Greek and French Elections 2012. The aftermath.

What an eventful weekend we had in Europe, with two EU and eurozone countries having elections, that could reshape the current economic and political agenda in our continent. The Markets are already responding negatively, in what they think is a bad sign for Europe's road to recovery and economic stability. From the political point of view, the results are a clear message of the people to their governing elites and a sign of a turning point of Europe's politics for the past few years.

In France we saw the victory of Francois Hollande over Nicolas Sarkozy. Hollande, a socialist, clearly based his campaign against austerity and he said that his victory is a message of the French voters; they voted for him because they reject the austerity measures that were encouraged by the "Merkozy" collaboration, or the  French-German axis as many have described it. What remains to be seen now is how will Berlin and Paris continue this cooperation and what the future is for the Fiscal Treaty. In Ireland we are having a referendum on it very soon and some now are suggesting that there is no point of having it, or that we should postpone it.

Mrs Merkel has already congratulated Mr. Hollande for his victory and stated that she will expect him in Berlin with "open arms," but the future of the Treaty is not negotiable. She expressed that she is looking forward to their cooperation. What will be the new dynamics that will form and where will this new cooperation lead Europe? Will Mr Hollande keep his promises and how will Germany and Merkel react to his positions? Will we have an end to the austerity policies imposed all over Europe and will Hollande be influential enough to gain the support of other EU leaders to change the European austerity agenda?

We have a socialist government back in France, after 17 years. All this time the conservatives were ruling France, one of the three main European powers and it will be interesting to see how this new combination of a socialist France and a conservative Germany will lead Europe. Merkel obviously favored Sarkozy, but I feel that we needed more balanced European politics. For me it is a positive outcome, we need a powerful socialist eurozone country to counterpart a conservative one. We need both voices and opinions to control each other, but I hope they are going to be able to cooperate for the betterment of our continent.

Mr Hollande views on what needs to be done to stimulate growth are totally different from what Mrs Merkel and Mr Sarkozy were favoring. Instead of cut backs and austerity, Hollande favors the increase of public spending, with a raise of the minimum wage and more investing in the public sector. Of course a compromise will be needed from both sides and that is what makes it so interesting. What will eventually got to give?

Another very interesting outcome of the French elections came from the previous weekend and the first round of the electoral campaign. The far right in France saw the public's support rising and they manage to get almost 20% of the votes. Led by Mrs Marine Le Pen, the Front National (FN) party in France came third in the elections and that adds one more country to the chain of many other in Europe that are turning to the far right. Fed up and disappointed with their government's mishandling of their country's financial and immigration problems, the people are seeing nationalism as the only way to protect their way of life.

And that tendency was manifested in the Greek elections too, in one of the most dramatic electoral results in the recent Greek and European history. The Greek voters punished the two mainstream political parties, by turning their backs to them. But that is the only good thing that came out of these elections. In my opinion, it was about time to end the monopoly and dominance of PASOK and the New Democracy party in the country's political life. They are responsible for Greece's demise, as they were in power for the past seven decades, each replacing the other.But in what cost?

The Greek people, fed up with the austerity imposed on them, voted off the parties that supported the EU/IMF bail-out deals. LAOS is out of the parliament, PASOK came for the first time in its history third and New Democracy even if it came first, saw its popularity plummeting. A surprise came from the radical left party Syriza that became the second strongest party and its leader Mr. Tsipras the youngest party leader to enter the Greek Parliament. The most worrying development that we witnessed in these elections was of course the entry in the Greek Parliament of the far right, neo-nazi party the Golden Dawn. They got 20 seats in the parliament and 7 % of the votes.

In my personal opinion it is a disgraceful and shameful result for our nation. In a country that lost one million people during the WW2 because of the Nazi atrocities, to have a neo-nazi party in the parliament is totally disrespectful to all those dead. But I am not blaming the public. What can you expect from the average citizen when the political parties who they trusted all these years to provide a better future for the country, have greatly let them down. Greece's economy is in tatters, the country's reputation is damaged and there is a real demographic and immigration problem that is left unchallenged.

When the supporters of the Golden Dawn, escorted the elderly Greeks to go and collect their pensions in central Athens protecting them from criminal attacks, is it any wonder that they won the public's support? The are the only party who promised to do something about the problem of illegal immigration in Greece, while the two main political parties failed to even put it in their agenda. Illegal immigrants are turning to criminal activities to sustain themselves and make a living, bringing them in clash with the native population. A clear and updated immigration policy would resolve the issue, something that the established political elite of Greece has so far failed to agree on.

The debate among the public before the elections was very interesting and it gave clear signs of what was to come. A growing number of Greeks vowed not to vote for any of the two main parties. They felt that those parties did nothing all those years to solve the country's problems, so why would they now. Speaking with friends and relatives prior the elections, I got some interesting feed-back. Some admitted that they intended to vote for the Golden Dawn party, because it was the only one to promise solutions to Greece's immigration problem. Others said that they would vote for PASOK or ND because their parish priest advised them that it would be good for the country, while some others because they would bring stability. And some turned to the left or communist parties, or any party that opposed austerity and promised to reverse the deals that were signed during the EU/IMF bail out agreements.

The result from these elections is hard to predict. Instability and uncertainty is the only sure thing. Even if the New Democracy won the majority of the votes, it is marginal. To form a government they will have to collaborate with another party. The Golden Dawn has rejected such collaboration, while the leftist Syriza party is also not negotiating. That will most likely lead to a PASOK-ND collaboration perhaps with a third party. Some already fear that the negotiations will fail, Greece will be unable to form a government and another election will be needed by mid June. Some others see no point in all this and believe that we should have voted for PASOK or ND to ensure the stability the country needs, leaving our disappointment and anger aside.

The last group claims that nothing has been achieved by shaking up the monopoly of the two main parties. We will have more elections until we get a functioning government and the Greek people will eventually vote back for either PASOK or ND to ensure that. Others think that a coalition government will be formed anyway and will most likely be formed by ND with the assistance of PASOK and another willing party to stick to Greece's signed obligations to the EU, Europe and the eurozone. But who will that party be, knowing that they will become very unpopular among the Greeks.

Others are pleased for teaching a lesson to the political established elite of the country, notably the PASOK-ND parties and challenging their dominance. In my opinion it is a positive outcome, one long delayed. We need new blood in our country's politics, we need new voices and new ideas to deal with our people's needs and worries. I was just hoping that far right and far left groups were not the ones who gained the most. But as some claim, such thing is inevitable; populism is always what the voters go for when they are dissatisfied with their governing elites.

Now we have to deal with the Golden Dawn and its leader, Mr. Michaloliakos and their antics and ridiculous ideologies. In an press conference after the party's victorious entry to the Greek Parliament, the attending journalists were asked to stand up in Mr Michaloliakos' entry into the room. Those who refused to do so, where ousted by the party's members! Not a sign of a democratic party, rather a military organization. Not something that I, an 100% pure Greek descended male, will be proud of.

To conclude, the message from both elections is that the Europeans do not want anymore austerity, but they do want more security, prosperity and national pride. They want jobs and better living standards, they want a country that they can feel proud of, a just society to live in. The more their governments are ignoring them and favor policies that serve the banks and the markets, they more far right and left elements, populism and nationalism will be finding their way into Europe's politics; but only for the detriment of our continent and its people. I hope that some good will come out of all this and that should be a more functioning European democracy, on a national and European level.

"We are all Greeks" movement. What is its relevance for the average European!

For the past few months we have been witnessing a new wave of "philhellenism" sweeping across Europe, in support for the Greek people during their ordeal in battling the economic crisis.

