Tag Archives: Romania

Our Daily Warning

As the government of Romania falls as another victim of the economic crisis, the global political risk factor continue to rise and the odds of even more social unrest gains a few more percentage points. EconoTwist’s and many bloggers , analysts and researchers,  have been warning about this for years. But perhaps it’s time for another warning?

 “With people already questioning a model of society prone to generate inequalities, civil unrest in one country would rapidly spark political turmoil and social dissatisfaction across Europe. Foreign investors would fly away from Euro-denominated assets, scared by a spiral of riots, selective defaults, and low GDP that would eventually lead the Euro to collapse.”

Edoardo Campanella

Romanian Prime Minister Emil Boc on Monday announced his resignation after three weeks of anti-government protests in the country, following in the footsteps of Giorgio Papandreou and Silvio Berlusconi.

He said he took this decision in order to calm “social tensions” and so the “economic stability of the country” is not affected.

Well, the resigning of the PM’s in Greece and Italy doesn’t seem to have helped much in that matter.

See: World Erupts in Anger: “You Can’t Eat Money!” (Photo Coverage)

It seems more like political leaders fleeing from their responsibility.

And if someone don’t claim that responsibility soon, and start doing something about it, we may very well find ourselves in a helluva lot more trouble than we’re already in.

ReadEurope: “Time to Get Angry”

In case there is still anyone who not quite grasp the depth of this crisis, here’s the adviser for the Italian senate, Edoardo Campanella, to explain:

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The Social Consequences of the Euro Crisis

About a year ago the Arab spring taught the world an important, predictable lesson. When young people cease to be the engine of the economy and are excluded from the decision-making process, long-run economic growth is endangered and political stability undermined.

This lesson holds true for dictatorial regimes as well as for long-established democracies.

In Europe, a deteriorating youth marginalization is creating the preconditions for a social earthquake capable of shaking the old continent and impairing the survival of the Euro.

Until now, safety nets and intra-family transfers have prevented peaceful Indignados-style protests from turning into violent Arab-ones.

However, the shortfall of resources due to a new imminent recession, along with fiscal austerity measures, will impair this channel, whereas frustration and social resentment will keep growing

The figures are already alarming.

According to a report recently released by the European Commission, one in five young people is at risk of falling into poverty or social exclusion, only one third of young people are employed, and one in three has been out of work for over one year.

Moreover, 40 per cent of the unemployed are under 30, to the amount of 9 million people. On the other extreme of the age scale, the trend is reversed.

The employment rate for people aged 60-64 increased from 23% in 2000 to 34% in 2010.

In peripheral countries the situation is extremely acute.

The Portuguese government urged its young unemployed to leave Europe for better opportunities elsewhere, in Italy almost 120.000 young talents left the country last year, and in Spain thousands of people are pouring into former colonies in South America.

Across Europe, and even in Germany or Sweden, young workers are experiencing in-work poverty due to what economists call labor market dualism.

Unlike their older colleagues, they just have access to temporary contracts, which pays on average 14%  less than permanent contracts and are more vulnerable to sudden layoffs.

The medium-term economic and social consequences of such youth marginalization are huge.

  • First, an economy that is not nourished by fresh ideas loses competitiveness, becomes vulnerable to interest groups, suffocates material as well as intellectual progress, and is fated to stagnation or even prolonged recessions.
  • Second, high income volatility and job insecurity discourage the creation of new family units that are essential to generate social cohesion as well as inter-generational solidarity.
  • Finally, economic uncertainty tends to lower fertility rates with negative spillovers on the size of tomorrow’s workforce, population ageing, and the sustainability of public finances. The political implications could even be more disastrous.

Therefore, what begs asking is whether these economic factors could contribute to the eruption of an Arab spring in Europe.

There are, of course, huge economic and political differences between North Africa and Europe. The latter, unlike the former, is graying, prosperous, and democratic. But, paradoxically, the combination of these diverging demographic trends and opposite institutional features, along with the same aspiration for a better future, could lead to an identical result.

In North Africa young people represented the demographic majority of a despotic regimes, in Europe the political minority of a democratic system.

The former fought for an economic progress they just started to savor but that was hampered by the elite in power. The latter would fight for a material wellbeing that is only benefiting their older fellow citizens at their expenses.

Either way, young people can improve their situation and gain power only through violent rather than legal channels.

What event, if any, will inflame the upheaval in Europe, which country will be the epicenter of this social earthquake, and what impact it could have on the institutional, democratic order remain uncertain.

However, it is still possible to predict part of the effects.

With people already questioning a model of society prone to generate inequalities, civil unrest in one country would rapidly spark political turmoil and social dissatisfaction across Europe. Foreign investors would fly away from Euro-denominated assets, scared by a spiral of riots, selective defaults, and low GDP that would eventually lead the Euro to collapse.

