, people, clubs and institutions. Enough with the tax havens and financial centers of the world. Some countries are only separate states from other nations just to serve the role of a tax haven for the rich, while the rest of us are trapped and pay their share. (San Marino from Italy, Monaco from France, Liechtenstein from Switzerland, ect).

What these countries are actually doing, is forcing some countries and its people to be poorer from all this tax revenues lost while others are becoming richer, thus contributing to the global inequality. The sole role of their existence is to be a safe haven for the money that is in some cases stolen from the people.

This money belonged to the people of those countries as taxes that were diverted in Swiss (and other tax havens') bank accounts. Taxes of the rich people that should go to the state, while the ordinary citizens have to bare the weight of paying their share. This can be only called a criminal activity and Switzerland is a part of this.

In a similar way, Britain plays its part in this Matrix of financial games and inequality, as they are “one of the most important financial centers in the world.” So they should own up to it and start playing fair. Their wealth is down to their role as one of the countries that has made itself available to the global financial elite. Becoming in this way a place where the financiers are allowed  to play uncontrollably their games, making profit for themselves.

Bring on the FTT and thank God that some politicians have the guts to suggest such bold moves that  if passed, they will probably be the first step towards a much fairer Europe.

Dividing and ruling our societies.

One of the main effects that the current crisis in Europe and the euro-zone had in all the badly affected countries, was the public sector vs private sector debate. Privatizations were encouraged and many of the social benefits were targeted and cut.

To achieve that, our leaders practiced the very successful tactic of "divide and rule". Dividing the public and turning it against each other, making each side blaming the other for the country's bad economic state. The public sector was targeted, in order to gain public support for the drastic cuts that it was about to endure.

We have witnessed such debates in both countries. While in Ireland the debate has somewhat subsided, as there are no more cuts in salaries announced in this year's budget, in Greece that the public sector is severely hit the debate still goes on.

Our leaders put the blame on the people for the country's bad economic state. Mr Pagalos in Greece, a member of the Greek Parliament and the former PASOK government, and Mr Ahern in Ireland the former Taoiseach both blamed the citizens for the mess.

And while this is partly true, the only blame I could put of the people's shoulders is that they keep voting for thugs like the above. Not for doing what they are encouraged to do by the current capitalist system, that is spend money and keep consuming.

In order to gain public support in Greece for slaying the public sector, they kept underline its faults and abuses that they have encouraged over the past decades in the first place. All they want to do is sell out all national assets and companies. To do that they slander a whole group of people, that were just sucked in by the system our Governing elites have created.

Yes Greece has an overgrown public sector. But it is the only sector that a Greek could have a secure and stable career path, since no other industries were developed in the country. If you are not a farmer, a tourism industry employee or a customer and sales services staff, you have limited options of making a living in Greece.

There are no industries left in the country as most of them have left to relocate in places like Bulgaria or China. The little industrial activity that is left in Europe is being sucked up by the northern, industrialized, rich European states.



The Greek public sector certainly needed to be cut down, but not in such a drastic way. First you create other industries for people to find jobs in, then you fire public sector workers so they can find jobs in those new industries. Now that they are about to fire hundreds of thousands of people with such high unemployment already in the country, where will all those people go?

You are pouring more people on the dole. You will be having them on social welfare paying them for doing nothing, while they would love to work and contribute. How come is paying hundreds of thousands of new unemployed going to help the economy? Less people that work and have money, less taxes paid, more benefits to be paid out, less money in the country's market.

And to justify all the above and achieve them, our leaders made the private sector workers angry against the "lazy" public sector workers that work so little, earn too much and in a way they are responsible for the country's state. So everybody applauded when the cuts took place and the new austerity measures were announced against the public sector workers.

Now that the public sector workers have no more money to spend, they do not pour any money into the market. They do not use their money to shop, use taxis, go out dinning,travel or stay in hotels. In result, the private sector workers are feeling the pinch as well. Because once the money from the public sector workers are not being poured into their businesses to pay for their wages, their salaries now are being targeted by their employers and they have to take cuts as well.

Yes there was a lot of mismanagement in the public sector. But it was a systemic fault, it was simply bad management. Our Governments could have reformed all that but instead they chose to use the public sector as a lure for votes and support in each election. They were using it to ensure they stayed in power by promising a job to the desperate Greeks in the public sector, a secure career prospect.

The only fault that the Greeks have made, is not that they kept spending, nor that they wanted to go and work in the public sector, a sector with the only potentials in a small country. They only mistake that the Greeks and the Irish have made is that they kept voting for the same Governments over and over again.

Because unfortunately in a country like Greece that the public sector was an important part of the country's economy, its destruction means the destruction of the Greek economy itself. What they should have done is start those reforms years ago, gradually.





The citizens of the euro-zone countries that are in trouble, instead of turning against each other, they should turn against their political elites. They should unite and debate on how they can change attitudes, moving forward in the future.