After an initial criticism and uproar, European people finally are starting to understand that Greece has been wrongly accused as the "deceiver" in the European family; if anything, the deceivers are the European governing elites.

In France, Germany, Holland, Ireland, Italy, Denmark, Finland and other European countries and their capitals we had protests of support towards the Greek people. In social networking websites there have been numerous pages created, stating their solidarity to Greece. But one of the most moving cases was that of a number of Italian mayors, donating their monthly salaries to the poverty stricken Greek families.

First of all we need to understand that Greece is not the cause of this crisis; it has actually originated in America. Greece is not the only country who overspent, all western economies are heavily indebted; that is the economic model we all followed. And if we look at Italy, Portugal, Spain and other EU countries, Greece is not the only one rigged with corruption, outdated social policies and lack of  reforms.

The reality is that the euro-zone was flawed by its creation and foundations. Its flaws were manipulated and exploited by "The Markets," a powerful group or lobby of investors, bankers and speculators-high society gamblers if you ask me- that make profits out of currency manipulation. It is not the first time we experience such thing, we witnessed the attack on the British sterling by Mr. George Soros and his companies. Now it is simply the turn of the euro.

Just to examine where the euro-zone is flawed, when we have two countries- Germany and Greece for example-  engage in free trade, the country with the slower rate of productivity growth normally experiences a depreciation of its currency. But currency depreciation need not occur. 

There are other possibilities: its workers' wage rates could grow at a commensurately slower rate; it could experience ever-increasing unemployment; its workers could emigrate; or it could find some means of "validating" its increasingly over-valued real exchange rate. Greece chose the last of these options. And the means it chose to validate that was to increase government spending, financed by borrowing. 

Over the last decade, unit labor costs in Greece have grown by about 30% more than in Germany. This implies a 30% effective appreciation of Greece's real exchange rate. The validation of a real appreciation of that magnitude has required a lot of government spending and such a fiscal stance was bound to prove unsustainable. 

Greece is not the only European country in this pickle. Whether the Greek and European body politic can now weather the fiscal burdens of an adjustment without breaking the euro currency system, remains to be seen. (Written by Mr Peter Drysdale, Emeritus Professor. For CES).

In other words the crisis has nothing to do with the "lazy, corrupt" Greeks, the P.I.G.S. or any of the other nonsense that our media have tried over the years to manipulate the public opinion with. In fact we are not witnessing the interests of one country going against the other in this crisis, that has been admitted by many European leaders and top EU officials. What we have is the war of interests of the creditors and the investors in each country, that want to secure their investments and if possible make profit.

By influencing the public opinion of a country through its media, the creditors push their governments to adopt measures that will promote either protectionism of their own national social policies and resources, or undermining other nations'. And so we ended up with the Germans calling the Greeks lazy and incompetent and in return the Greeks calling the Germans Nazis, recalling past traumatic and unfortunate events in their history.

Greece is not the only problem in the euro-zone and not the biggest. To slander one nation in this way, is no better than what the Nazis did back with the Jews during WW2. Us Greeks are being used as the scapegoat of this crisis, by the European elites. They put the blame on us for their own mistaken policies, that allowed the weak spots of the euro-zone to be exposed and used by profit mongering corporations.

The only good that came out of this crisis is that the Greeks now, after decades of political idleness are re-evaluating their stance and personal involvement towards their country. They are debating on what kind of society they want to have in the future. They are becoming more active in the political life of Greece and are starting to have a vision for the future of their nation. It only remains to be seen if their leaders or the European elites are sharing their dreams and deliver this time.

Of course the downside effect of the crisis in Greece is similar to this of other countries. In Finland we had the rise of the True Finns party, in the recent on-going French election we saw the far right party of Marine Le Pen gaining almost one fifth of the votes. And in Greece we see a surge of nationalism, xenophobia and euro-skepticism, that will most certainly have an effect during the upcoming elections.


The Greek blog-sphere is rife with different scenarios and conspiracy theories, anti-EU/European and anti-euro sentiments, patriotic messages and potential solutions that somehow all involve or predict the collapse of the euro- even the EU; or simply Greece's exit. Some others' purpose is to simply inspire their fellow Greeks to be strong and proud; to reinstall some national pride anyway they think it is best.

An average European can relate to Greece now, because the crisis is not being seen as a Greek "sickness" anymore. All euro-zone member states have borrowed too much and contributed in the block's woes. Whatever happens now in Greece, Portugal and Ireland will most likely spread to other nations too. Our economies are so intertwined and exposed to each other, that will be impossible not too. We are seeing it already spreading to Spain, Italy, France, Belgium and Holland.

Our leaders are using austerity as the only solution to deal with the crisis. They want to reform the social structure of the continent in the future and life for a worker will be very different. Even if some countries escape this reality, they will have to keep contributing financially to support those countries who have to face tough austerity measures. In other words, they will have to keep bailing out the "peripheral" states.

It seems so that no one will escape the consequences. There is also the moral dimension of the issue, of the kind of "European solidarity" are we claiming to have, when we are allowing nationalism to pull down everything we have built during the past few decades. Do we want o reinstall the walls in Europe, turn against immigrants and each other, do we want to go back to a Europe of restrictions, divisions and fanaticism?

Just because our elites messed up, got too greedy and overconfident with the success of what they have created, it does not mean that we have to turn our backs completely to what we have and what we have achieved.


Time to give them a message, that we stand united and in solidarity with each other. We are all Greeks, we are all Irish, all Portuguese, French, Dutch, Spanish, Italians. We want the same, a stable prosperous future, equality, transparency, democracy and opportunities. It is time to be part of our country's and continent's political life and get involved.

If Europe's people/workers actually manage to pass this message on a united front, it will be difficult for our elites to ignore us. It is not about Greece anymore, but about Europe and the future of our continent. Will you leave the Greeks, the Portuguese and the Irish to stand alone? Show your solidarity now, because your country, your jobs and the future of your kids might be next.

Economic Ideas Forum. My opinion on what's been discussed!

The general experience of attending such forum with so many high ranked Irish and European officials participating, was certainly positive. I have to admit that it was very well organized and orchestrated, with interesting current topics to discuss and debate on. The venue they chose to host the event could not be better. The Dublin Castle is an amazing building and of a great historic background, beautiful decorated and preserved. It used to be the seat of the British rule in Ireland, until it was handed over to the Irish State in 1922.

The main topic and reason for the forum was of course economic. Ways to deal with the current economic crisis, what reforms are necessary and in what best way to implement them. With a lot of the things I have heard I agree and I have embraced. It is no lie that Europe needs to reform, it needs to sort the mess that it got itself and its citizens into, with decades of going in circles on the name of protectionism, the interests of the markets and the banks and the so called "national interests".

Well how national are some of those interests is another matter; but once you create something like what we have created in Europe, a sort of a political and economic block, you are going to have to continuously reform it and  modernize it, to keep up with the new challenges that the changes in the world are bringing. And in our case, the case of the EU , the more states join, the more ties we develop with each other, the more we harmonize our economies and policies, then the more we are exposed to each other.

And now that a crisis is engulfing all our continent the solution must be found collectively. So I totally agree with Mr Tajani that Europe needs a new industrial revolution. We have outsourced a lot of our industries in China and other countries, so we left Europe exposed in many ways and our citizens with less opportunities. I also agree about the full fiscal union, since we have launched the euro and we have one currency and one market, we only have two choices; either go back or forward. Now we are somewhere in the middle of things and the weaknesses of the eurozone are easy to expose and be exploited by the Markets.