Edoardo Campanella

To avoid this catastrophe, European governments should start promoting the role of the youth in their societies through family friendly policies, career paths related to productivity rather than to seniority, cross-country mobility, and the eradication of dual labor markets.

Spring is approaching. European leaders should act soon.

Edoardo Campanella is economic adviser to the Italian Senate.

This article is syndicated by www.eurointelligence.com.

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EU Minster Compare France With Nazi Germany; Receive Standing Ovations

The French government are under heavy pressure because of its decision to expel over 1000 Romans from the country. But now the French have had it; EU justice commissioner Viviane Reding indirectly compared the French actions with Nazi Germany‘s deportation of Jews during World War II, saying that “this is a situation I had thought Europe would not have to witness again after the Second World War.”

“This is not how you speak to a major power like France, which is the mother of human rights.”

Bernard Valero

Over 440 Roma camps have been dismantled in the past month and more than 1,000 Romanian and Bulgarian citizens sent back to their home countries as part of the massive crackdown on illegal immigration, ordered by President Nicolas Sarkozy at the end of July. The expulsion of gypsies from France have been met with with storm of protest from both EU politicians and human rights organizations.

“A plane ticket to one’s country of origin in the European Union is not a death train, and is not the gas chamber.”

This remark by EU justice commissioner Viviane Reding in a radio interview, yesterday, have really got the French out of their chairs and up on the barricades.

Viviane Reding

Viviane Reding

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Ms. Reding said she was “appalled” at the French policy. She called the developments a “disgrace” and said the commission will take legal action against Paris at the EU court in Luxembourg.

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All the political groups in the European Parliament have welcomed Viviane Reding’s intervention, except for the center-right European People’s Party, to which, awkwardly, both President Sarkozy and Ms. Reding are affiliated.

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The Mother Of Human Rights

Focusing in on the commissioner’s remark, Tuesday, the French politicians today says that Ms Reding’s “unseemly” remarks in effect compare France to the Nazi regime.

Bernard Valero

According to the EUobserver, spokesman for the French foreign ministry Bernard Valero says that Paris is “astonished” by Ms Reding’s statement.

“We don’t think that this kind of declaration will help improve the predicament of the Roma, who are at the heart of our concerns,” Valero says.

“This is not how you speak to a major power like France, which is the mother of human rights.”

Head of Mr. Sarkozy’s UMP party in the National Assembly, Jean-Francois Cope, also dismiss Ms Reding’s comments as “baseless accusations” and suggested the EU commission had “ulterior motives.”

Voluntary Deportations

French authorities deported over 200 Roma to Romania the same day that Ms. Reding spoke out on the commission podium. Some 230 explees, including children, landed in Bucharest on Tuesday in what France is calling “voluntary deportations” in defiance of human rights groups.

Over 440 Roma camps have been dismantled in the past month and more than 1.000 Romanian and Bulgarian citizens sent back to their home countries as part of the massive crackdown on “illegal immigration” ordered by President Nicolas Sarkozy at the end of July.

Most of the Roma interviewed by journalists upon arrival in Romania said they would return to France, because the economic situation is better, even if they get deported again.

Romanian local authorities are speed-tracking procedures for social assistance, but the fresh aid is unlikely to keep them in the country.

Xenophobic, Discriminatory And Nationalistic

Spokeswoman for the President of the European Parliament, Jerzy Buzek, says to the EUobserver that “the commission is the guardian of the EU treaties. If it finds that France broke the law, it should proceed accordingly.”

The head of the Liberal group, Guy Verhofstadt, says in a statement: “Europe is finally proving its worth by not ignoring xenophobic, discriminatory, and nationalist policies perpetrated by member states. We welcome commissioner Reding’s action to bring fast-track infringement proceedings against France.”

Socialist leader Martin Schulz also welcomed the Reding speech, but says the reaction came “too late for hundreds of Roman people,” already deported by the French government.

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Human Rights Groups Flabbergasted

Human rights groups have rallied behind the commission.

Amnesty International, which has behind the scenes been trying to push the commission to take action, was flabbergasted by the force of the response.

“This has never happened before. I mean, there were 10,000 Roma deported by various member states last year and the commission didn’t say anything,” Nele Meyer, the group’s Roman expert says.

“We are absolutely surprised and delighted that Reding took such a strong line.”

“Ms. Reding’s forceful statement comes not a moment too soon,” Benjamin Ward from Human Rights Watch says in a statement. “The French government needs to heed the calls from Brussels and halt this abusive policy.”

The European Network Against Racism urged the commission to take legal action not only against France “but also against all other member states putting in place similar policies infringing minority rights.”

The French parliament also on Tuesday pressed ahead with another controversial policy – the total ban of burqas and other full-body robes worn by Muslim women in public, even by visitors who pass through France.

