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!

Putin is re-elected, Europe debates how to deal with it!

And yes, he did it again; (everlasting) Russian President Mr Vladimir Putin is elected once more to be the country's President for yet another term! And while we in the rest of Europe do not quite understand Russian politics, somehow the Russians (or the majority of them at least) seem quite content with what is going on in their country. And I do mention the majority of them, because lately we have seen strong opposition and many protests in the streets of Moscow and other large Russian cities, calling for Putin to leave the Russian political scene for good.

Europe of course and "the West" in general are trying to figure a way of dealing with the Russians, Putin and their kind of "democracy." No, having the same President re-elected the Putin way is not democratic at all, that is one thing for sure. But why do we have to understand them or even make them change in order to do business with them? Why do we have to make everyone that is trading with us or is near to us behave the way we do, or spread our version of "democracy" to every country in the World?

As if Democracy in Europe and America are perfect! I won't even go to the American version of "democracy", a "gift" from America that is being forced to some unfortunate nations with invasions and bombings! Either you are going to have "democracy"  or else we are going to force it upon you. Excuse me, isn't democracy by its definition deriving straight from the will and actions of the people, the citizens and not by foreign powers? In my opinion "democracy" for the Americans means one thing: Capitalism! Unless you are free to consume and spend money on buying things that you do not need, then you are not democratic enough for their liking! And they are going to convert you to it.

And what about Europe? Recently the German Minister of Finance Mr. Wolfgang Schauble, virtually threatened the Greeks to vote again for either the PASOK or the New Democracy Party in the upcoming election in the country, in order to secure the second bail-out loan. To remind you, those two parties run Greece since the '70s and they are responsible for the current economic mess in Greece but also in the eurozone! The same people that we want to get rid off so badly, our European partners now are threaten us that we have to keep them or else! But then how will Greece change? Why insist on keeping in power those people who are guilty of bringing their country to its knees? Is it because they are the ones who signed the sell out of the country to our "partners" in Europe and America and if we get rid off them, the deals they signed will perhaps be cancelled by any new political establishment?

Of course this makes me wonder how democratic are Greece and Europe itself, when they allow such things to take place! It also makes me wonder if the corrupt political elite who was supported by Europe for decades, was only placed in the lead of the country to do just that; drive the country bankrupt and bringing it to the mercy of the bankers, the marketers and the capitalists. And I won't even go to the democratic deficit within EU, or examine the case of other countries, like Italy for example; they had someone very similar to Putin, he is called Berlusconi and he dominated the country's media, public opinion and politics for years, yet Europe tolerated him until things reached a dead end! No one was asking the question he ask about the Russian case: how to deal with Italy?

Russia is a major trade partner for Europe for its oil and natural gas, among other things. We should not try to change their politics; it could be dangerous! Russia is not Iran. And even with Iran what have we achieved so far? We banned their oil into Europe, it is the weak European economies like Greece that suffer because they can not import oil from there! The Iranians simply sell it on to the Chinese; there are other markets you know apart from Europe. We can not afford to do the same with Russia, can we. Russia had never had the type of democracy we have in the rest of Europe and perhaps they will never do; or even if they will eventually it will take much more time and it must come from within the country, from the Russians themselves.

Why try to force it or why shall we make everybody conform with our way of doing politics in order to do business with them? Besides who tells us that our way is the best? There are a lot of skeletons in Europe's closet and if we get involved in other people's politics, be sure that they will get involved in ours in return; why go back to the Cold War days?

Personally I am more concerned about what is unfair and undemocratic in Europe/EU right now. We can not change or interfere in Russian internal affairs, not without consequences. Putin must go but we can only watch, or perhaps assist the groups that call for our help; but they have to reach out to us first. We should try to sort our problems in Europe before we criticize Russia, because right now we are not in much better place. Democracy in Europe is fading and we have unelected "technocrats" put in our governments, while bankers, the markets and the capitalists rule our countries.  And we dare criticize Russia for its elections? Sort your own back garden Europe, before you dare to criticize others!!