Besides we really need to be prepared for the future; as this forum concluded, the world is changing and in the future Europe will not be one of the two major players on this planet. We are entering a multi-polar world and that is good. But it also comes with many challenges. The best way to deal with it is to keep reforming and modernizing; the problem is how!!

In my opinion austerity and salary reductions are not the way. At some point during the discussion the Baltic states were praised for taking this road during the '90s, in order to reform and join the EU. They brought them as an example for the countries that are forced to go down this road now days, like Greece, Portugal, Ireland, Spain and Italy. Well I have to strongly disagree. I have visited Estonia recently and while the economic growth and development are obvious, the nation's salaries are very low.

 A reason to invest in the country one would think, but talking with the locals they told me that "every one who can leave Estonia, leaves." Because of such low salaries, the Estonians are preferring to leave the country and go and work to Finland, Sweden, Germany, Denmark, Ireland and the UK. So while the ship is plain sailing according to the economists, the sailors are abandoning the ship. Is that what they want to achieve in other countries as well? Mass emigration? There are already talks in Greece that their salaries will be reduced to the level of Bulgaria (of course that is just theories at the moment, but people are afraid indeed).

And how about the idea of of tax and salary harmonization that were also mentioned? How are they going to harmonize the salaries? Will they bring half of Europe's salaries down to the level of Bulgaria while keeping the high salaries of the rich countries, creating an unequal Europe? Or perhaps are they going to bring all countries' salaries down, because I would love to see how are they going to convince a German, Dutch, Luxembourgian or Swedish to accept similar salary cuts that the Greeks had to endure recently. But maybe they mean that eventually the salaries of the rich countries will go down a bit and the ones of the poorer countries up a bit so they can come to the same levels eventually. That would be the fairest option but how will the citizens of the rich countries be prepared for some changes in their pockets?

As for the taxation harmonization, though it maybe the right thing to do to complete the process of the fiscal union, some countries are heavily relying on their lower taxes; like Ireland. In order to persuade it to get rid of its lower taxes and harmonize them with the rest of Europe, then what kind of compensation will the other countries give Ireland for example for doing so? Because once Ireland accept the suggestions by France and Germany, it will willingly lose a lot of revenue and jobs for their people; will the Germans and French then come and create jobs, build factories in Ireland to compensate them for the jobs lost from American multinationals that will definitely move out from Ireland? If yes, then I am all for it.

There were many other good ideas though suggested, notably by Mr. John Bruton; for example the common banking market, more control of the banks, a stronger ECB and EU Commission, pan-European elections for an EU President, more democracy and transparency in EU, the importance of education and its reforms, the reforms on the banking system and investments in new technologies. All these sounded like music to my ears, as long as they are implemented and do not stay on paper only.

Then of course the subject moved to the Social Europe issue and its policies; policies that most of them agreed that need to be reformed or discarded, as Europe will not afford in the future to give generous pensions to its citizens and that Europeans must learn to live with less social welfare benefits. And lose security in their jobs, in order to make Europe more competitive. Here is an issue I totally disagree, or I am sceptical of how it is going to be implemented.

They spoke  about not being able to pay our pensions in the future. But how can we pay our pensions since there is high youth unemployment in our countries; youth unemployment equals in inability of young people to start families and have kids. Which in result means less future workers, less tax payers in the future, thus less people contributing for the pensions of the elderly. What they want to do is either make us all pay for our own pensions, or we get no pensions at all. And of course increase immigration into Europe, to replenish the European population. But wouldn't it be better to give initiatives to young people to find labor stability early enough, start families and have children? They have admitted it themselves that is scandalous the high levels of youth unemployment in some countries, so why don't we create more jobs now, instead of talking about it?

And if we have to pay in the future for our pensions, then why contribute taxes for it out of our salaries all our working lives? Perhaps we should stop paying them, get higher salaries and invest these extra money in private pension schemes. But paying for social security for decades and then not getting any? That's absurd! Mr. Richard Bruton even said that those reforms must happen in a humane way; well I should hope so, because from what we have seen in Greece, the reforms took place in the most inhumane way thanx to the inability of the Greek political elite to reform when they should have.

Then other issues were discussed like Europe's relations with the USA. Here I did not participated much because I did not want to offend some of the speakers with my rhetoric. They did admit that the USA has delegates in Brussels that influence EU's policies by lobbying, but there were no European delegates in Washington to do the same. Well if we are talking about closer ties then this is essential for sure. Otherwise we will have an unequal partnership, or rather a "master and servant" situation. I am all for free trade between USA and EU, but only if it equal and it flows both ways. Will the Americans be happy to have goods from Eastern Europe flowing into their markets? Because I should hope that they did not mean that only American goods will enter European markets, or only Western European goods will be promoted in USA.

And how about movies, music and other cultural "goods?" Why do we have thousands of American artists, songs, movies, celebrities and actors dominating our cinemas, charts, and social life while we see hardly any European movies entering America? Why must American actors, directors and movie producers find always a job, have more success and earn more money than their European counterparts? And why must only American culture dominate the West?

Or how about the issue of free travel, with no hassle. Recently the European Parliament approved to hand out EU citizen's data that are visiting the USA, over to the US authorities. If I am being treated like a potential threat before I even set foot on their land, then why bother? Why not visit Budapest, Paris, Prague, London or Madrid instead of New York and Washington and spend my hard earned euros over this side of the Atlantic. And do it without the hassle, with the same currency in most cases and without the need to pass any personal information to anyone. If we are talking about free trade and strengthening European and American relations, then they better have a look at those issues too. 

Otherwise I am all for more European integration, if it is done for the benefit of the people and with their best interests in mind; and of course their support, opinion and permission. When I questioned the panel how are they going to win back European support and trust in the EU and the eurozone that have been shaken with the recent crisis, I received the usual waffle from the panelists. They either did not understand my question or they avoided to answer directly. Or perhaps they have nothing included in the upcoming policies to show to the people why they must keep supporting the European project and what do they gain out of it. I think it would be crucial to do so, don't you think? It was even discussed why what is being discussed in the Council of the European Union meetings, is not being announced to the citizens so they know what is happening and why it must happen! But why aren't they?

I would love to see a lot of what they talked about implemented, others definitely not and some I am waiting to see the manner of their implementation. What I really want the result of all this to be, is to see Europe more united and wealthy in all corners again. But if that means a Europe of unequal salaries and prosperity, a Europe of the few and safeguarding the monopolies of the elites, then I won't go into the trouble to write pages of protest speeches; because they need to be careful of the rise of the far right that happens all over Europe. They are going to be their nemesis, the citizens are watching and punishing with their votes. I wish them the best of luck with their work.

I would like to thank CES (Center for European Studies) for their invitation and the opportunity to be part of that great event. The information, ideas and brain power was flowing and the privilege to be able to listen to those important men and women discussing the future of Europe was certainly my honor and in some cases inspiring. I thoroughly enjoyed it and I am looking forward to the next similar event.

Economic Ideas Forum, Dublin Castle 2012. Day 2.

The second day of the Economic Ideas Forum started in a more laid back atmosphere and lunch at 13.00 pm. After that, the fourth panel of talks was introduced with an opening speech by Mr. Elmar Brok MEP (Chairman of the Committee on Foreign Affairs of the European Parliament).

Mr. Brok in his speech made references in the EU-USA relations of the past few years and said that their relations are of utmost importance during those historic changes in our world. He also noted the similar values, culture and historic links of the two regions while reminding us that the USA is still by far the most important partner that Europe has.

"Yet" he continued, "the EU and the USA have not a free trade agreement!" He said that he hoped in the EU-US Summit in June, in Chicago USA, those two regions to establish one between them; because "we must exploit the full economic potential of our relationship with America."