Offenders face a maximum fine of €150 and could be asked to attend courses on what the government calls “republican values.”

Individuals who encourage others to ignore the ban would face tougher penalties: up to one year in prison and a maximum fine of €30,000.

On Econotwist’s account:

Thank you, Ms. Reding! This kind of courage is rarely seen in any political environment today, and is exactly what the world needs at the moment. Wishing you the best of luck.

Related by the Econotwist:

Le Monde File Lawsuit Against President Sarkozy For Spying

Sarkozy Takes Austerity To New Hights

EU’s Administrative Costs Set To Rise 4,4% In 2011

People’s Confidence In The EU Drops To Record Low

The Political Impact Of The Great Recession

A European Revolution by December?

EU Member States Disagree On Debt Figures

EU Officials Fears Second Depression And War

Is World War III Approaching?

A Report To Make You Go “Hmmm…”

The Failure Of A Culture

A Lament for Europe

Global Economy On Fast Track To Disaster

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People's Confidence In The EU Drops To Record Low

People’s confidence in the European Union drops to record lows in most countries amid placid response to the rising unemployment and the troubles of the euro zone, a Euro-barometer published on Thursday shows. Only 49% Europe’s citizens think that their country has benefited from EU membership.

“It’s a clear sign that citizens were expecting Europe to come up with answers to problems which have a European dimension.”

Amadeu Altafaj Tardio


The EU’s image worsened dramatically in Greece, Cyprus, Portugal, Spain, Romania, Italy and Luxembourg – where confidence in EU institutions fell by 10 to 18 percent compared to the previous year. Only Hungarians and Danes had a slightly better impression of the Brussels apparatus, while Belgians remained unchanged in the level of their opinion.

The survey was carried out in May, at the peak of the sovereign debt crisis affecting Greece and the whole euro zone and amid hikes in unemployment all across the continent, the EUobserver reports.

Unemployment remains the biggest concern of EU citizens (48 percent), along with the economic situation in general (40 percent).

Spin Doctors At Work

The EU commission’s spokespeople presented on Thursday the results in a favorable light, stressing that the confidence levels in EU institutions are still higher than that of national governments and parliaments.

EU spokesman Oliver Bailly

“I’m not sure we can make a link between the negative perception of citizens about the benefit of accession and criticism of EU institutions. The disappointment about accession could be linked to EU institutions, but also the way national governments have participated in the EU debate, influenced decisions, or the lack of information about the EU,” commission spokesman Olivier Bailly said during a press briefing.

When asked what they associate the EU with – most of them responded free travel and the euro. Peace was the third most popular answer, closely followed by “waste of money” (23 percent).

Austrians were the most upset about Brussels’ way of spending funds – 52 percent – followed by Germans (45 percent) and Swedes (36 percent).

Only 19 percent of respondents felt that the EU stands for democracy, a drop of seven points compared to 2009. Just ten percent of the Finns, Brits and Latvians ticked the “democracy” box.

A more idealistic view on the democratic standards upheld by the EU can be observed in Romania (33 percent), Bulgaria (32 percent) and Cyprus (30 percent).

“It’s a clear sign that citizens were expecting Europe to come up with answers to problems which have a European dimension – and they still do,” Amadeu Altafaj Tardio, spokesman for economy and monetary affairs said.

Indeed, 75 percent of the respondents all across the EU said that stronger co-ordination of economic and financial policies among member states would be effective in fighting the economic crisis.

A majority of Europeans, 72 percent, said they would back a stronger supervision by the EU of the activities of the most important international financial groups, an increase of four percentage points in 2009.

The Missing Question

But knowledge about what the term “European economic governance” actually means – a term which is still matter of dispute among member states, notably the UK and France – or which national reforms are best equipped to steer the country out of the crisis were not part of the questionnaire, according to the EUobserver.com.

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For the first time since this Euro-barometer has been carried out, the survey also included Iceland, now a candidate country for EU accession.

The results show that public support for EU membership is low: only 19 percent of respondents in Iceland believe it would be a good thing and 29 percent believe their country would benefit from EU membership.

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Related by the Econotwist:

Morgan Stanley: Governments WILL Default

The Political Impact Of The Great Recession

Goldman Sachs On Europe: Nothing To Worry About!

Brussels Tells Athens To Shut Up And Take The Pain

EU’s Administrative Costs Set To Rise 4,4% In 2011

Sarkozy Takes Austerity To New Hights

EU Member States Disagree On Debt Figures

EU-US Top Leaders Agree To Meet In Lisboa On November 19th

Greece About To Enter The Death Spiral

Housing Bubbles In Australia, Canada, Norway, Sweden Worse Than In USA

A European Revolution by December?

Germany’s Manic Depression

A Report To Make You Go “Hmmm…”

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