The bear and the euro
James Forsyth 7:21pm
Wen Jibao’s comments to the
BBC about the euro crisis dramatise the shift in economic power from west to east. Jibao remarked that:
But China’s role in the euro crisis is far less problematic than Russia’s. As Stratfor has highlighted, if Russia — or one of its effectively state controlled companies — were to buy a considerable stake in Greece’s gas company DEPA when it is privatised (as it will be as part of the bailout package) it could render irrelevant the European Commission’s attempts to bring into being a gas pipeline into the European Union from the stands and the Middle East that does not pass through Russia. Considering that Russia has already shown itself ready to use its control of gas supplies as strategic leverage, this is a concerning development.“Trust is more important than currency and gold and now, during the debt crisis, we again bring trust to Europe. I have total trust in Europe's economic development”.
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JohnOfEnfield
June 26th, 2011 7:59pm Report this commentNo worries. Shale gas from Poland (& Blackpool) will take up the slack!
RobertD
June 26th, 2011 8:47pm Report this commentWhen a guest proclaims their integrity its time to count the spoons. At least the Russians don't try to hide their selfish intent.
TrevorsDen
June 26th, 2011 8:51pm Report this commentHmm... shale gas test drilling (note the 'test') suspended due to earthquake in Blackpool!
http://www.bbc.co.uk/news/uk-england-lancashire-13599161
But roll on shale oil and gas, lets keep our fingers crossed.
Hugo Chav
June 26th, 2011 8:54pm Report this commentMoney News
May 2010
Greece’s financial meltdown represents the last gasp of the welfare state, says financial author Robert Samuelson.
The basic issue is governments’ promise of generous retirement and health packages without devising a viable way to pay for them.
“Virtually every advanced nation, including the United States, faces the same prospect,” Samuelson says.
“Aging populations have been promised huge health and retirement benefits, which countries haven't fully covered with taxes," he wrote in The Washington Post. "The reckoning has arrived in Greece, but it awaits most wealthy societies.”
In the United States, we’ve tried to hide our true state by using the word “entitlements” instead of "welfare state," Samuelson points out.
But “Vocabulary doesn't alter the reality,” he explains.
“Countries cannot overspend and over-borrow forever. By delaying hard decisions about spending and taxes, governments maneuver themselves into a cul-de-sac.”
daniel maris
June 26th, 2011 9:04pm Report this commentUnderlines the need for the following to happen:
1. Give up on the world free trade project - a complete nonsense when we are competing with states that have no free trade unions and the death penalty for free social activity.
2. We must develop alternatives to current energy supplies - solar, wind, wave, geothermal, hydro. Germany is showing the way forward on this. It is perfectly practical.
3. The democracies need to unite and stop udnercutting each other politically. Sadly, it seems there is no chance of this happening except in the most extreme crises.
Baron
June 26th, 2011 9:39pm Report this commentbeggars cannot be choosers, we have the welfare state, no money, the Chinese have no welfare state, plenty of money, what’s your problem?
am told the European banks that have lent the Zorbas the money, partly as a substitute for the lack of tax receipts, are ready to accept an extension of the maturity of the paper, lower the coupon (all conditional on votes in the Greece’s parliament and stuff), in return, the ECB will allow this new facility to count towards the capital the banks must hold in reserve. Voila, the crisis is dead, let’s wait for the new, and bigger, most likely terminal crisis down the road when the extended maturity paper will have to be refinanced.
I find it astonishing, banks that lent to a nation that’s bankrupt, will remain bankrupt unless a mechanism can be found allowing Greek assets to be priced at prices attractive enough for new money to flow in, regenerating the economy, boosting exports, substituting imports, those banks will actually be ‘rewarded’ as will be Greece for her profligacy. Mad world indeed.
Baron
June 26th, 2011 9:59pm Report this commentdaniel marris, sir, they did release you too early, another ten years or so inside may do the trick though.
Dimoto
June 27th, 2011 12:25am Report this commentWen Jiabao.
Wen is his family name, Jia is the generation name and Bao is the given name.
So, Premier Wen please.
Just saying.
Perry
June 27th, 2011 7:59am Report this commentYou mean someone dares to jeopardize the might of the EUSSR and its pipeline plans?
Shurely there musht be shome mishtake
Perry
June 27th, 2011 8:08am Report this commentOh, and stand by for new EUSSR-wide tax proposals this week.
They need more money.
El Sid
June 28th, 2011 11:10am Report this comment@daniel maris
We must develop alternatives to current energy supplies - solar, wind, wave, geothermal, hydro. Germany is showing the way forward on this. It is perfectly practical.
The technology for large-scale wave power isn't practical yet, although it's getting there. The real issue is not so much practicality as cost - see the recent report Arup did for DECC :
http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/renew_obs/renew_obs.aspx
Typical solar PV, geothermal, tidal and wave all come in at over £200/MWh, offshore wind is £174/MWh. Compare that with a wholesale price of about £50/MWh. OK, "good" projects can come in considerably below that (some wind turbines are turning a profit at £28/MWh) and Arup do forecast that prices for some technologies will drop considerably over the next 30 years whilst fossil-fuelled electricity is likely to become a lot more expensive. Obviously energy security will cost us - but are you really prepared for electricity bills to quadruple?
As an aside, those numbers make for interesting reading in the context of Scottish independence, given that well-known engineer Salmond's plans to base the Scottish economy on selling renewable energy. It sounds great in theory, but the economic reality is rather messier.
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