Mr. Brok continued his speech by comparing the economic situation that engulfs both Europe and America recently and mentioning the importance of setting up rules to avoid similar situation of happening again.  He concluded his speech by stating that Europe's cooperation with USA is more important now than ever since WW2!

Mr. Brok's speech opened the fourth panel that took place right after and focused on the shared economic challenges that the EU and USA are facing together. Part of this panel were Mr. Brok himself,  Mr. Sean Kay (Professor of International Relations at Ohio Wesleyan University), Mr. James Elles MEP (Member of the Delegation for the relations with the US of the E.P.), Mr. Fredrik Erixon (Director and Co-Founder of the European Center for International Political Economy, Brussels), Mr Thomas Spiller (Vice President, Global Public Policy Europe, Middle East and Africa, The Walt Disney Company) and of course Mr John Bruton, former Taoiseach of Ireland and former Ambassador of the EU to the USA. The panel was moderated by Mr. Tomi Huhtanen, CES Director.

The conversation was initiated by Mr Elles that made a short account on the European-American relationship over the past few decades; from the '90s that was dominated by the economic and political agenda due to the changes in Europe (fall of the Berlin wall), the '00s that was dominated by security after the 09/11 attacks and now, that our common focus must be on growth, jobs and trade.

Mr Erixon answering a question by Mr. Huhtanen about the Doha round of negotiations, he admitted that it is "dead;" but not the WTO (World Trade Organization). He suggested that we got to recover various negotiations taking place there and through bilateral, multilateral and unilateral relations, "use the trans-Atlantic Axis to lead the world, with capacity to create growth both in USA and the EU."

Mr. Kay reminded us that there is no real change in the EU-USA relationship, apart from small "structural" ones, like the US Presidential election and the inauguration of President Obama. He also mentioned the inability of Europe to take action in incidents like the one in Libya; "so the USA feels overstretched." He suggested that Europe should be able to "operate" without the military help from the USA.

Mr. Kay noted that there is no advocate in Washington for the EU, for trade or other issues; while of course there are US advocates in Brussels, giving EU's policy officials their opinion on  future EU policies. He also admitted that there is a negative opinion in America about the euro-zone and its crisis, the recent President Obama social policies (that many have accused him that was inspired by Europe) and a lot that happen in the EU in general. "Europe is being used as a political punching bag in the USA," admitted Mr Kay.

Mr Spiller agreed with the idea that the EU-US relations stand in a historic moment right now and that their cooperation "is crucial for  companies and growth." So he encouraged for more EU-US cooperation, with focus on transparency, stability and the rule of law, for both these two blocks and the rest of the world.

The conversation moved into the US-EU competition with China and the new challenges they both face from the rise of the BRICS, they called for more European presence and a stronger voice in Washington and they mentioned Ireland's economic success and failure; Mr. Kay blamed Ireland's recent economic woes to two factors that do not get on well together: US taxation system, with European social state laws!

They debated and concluded in many things like: Europe and the USA must remove the remaining trade barriers, a move that China and other competitors fear. That if Europe proceeds with the structural changes, it will be strong again within two or three years and the need to sharpen many strategic relationships between the EU and the US, that will include agriculture. Here there was a mention of the CAP and how it was changed recently and the fear of Europeans of GMO crops.

The panel then praised Ireland for its diversity, its success in multiculturalism its education system and many more, with others agreeing that the creativity that exists in Ireland attracts a lot of American companies. They also concluded that Europe has done more than the US to reform and deal with the current crisis. The only way to deal with China according to this panel was to establish free trade between USA and the EU. Otherwise China, that has so many European and American customers and companies investing there, is not afraid any threats coming from the EU-US.

The panel concluded its discussions agreeing that if all the above are not implemented during the next 2-3 years, our economies will collapse. Then Mrs Creighton, Ireland's Minister of European affairs took to the stage and announced Ireland's Taoiseach, Mr Enda Kenny TD joining the forum, right after she told us that the Dail Eireann (Irish Parliament) has passed the ratification of the EU Fiscal Treaty.

Mr Kenny started his speech in reaffirming his belief and support for Ireland, the euro and the Fiscal Treaty. He called the Treaty as "important for the future of Ireland and the eurozone." He said that the current crisis shed a light on how we've been progressing all those years and it gives us an opportunity to find out what we did wrong and gain a better understanding of the crisis.

He stated that the eurozone is in the epicenter of the crisis, simply because there are more concerns about European integration and solidarity, that exposed its weaknesses. Therefore we need new economic tools of substance and credibility to deal with the crisis. He also noted that there is no support for the creation of USE (United States of Europe) just yet.

Mr. Kenny blamed also previous "incompetent" Governments and their mistakes for the current situation in Ireland and express his hopes that this will never happen again. "The eurozone is a key element for Ireland attractiveness for investment," he added and he urged for a "yes" vote on the referendum on the approaching EU Fiscal Treaty.

Mr. Kenny mentioned the damaging role of the banking sector on the Irish economy but he expressed his confidence that the country will "bring its public finances on a sustainable path."  He also added that the crisis "is not a problem of the peripheral EU economies only" and that 23 of the EU's states have been borrowing excessively; "Europe must face up to what it's really meant to be."

Mr Kenny concluded his speech by saying the Ireland and Europe must focus on the digital and Single Market development, but also continue our drive for research and innovation. In that way, "by 2016 we are going to demonstrate that Ireland is the best small country to invest in! We should give a message to Europe and the world with a yes vote, that Ireland is showing that Europe is the way."

With the conclusion of Mr Kenny's speech, the fifth and final panel of guest speakers took stage. It was moderated by Mrs Creighton herself and its speakers included Mr Kenny, Mr. Inigo Mendez De Vigo (State Secretary for the EU in Spain), Miguel Morais Leitao (State Secretary for Europe, Portugal) and Mr David Lidington (Minister for Europe, United Kingdom).

The panel's discussion was focusing on the question of a political union and if it is needed in Europe right now. Mr Lidington started the debate by stating that Europe has got to become more competitive by focusing on the Single Market; but we should not discuss about structures, rather about outcomes. We should focus on institutional reforms for prosperity rather pushing forward for institutional changes. "We must ensure that politics remain democratic in Europe," he said.

Mr. Leitao gave us an insight on how the Portuguese citizens feel about Europe and their country's EU membership. He explained that they have a great interest on how Europe will evolve, but "the lack of knowledge and transparency is worrying for the Portuguese." So Mr Leitao reminded us about the importance of EU becoming more transparent and democratic. Mr. De Vigo also added that when Europe started with the creation of the Maastricht Treaty, it focused mainly on the monetary side not the financial one. We need structural reforms, first back home in our own countries and then in a pan-European level.

"We need economic and political integration, to think, act and reflect together," concluded Mr De Vigo. Taoiseach Mr Kenny agreed with Mr De Vigo and added that we need adjustment of our public services, education and public spending. He said that "we got to pass to the people that we are all a member of a club of countries and we need to compromise and abide to certain decisions, but we must also continue to draft our own budgets."

Then Mr Lidington re-entered the discussion and focused a bit on why the UK failed to be part of the Fiscal Treaty and that a British referendum on EU membership that so many in his country desire, "will depend on the outcome of future referendums in other European states that will require further handing over of power to the EU." He reminded though the audience about his country's committed involvement in major events that transformed Europe, from WW2 right until the fall of the Berlin wall. He described China's rise as a huge opportunity, as 10% of its population for the first time are getting European spending power, resulting in a huge market. Mr Leitao focused of European affairs and described the Fiscal Treaty as a step forward for Europe, as it will boost the Market's trust in EU.

The panel continued their discussion and concluded that being European is an added value, complimentary to your nationality and that there is no EU without the eurozone; their fate is entwined. They reminded the audience about the importance and relevance of EU in our everyday lives; either we realize it or not it affects us daily, but sometimes we take for granted the benefits it offers us.

Then the debate turned its focus on how can we make a more democratic Europe and the integration process continue. The panelists brought the example of the falling percentage of the global GDP that will be attributed to Europe in the future, just 7% down from 28% that it is now! "Will Europe become a museum for the rest of the world to come and visit," the panel questioned, if the current changes and shift of the balance of power continues in the world. 

The conclusion of the panel was that we need a greater transparency in Europe, while the EU should focus on things that matter for its citizens: increasing prosperity and enhancing security. "A Europe of results," as Mr Lidington put it!

Well I hope they stick to this. The forum offered a lot of food for thought, with some negative and some positive signs of what is about to come. My personal overview of this forum will be a blog-post on its own, which I will publish later this week.

Economic Ideas Forum, Dublin Castle 2012. Day 1.

The Third Annual Economic Ideas Forum was organized by CES (Center for European Studies) and the Konrad Adenauer Stiftung; it is hosted by Irish Taoiseach Mr Enda Kenny and Irish Minister for European Affairs Mrs Lucinda Creighton TD. The forum is taking place in the Irish Government buildings in the Dublin Castle between Thursday, April the 19th and Friday the 20th of April.

It has various high ranked Irish and European officials and politicians from many European countries participating in its panels, notably from Ireland, Spain, Holland, Finland, Germany, Italy and Britain. Its main focus is to discuss, debate and analyze the issues that created the current eurozone crisis, reach to conclusions and offer solutions for the future. Also, to address the challenges that Europe is facing now and during the next few decades, and the best potential ways to deal with them.

The Forum begun with the welcome speech by Mrs Creighton, during which she pointed out that Europe has many times dealt with other financial crisis in the past, but always emerged stronger. She mentioned that Europe is like a family and like every family it has its problems and disputes, but "we must work together, collectively, putting our best forward."

Then the President of EPP (European People's Party) and CES, Mr. Wilfried Martens  addressed the audience and he encouraged the European leaders to take stock of the impact of their decisions and think of ways to deal with them. Mr. Martens also stressed that the European Community must show its solidarity, that is time to take responsibility and focus in fiscal discipline, job creation and that the origins of the crisis are the high levels of debt. He also mentioned that Europe's monetary union needs to be implemented with economic union and that the completion of the single market is essential to promote recovery. Mr Martens closed his speech by quoting Germany's Chancellor Mrs Angela Merkel's statement that "my vision is a European political union," and that he hoped that the Irish citizens will make a European choice in the up-coming EU Fiscal Treaty Referendum.

Mr Martens was followed by Mr Antonio Tajani, Vice-President of the European Commission. He stressed that Europe must put real economy in the center of its agenda and that "we need to be strong on political choices, we need a new industrial revolution." He added that Europe must invest in research, innovation and education and with a pan-European infrastructure we should be able to deal with similar crisis in the future. He compared Europe with China and America and how it lacks in investment when compared with its competitors, but also noted that those investments must be focused in enhancing technological leadership and devote more resources in research; a research that must be industry oriented. Mr Tajani also said that "trade should be free but also fair," and he closed his address by noting that Europe must have an economic governance with a stronger E.C.B. (European Central Bank).

Followed Mr Tajani's speech we had the first panel of discussion which was moderated by Mr Roland Freudenstein, (CES Deputy Director) and comprised by Mr Brian Hayes (Ireland's Minister of State in the Department of Finance), Mr Joachim Pfeiffer (CDU/CSU Speaker on Economic Policy of Germany), Mr Peter Nyberg (Commission of Investigation into the banking system of Ireland), Mr Colm McCarthy from the School of Economics in UCD (University College Dublin) and Mr Dan O'Brien economics editor in The Irish Times.

This panel focused in discussing the position of Europe in the world economy and how to win opportunities through stronger economic governance. Mr Pfeiffer addressed the issue from a German perspective and he added that consumption in his country was one of the pillars of growth. Mr Nyberg said that European authorities were not powerless in dealing with certain problems but some supervisors in the ECB did not see that anything bad was going to happen. Only a handful of people had an idea of what was coming "but they could do nothing about it."

Mr Nyberg suggested that to avoid future crisis, we need to educate a new generation of bankers, that will allow and prepare the banks in similar situations in the future to take the losses. Mr McCarthy agreed with the fact that Europe has just a currency but not a monetary union and that the eurozone design is "flawed." He suggested that the Maastricht Treaty must be revisited, that we need market discipline and better supervision as complimentary measures to a currency union.

Mr O'Brien stressed that "we do not know the magic formula for growth and what mix of policies with generate growth," bringing examples from the north and south Italy, as well the east and west Germany regions and the economic differences between them. The panel concluded that the Fiscal Treaty is not enough to deal with the crisis, that we need to revisit the ECB and its roles, we need a stronger EU Commission and above all that European politicians should not dismiss people and ignore them. The issue of a European Finance Minister was also discussed and if such move is a threat to European economic diversity.

A lunch break followed, before entering the room for the second panel of discussions that was opened by a key note speech by John Bruton, former Taoiseach of Ireland and Ambassador of the EU to the USA. Mr Bruton started his speech by reminding the audience about "the many discouraging moments" that Europe faced in the beginning of the Single Market. But as it took a period of time to create a relative functioning Single Market, "we should look back at our experiences from that and apply them in our problems with the single currency." He suggested that Europe needs also a single market for Banking and that we rely too much on the banks for credit, while there is no European bond market; the banks are far too big. "We need a Europe wide investor protection, but be careful not to drive business out of our continent," he said.

Mr Bruton also mentioned the case of certain groups of people that will lose out from the development of the Single Market and they know who they are, that is why they are quick to take action and stop any development; on the contrary people who will benefit from the Market, do not know or realize it until it is too late.

Then he joined the rest of the panel, the moderator Mr Peter Ehrlich (Financial Times Germany), Mr Raymond Gradus (Director of CDA Research Institute, the Netherlands), Mr Eric Loeb (Vice President, International External Affairs at AT&T), Mr Maurice Thompson (Vice Chairman CITI Europe, Middle East and Africa) and Anthony Foley (Senior Lecturer, Dublin City University Business School). This panel debated on the options of Europe to bounce back from the crisis and the role of the Single Market as a key to growth.

Mr Ehrlich started the discussion by stating that recovery can happen only if the Single Market is used in every EU state, but the problem is that member states do not really abide into what they agree. Mr Foley agreed but he added that this is a problem not only in Europe but international, bringing as example the Doha round negotiations. He also mentioned that another problem is protectionism, meaning that EU member states keep certain sectors out of the Market on purpose. Mr Gradus added to the debate the issue of taxation rules on European level, while Mr Bruton noted that if we create a single bond market, we will need a single deposit scheme across Europe.

Later Mr Foley argued that in 2012 we have yet a Europe wide solution and Mr Bruton noted that certain conflicts of interests are presented as conflicts between countries. Mr Ehrlich following that statement, questioned why things that are discussed during the EU Council meetings are not explained to the people. Mr Loeb said that Europe does not need any more policy statements by its leaders, "we have already so many on the self!" But Mr Bruton appeared more harsh with the ECB officials than Mr Nyberg earlier and suggested that people in the central bank did not read certain protocols,"they were given a task by EU policy officials, but they did not do their job!"

The panel also addressed issues like the inability of Governments to borrow in the current climate contrary to the multinational corporations. They discussed the taxation harmonization across Europe issue that is sensitive to Ireland; Mr Bruton and Foley stated that this will be bad for Ireland and that competition among states is good, while Mr Gradus that supported this suggestion clarified that he supports the harmonization of the basis of the taxes, not the tax rates. Other conclusions by the panel were that we need an integrated Europe to deal with the multinationals, European citizens must start voting as Europeans and make EU more democratic and that because of this crisis there has been far more European integration in the last two years than in the past fifteen!

After a short coffee break we returned to the debate and the third panel of discussions, moderated by Mr Christophe Leclercq (EurActiv founder and publisher) and its members; Mr Richard Bruton TD (Minister for Jobs, Enterprise and Innovation of Ireland), Mr Danny McCoy (Irish Business and Employers Confederation) Mr Ciaran O'Hagan ( Bond Strategist at Societe Generale) and Mr Kimmo Sasi ( Chairman of the Finance Committee in the Eduskunta, Finland).

The panel's discussion focus was on the dilemma of boosting competitiveness while enhancing social Europe. Mr McCoy noted the importance of the native multinational companies, but also the issue of Europe blocking accession to any potential; a situation that is visible by the scandal of high youth unemployment! Then Mr O'Hagan stressed the issue of rating agencies and how they rate countries; he suggested that new criteria for ratings must be introduced like social cohesion and demographics. Mr Sasi commented on the Finnish system of income and high value tax and how it resulted in good social services.

Then the debate moved into the labor flexibility issue and the permanence that leads to security of jobs and social security in general. Mr Bruton stressed that the diversity of the European economic models is actually Europe's strength. "With a few more billions of people entering the capitalist system from China, India and eastern Europe," he continued "innovation and labor flexibility is essential." He also pointed the need to encourage people in funding their own pensions, due to Europe's decreasing demographics. Mr McCoy supported that Europe's social model is unsustainable and "the younger generation will realize that we have to deal with it; labor flexibility is going to arrive!"

The panel also questioned the age of retirement limit while all speakers agreed that there can be no more luxurious social security, with only "effective but not excessive benefits" as Mr Sasi said. They discussed about the need to be daring in reforming social policies, as they holding back growth. The role of the unions was also taken into consideration while Mr Bruton stated that "European welfare state is doomed," but the reforms must be done gradually and in a humane way. The panel concluded that we need different types of social contract, we need to develop new models and to promote creativity and entrepreneurship within the education system.

The third panel closed the first day of the Economic Ideas Forum, with the much anticipated second day that includes a speech by the Taoiseach of Ireland Mr Enda Kenny, already being in the participants' minds.

What will China's rise mean for Europe?

For the past few decades we are witnessing a transformation on the global politics and a slow shift of power towards the East. With western economies declining and being in recession, opportunities arose for new economic powerhouses on the planet, one of them being China; the most populous country of the world, a land with an ancient history and culture and of course with a lot of potential.

One would think why so far China was not already a global superpower; well there are many reasons for that, mainly internal. But now the Chinese are embracing capitalism, they are playing the westerners' game, and they are good at that. So inevitably America and Europe are afraid of China challenging their hegemony.

China has larger population than Europe and America combined and a massive landmass with lots of resources. It is a serious contestant in foreign policy in Asia, but they also infiltrating Africa, a region that was traditionally under European control. Is this going to bring Europe and China in a headlock? Well potentially yes, but it does not have to be as dramatic as the media appear it to be. We are supposed to be allies with America but we are also their competitors. Does that stop us from closely cooperate with them?

Europeans have invested heavily in China all those years, and recently the Chinese are doing the same in Europe. They bought the Piraeus port in Greece, they are building car factories in Bulgaria and they are investing in Ireland too, as well as in many other EU countries.

I support foreign investments, but I am also wary of them. Our leaders tend to rely solely on them and they are becoming lazy. Yes it is great to attract foreign investments from other countries and multinational companies, but you must use the income of funds to invest and create a sustainable growth and economy; for when the time comes for those companies to relocate elsewhere, somewhere more profitable. Because that is what those companies do; they are searching for the best and most profitable destination and as competition out there is fierce, investments can flow for some years and then relocate in another country with cheaper workforce.

So what do you do? Once you better the living conditions of your population and their salaries go higher, those investors will possibly leave your country. But if you have used their money wisely all those years that they have been investing in your state, then you can establish home grown industries and technologies. And in some cases you maybe become investor in other poorer countries; the trouble is that some leader's are so corrupt that instead of doing this, they are absorbing those funds for personal use, or to perpetuate their rule in their countries.

The other side-effect I fear, is that once you allow others to invest in your country then inevitably you are allowing them to influence your internal and external affairs and policies. In order for someone to invest huge amount of money in you, you got in return to play by their rules in some key areas that interests them. So if the Chinese are investing in many EU countries, and with no real unity in most policy areas among them (as we have seen many times) can the Chinese "play one against each other" later on? In other words, can China, as America was doing all those years, influence European politics indirectly?

Of course they can, and they will. We have been doing it in Europe and other regions of the world for our benefit. The key issue though here is, that if Europe is truly united, there is little we have to fear from this development and we can use it for our benefit. Besides, China has a great interest in Europe, and we have asked their assistance to deal with the eurozone crisis recently: so we are already close partners in a way. We need them as much as they need us and they know it.

I personally welcome China’s rise, but of course we in Europe need to stand united when dealing with them. They are after all (still) the most populous country in the world, and individual European countries of around 10 or 20 million each-never mind the smaller ones, have a clear disadvantage. With a Europe of half a billion though, things are different. Besides, isn't that the main reason of European integration; to counterpart the rising challenges from the continuous changes that are taking place, with the emergence of new markets and economic powerhouses on the planet.

We are seeing countries like China, Brazil, Russia, India and South Africa, the so called BRICS entering the economic landscape of our world. I welcome the rise of these new economies, to break the monopoly of the West notably America. Europe has been their lap dog since WW2, and we barely have foreign policies of our own, if America says otherwise. Their influence over Europe is economic, cultural, political and social. They have influenced our lives and public opinion through their movies, products, press, TV channels and programs, but also dragged us in many wars for their benefit only. The wars in Iraq and Afghanistan are mainly based on America's foreign policy and interests with almost all of Europe involved, with exchange of money, investments from America and other "favors" which I dread to imagine what they are!

Europe is in a way obliged to support America in almost everything and in the case of China, America fears their potential challenge on military supremacy. Their interests in the Pacific that they had monopoly since WW2 are important to them, as well as supporting their vessel states of Japan, South Korea and Taiwan. Especially over the last one, there is a real concern for a future conflict. So Europe weakens China's military development, or at least is postponing in with its arms embargo. I personally do not see why Europe must get at odds with other countries or regions to safeguard America's favoritism and influence. Why do we have to get in odds with China, in order to favor America? We have been doing the same with Russia and our relations are on a roller-coaster. It could have been different if we had a more independent foreign policy.

Allegedly America is "protecting" us from the threat of Russia, China, Iran and the Islamic one. But if Europe was allowed to develop its own military defense that would not be necessary. Besides there are many in America that do not want to "protect" Europe at "their expense" and as for Russia I do not think they are a real threat anymore, as long as we do not get in their nostrils and side always with America.  Like China they have a great interest in us as we are their primary oil and gas consumer. Why destroy us? We could still be allies with USA but that should not mean being their lap dog.

I wish to see a multi-polar world and break the monopoly of the Americans and the three main European powers (Germany-France-Britain).  Then the world will be more equal and fair in my opinion. But only if Europe unites in some sort. If not, then we are going to be just a play-field and chess-mat for the big players of the future, like China, Russia, America. We are going to be a profitable market for them so they can trade, sell their goods and become richer. But we will have no real influence in the world or towards those superpowers! How can you safeguard your interests like that?

If we have more countries, or block of countries competing with America and Europe, not in an ideological field like we used to have with the USSR and communism, but rather in innovation, development, finances, military and politics, we will have more voices in this world. America and the rich European elite countries won't have the monopoly in this world and its resources, thus we will have more democracy and equality in our planet. If Brazil in South America, China and India in Asia, South Africa in Africa, together with other economic blocks like ASEAN, MERCOSUR, AU and so on get more say, then the established western powers can not behave irresponsibly, arrogantly or like bullies as they have been doing for some time now. They will have strong opposition and this can be for our benefit too. Because small European countries also suffer from the monopolies of America, Britain, France and Germany.

The emergence of China, might be good for the smaller European states; because if the big powers of Europe wish to compete with them, they might be forced to form an ever closer union between us, and speak with one voice to the world. In other words, include all the smaller states in the effort to start being more competitive, taking initiatives and having a voice in the world scene. That could mean that Europe can become like America, a kind of federation that living standards can be of the same level everywhere with the same opportunities for prosperity all over the continent.

Or it could be for the worse, if the European elites wish to replace the cheap production of the Chinese workforce by creating a two tier Europe; the rich north and the poor south, with lower wages and weaker economies. The poorer states will do what the Chinese were doing until now, work to produce cheap goods for the rich states. There are many that fear this, especially in the hardest hit by the current crisis states in EU like Greece and Spain and other southern European countries. Is that what the current economic crisis will lead to? Not necessarily, not if the smaller states start taking a united stand against the three European powers and take initiatives within EU.

There are those who claim that salaries will be cut all over Europe, so that Europe can start producing again and attract investors with lower salaries for its citizens, to compete with China. What started in Greece they say, will spread all over Europe; Greece is just the "guinea pig" and the beginning. All European countries will follow sooner or later. Nevertheless it is obvious that these are certainly indications that life for a worker in Europe will be very different in the future because of the competition rising from China. Perhaps it was about time for us to get a kick up the back-side and stop relying on bubble economies and the markets and re-industrialize our countries.

There is of course the threat and possibility of war between all of the current and emerging powers. But haven't we been in a constant war anyway? Especially America and its European allies. Over a decade in Iraq and Afghanistan, and a brewing conflict with Iran just to safeguard America's interests. Perhaps if there were more military powers to threaten America, they would not go to war as easily in the first place.

To conclude, the rise of China certainly brings many challenges for Europe in the future, but one thing is certain: we can not keep blocking other regions from prospering and developing. We can not afford the effort and we can not keep dragging the development of the human kind all on our own; we need to bring others on board. Besides, it is only ethical to do so. There will be certain challenges that will come with this, but we can definitely  get over them if we accept the fact that we have to face the future in some form of union or federation. Europe must start speaking with one voice in the world. Keep holding on to old imperial and nationalist complexes, is not the way forward; learn to still be a national of an ethnic group while belonging in a international political entity I believe is the way forward. We do not want to lose our identity, nobody wishes so. But democracy can exist in a European or international level if only you allow it, believe it, support it and work for it.

Will the Irish pay the new household charge?

As the deadline for registering and paying the new household charge approaches on the 31^st of March, the majority of the citizens still have yet to pay. There are many scenarios on what the failure to pay will result in. But is the introduction of the charge timed right and why is there so much controversy over it when such charges exist all over Europe?

The “Household Charge” of €100 has been introduced in order to fund local services like emergency services, maintenance and cleaning of streets, public parks, street lighting, libraries, etc. It is an interim measure and will be replaced in future by a valuation-based property tax that already exists in other EU countries.

Ireland is one of the last countries in Europe that does not fund local services through local property-based charges. The EU/IMF Programme of Financial Support for Ireland commits the Government to the introduction of a property tax for 2012.  

The Household Charge is an annual charge introduced by the Local Government (Household Charge) Act 2011 which is payable by owners of residential property. It is a matter for owners of residential properties to register and pay the Household Charge on or after the 1st of January 2012.

A property tax, requiring a comprehensive property valuation system, would take time to introduce and accordingly, to meet the requirements in the EU/IMF Programme, the Government has decided to introduce a Household Charge in 2012.

The new charge is separate from and in addition to the Non-Principal Private Residence (NPPR) charge. If you own a residential property in Ireland, you are obliged to declare your liability for the Household Charge and pay it by the due date, unless you are not liable.

If your house is rented you are liable for the charge and not your tenant. Virtually all private residential properties, including apartments and bedsits, are liable for the charge. There are a few exemptions that are not though; properties owned by an approved charity, government departments or by local authorities and under their schemes and mobile homes, are some of them.

A late payment fee of 10 per cent will be added if the charge is paid within six months of March 31st. This will increase to 20 per cent after six months and to 30 per cent after a year. Late payment interest of 1 per cent per month from the due date will also apply until the charge has been paid.

Since this new measure has been announced by the government, many political and social groups have been promoting their campaign opposing it, on social media, the internet and public demonstrations.

The Irish government and all of the main political parties support the new charge, apart from Sinn Fein. The party’s leader Gerry Adams TD has called on the Taoiseach to axe the Household Charge following the publication of figures which show that less than 7% of households have paid until the end of February.
The Louth TD also called on the government to put in place a plan B to ensure that local councils are adequately funded.

With only days to go before the March 31st deadline the government’s plan to generate €160 million for local councils appears to be in real danger of collapse, according to the Sinn Fein TD.
He called the government to accept that the Household Charge is an unfair tax which should never have been introduced. It is a flat tax that hits the poorest hardest and people on low and middle incomes are bearing the brunt of austerity.

 Mr Adams believes that, the Household Charge should be axed and the government should introduce a cap on wages in the public sector at €100,000, as proposed by Sinn Féin. This would raise €265 million “more than envisaged by the Household Charge.”

Another Sinn Fein politician, Senator Katherine Reilly, also believes that the government got it wrong. “The tax scheme should be progressive, regulated to the ability to pay” she notes. This charge is in line with the EU/IMF austerity programme, as an interim measure to property tax, she explains.

The charge is completely unjust, according to the Senator. “People have massive mortgages repayments and the charge is not looking to the ability of a house owner to pay; it is completely unfair,” she says. “People are in the breadline, the households are squeezed with high levels of unemployment, while more and more charges are being introduced,” she continues.

But there are speculations that if house holders fail or decline to register and pay for the new charge, the government will eventually collect it directly from the existing utility bills of the household.  At the moment there is an enquiry on the legality of such measure with the Data Protection Commission.

“If such thing happens, Sinn Fein will organize some sort of protest about it-like marching and campaigning against it outside the government buildings,” Senator Reilly said. “The government must take a serious look to that, it is not going to work; people are financially squeezed.”

Gerry O’Donnell from Virginia Co. Cavan suggested that the public should know how these funds raised by the new charge will be used by the government; “I think that our government should publish a list to out-line exactly what we will get in return for this payment; do we get a service? Will they replace and ensure that the roads to our homes are maintained for example,” he pointed out.

Many groups that are campaigning against the new charge are warning that once this charge is introduced, the amount will keep rising and it will also lead to water charges. In most other European countries, water and household tax is a reality for many decades now.

In France the municipal taxes are on average about € 1,800 per household, while in Norway around € 1,448 per annum. In Germany the average water bill is around € 750 per annum. Of course there are many differences between the Irish public services and those of our European counterparts. In many cases the services in other European countries are of higher level.

But how does the household charge is implemented in other EU countries and how does it affect their people? Thanos Kalamidas, an artist and free lance journalist in Helsinki, explains how the Finnish system works:  “there is property tax in Finland and it is painful,” he says. “In Finland the idea is that the land belongs to the state and you just have the right to use it, however surreal this might sound in a capitalist world.”

Thanos explains that if you buy and sell property in Finland, your capital gains will be taxed at 28%. There is a separate real estate tax, levied by the municipality as well. Non-resident investors are not exempted from paying this. The property tax rate is based on the value of the real estate, but it generally ranges from 0.3% to 1% of this value. The rate is different for permanent residents, who pay only 0.15% to 0.50%.

Marianne Ranke-Cormier, a Parisian and editor of the on-line Newropeans Magazine, explains how the tax works in France; “in France this charge is called ‘Taxe foncière’ (Land value tax) and also ‘Taxe d'habitation’ (local residence tax) existing since the French revolution, which corresponds to the spirit of equality,” she explains. The rich landowners must also pay and it applies to all real property, built or non-built. However, the tax is levied by municipalities, so the richer the city then the tax is lower.

This is the case for Paris where the taxes are lower than in the suburbs, “which is unequal, as properties in Paris are more expensive, so the rich Parisian owners pay less taxes when compared with the owners of the suburbs,” she says. “It is time for owners of property of Greece and Ireland to contribute to the community for the services they exploit. The land belongs to nobody, it is a common good and I find it normal to pay back to the society for the right to ‘own’ a large or small part of it,” Marianne adds.

 Ildiko Gonda, and artist from Budapest explains how this charge affects them, in one of the newest EU states. “In Hungary the tax differs, depending if it is a holiday home, family house or apartment, business premises, building site, etc. It also depends on whether the owner occupies the property, or it is a second real-estate property,” she says.

It varies in the different districts of Budapest and there are wavers, depending on the number of dependants living in the property. There is a penalty tax for sites, because the local government wants to force the owners to fill the gaps and build in the empty site.

In Hungary people live in their majority in their own property like in Ireland. For this reason there are social elements built into the taxation system. “But people are finding tricks to avoid taxation,” Ildiko comments. “From this year, there is such tax everywhere in Budapest, but it works similarly as in France.”

Last year the charge has been also implemented in Greece, as a condition of the EU/IMF bail-out agreement for the debt ridden country. But unlike the Irish, the Greeks were not “asked” to register for it in order to pay; the government there made sure that the charge will be collected as soon as possible.

The house hold tax is being collected through the property’s electricity bill and DEH (Public Corporation of Electricity). DEH is obliged to charge the home owners the new tax in four yearly instalments. The charge is not just € 100, but as in Finland or Hungary it is calculated according the size, value, age, use and location of the property and there are many different levies or wavers for single people, couples with kids, one parent families, etc.

If the home owners fail or decline to pay the tax, then DEH has the right to suspend the electricity provision to the property until the owner settles the bill. The owner has not the right to switch to another electricity provider until he/she has settled the fees. In the case that the owner does not apply for the electricity service reconnection and does not pay the charge, then DEH will inform the relative state authorities to proceed with further persecution of the owner.

Of course the reaction from the Greek public was strong and in many cases violent. According to many, these measures are being implemented the wrong time, when the people are losing their jobs and their salaries are being cut. Others view this as totally unfair, as they feel that they have to pay this tax to save the banks and the mistakes of the corrupt political elite. Water charges already existed in Greece, but the new house hold charge was something that many saw as another way for the government and the EU to rip them off their hard earned money.

Zoe Karasoultani, a journalist from Thessaloniki, Greece commented; “no Greek has agreed to this charge. Nevertheless it has been implemented, but some are still refusing to pay; others like my family have paid it, but with heavy heart. The ones who refused to do so now simply owe the amount to the revenue.” It seems that they will be dealing with them from now on.

If the EU and our governments are trying to harmonize the property taxes in all EU states, or provide the state with more resources to fund public services, it seems that they are doing so during the worse time possible. By using the current crisis in order to push for the desired reforms, they are only turning the public opinion against the new charge.

Introducing this charge maybe a step to the right direction as Marianne has put it, but in a climate of unemployment, austerity and a serious economic crisis, it is a recipe for protests; cutting jobs and salaries while raising taxes and even worse introducing new ones, is never going to go down easily with the public.

Britain to blame again for the new EU fiscal treaty referendum?

British opposition to the EU’s original fiscal treaty proposal is partly responsible for forcing a referendum on the issue in the Republic, former Taoiseach John Bruton argued yesterday.

The Republic has to hold a constitutional referendum to ratify the fiscal treaty, which imposes budgetary rules on EU members limiting the amount of money they can borrow and the deficits they can run.

Addressing the Ireland Canada Business Association yesterday, John Bruton, a former Taoiseach and EU ambassador to the US, said the British government’s refusal to agree to amend existing European treaties to accommodate the new fiscal rules had “forced everybody else” to go outside existing agreements.

“The fact that a member state would do such a thing, to my mind, suggests something not far from malice,” he added.

Mr Bruton argued that if Britain had agreed to amend the existing EU treaties to accommodate the fiscal pact, it is possible the Republic could have avoided the need for a referendum. He suggested it would have been possible for the Government to rely on the fact the electorate have already ratified those existing treaties in previous referendums.

Mr Bruton is president of IFSC Ireland, a private organization that promotes the Republic, and particularly Dublin, as a location for international financial services. His brother, Richard, is Minister for Enterprise, Jobs and Innovation in the Coalition.

Mr Bruton was giving the Ireland Canada Business Association’s inaugural lecture, which was hosted by accountancy firm Price-Waterhouse-Coopers at its offices in Dublin. In his speech, he argued the welfare state, designed during a period of sustained growth in the 1950s and 1960s and promising generous pensions to workers, was the root cause of the EU’s sovereign debt crisis.

He said the markets recognized in many EU states the ratio of workers to pensioners was falling, making it harder to sustain retirement benefits. As a result, the markets were targeting the EU.


By: Barry O'Halloran
The Irish Times, 09/03/2012.

The above article just sickens me. We all know what the Brits are doing in the E.U., they want to protect their interests that lie with the Markets and the financial sector. But at least please call a spade a spade and stop the nonsense! They hate the euro and they want it gone. They advocate for the debt ridden nations to leave the euro-zone as soon as possible.

They tried to block the new EU fiscal treaty, because they will lose out in manipulating the European currencies and economy. And now that they managed to force Ireland to have a referendum on it with their objections and withdrawal, they will meddle again in the referendum and try to shoot down the treaty.

If the Irish vote NO they will be doing Britain's job and making them a favor, for the worsening of the crisis for all of the nations that are in dire need for a solution right now, including Ireland! But only Ireland's reputation will be damaged by this, not Britain's.

I understand that the British Government has invested a lot over the decades to maintain the financial sector and it is one of Britain's main economic sectors, since they got rid off a lot of their industries. But if Greece, Ireland, Portugal and Italy are called to face tough austerity and make the necessary reforms, with very painful consequences for their people, why Britain isn't?

Perhaps they should go back to what they had before and not rely on easy money from the Markets. It will be for Europe's, the British people's and the World's benefit to control the financial sector. 

The U.K. is acting selfishly again, to protect the very institutions that brought us to this mess: the banks and the markets. Next time please stop lecturing us about how Europe is robbing Britain out of its resources, and consider that you (the ordinary British citizens) might also not escape the will of the Markets, after they have consumed everything in the other European countries.

We need to control the markets and the banks, not support them, side with them and give them more power over our citizens. But the City of London has different views!