About financialguy

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Author Bio: Hi everyone, I have a background in finance and an interest in economics and politics, if you can see the distinction. I don't pretend to be an analyst of the calibre found elsewhere on this site, but hopefully I can add a little something here and there to the debates online.

Articles by financialguy

When Confidence Is Lost

Posted by financialguy on 22/03/13

So the eurozone crisis is back with full force. Did it ever really go away?

I don’t propose to try and recap the events of the last few days in Cyprus with the bail-in of bank depositors, things are moving quickly enough that I would be out of date almost immediately. Instead, let’s focus briefly on the precedents that seem to have been made.

It seems that recent weeks have brought the eurozone crisis two new sets of headaches. The first is from the Italian elections and the 25% share of vote won by Beppe Grillo and his 5 Star Movement. Whatever else it may be, it is a clear message from the Italian electorate that they demand change. Grillo’s message is very clear and it is not at all supportive of either the EU or the euro.

Having already had a technical government under Mario Monti, Italian’s have had the chance to decide whether they like the idea of austerity and reform. The answer appears to be a clear “no”. It is difficult to blame them, but it means that from here on the Troika, or any part thereof, is going to find it very difficult to impose financial rules in Italy.

From Lorenzo Bini-Smaghi in his FT blog about the election result in Italy: “Austerity is the result of countries’ democratic decisions to wait until the last minute before acting, under the pressure of the markets, mainly by raising taxes rather than implementing long-waited reforms. Denying this, by claiming that austerity has been imposed on countries – rather than self-inflicted – and looking for scapegoats, is the biggest threat to democracies going forward.”

It seems that the Italian people would like to wait some more.

What for the rest? It seems hard to imagine that this makes it easier for the Troika to impose it’s will elsewhere now, a point that has been underlined by the Cypriot parliament voting against the bail-in of small bank depositors. If little Cyprus can stand up to the big boys, what about Italy or Spain?

Whether a Banking Union could have prevented this is open to discussion (I presume not), but since it has been gently sidelined as an idea (here) it won’t be helping. Once again it is clear that the banking sector and it’s inability to operate safely is the cause of much of the problem. As I have mentioned before (here) Europe can’t bring in much stronger banking regulations soon enough if it is to survive.

This leads on to the second problem. The banking sector is very weak in many EU countries currently. The current issues in Spain and Italy come leaping to mind, but there must be problems in many other countries too. With a precedent set that a national bailout might require your personal savings to be used, I wonder how many people in eurozone countries other than Cyprus are currently withdrawing their life savings?

Over the last two years or so capital flight has been a problem, one that caused many economists to worry about the “Target 2″ system (I don’t understand it well enough to try and explain it) and whether that might bring down the banks. If people with savings were worried about them then, I presume that they must be more worried about them now. It would seem logical.

If this starts a wave of cash withdrawals from eurozone banks it could well expose weaknesses in other unexpected places.

Having closed the Cypriot banking system for several days, it is hard to imagine that confidence will immediately be restored if and when they open their doors. Rather, the general public in Cyprus will likely queue for hours to try and empty their accounts to salvage what they can. In banking, confidence is everything and when it is gone, it is gone.

Will Cyprus still be in the eurozone by Monday?

Economy & Euro, Uncategorized
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We Are Sleeping On A Volcano

Posted by financialguy on 18/03/13

“I believe that right now we are sleeping on a volcano … can you not sense, by a sort of instinctive intuition, that the earth is trembling again in Europe? Can you not feel … the wind of revolution in the air?”
Alexis de Tocqueville (1805 – 1859)

EU Treaty & Institutions, Political Philosophy
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Is There A Bull Market Underway?

Posted by financialguy on 11/03/13

It is a long time since I last made a financial prediction in print, but I feel a need to make one now. The previous ones can be found here and here.

Regular readers might recall that I have been confused about the state of the economic world for a while and how and why some of the major stock markets continue to rise while the news is a perpetual procession of doom and gloom (here).

Over the last week I have had something of a realisation and recognition of (what I believe to be) reality. My prediction: some of the world’s major stock markets (such as the Dow Jones and FTSE) are going to keep rising strongly for some time to come.

There are three reasons that I underpin my thoughts:

1. The weaker players are gone. The recession has been long enough that lots of poorly managed, under-capitalised, overly-indebted or marginal companies have closed their doors already. The stronger firms therefore have less competition. Perhaps not much less, but less.

2. Wage inflation will remain low. It is no secret that stock markets rise when corporate profits increase. However, it is less well known (though I have no idea why) that corporate profits tend to rise when wage inflation is low. Wages make up such a large portion of the running costs of most businesses that should they not rise for a while this translates itself onto the bottom line. Considering the unemployment situation in most of the developed world, it seems hard to imagine that people are negotiating hard for pay rises currently. This looks set to stay for the forseeable future.

3. Lots of cheap money. For some time I have believed that QE is only temporary and as and when it ends there will be “trouble”. As time passes, it has dawned on me that rather than this being a short period of cheap money, it is becoming the new normal. While interest rates are low, borrowing remains cheap (or at least cheaper than perhaps it should be). It is not easy to guess how long cheap money and low interest rates will last, but I am starting to think that it is both economically and politically impossible for many countries to end QE any time soon. This might still be here in 5 years time.

The traditional view is that when an economy struggles and is in recession, stock markets will fall. Despite worsening news from the US, UK, France, Italy, Spain, and on and on, the FTSE and Dow Jones have powered on. This, I believe, is a sign of what we all know but rarely think about. Most major companies are now so international – or global – that the trading conditions in the nation in which they are listed is not necessarily a guide to how the underlying business might perform. Companies list for business advantage these days and not for historical or sentimental reasons. Big innkeeper, not big brother.

For reference, according to the app on my iPhone, the Dow Jones stood at 14,412.77 and the FTSE100 at 6,492.63 15 minutes ago (on Monday 11th March 2013). We’ll see whether I am right or wrong.

It is a little ironic that while the EU is gearing up for what seems to be multiple layers of banker bashing (starting here) stock markets look set to deliver the kinds of returns that will provide big wins for many fund managers.

(Please understand that I disclaim any and all responsibilities to actions you might take. This post is for entertainment only and should you choose to invest or speculate, you do so at your own risk).

Economy & Euro, Financial Services
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An End To The Political Protection Of The Banking System?

Posted by financialguy on 06/03/13

The election result in Italy, when combined with the obvious horrors of mass unemployment in a number of countries, real financial hardship for many and a growing number of corruption scandals (listed here) might just be the beginning of the end.

With Beppe Grillo’s party taking the largest slice of the vote it is hard to believe that further austerity will be possible to apply in Italy. The ECB, Angela Merkel, the Commission – or even the Troika – can say what they like but they will not be able to enforce it. This will likely lead to other countries trying to renegotiate the terms of their own austerity.

What started as a banking crisis and became a sovereign debt crisis is now a social crisis caused by high unemployment. In Italy that has lead to a political crisis (the latest in a long line of governments to fall).

I’m starting to think that time is almost up for the banks. It was clear in 2008 and 2009 that reform was needed. Like an ostrich, many put their head in the sand to try and ignore the signs. There have been many situations where banks have been forced into changes, but too many seem to be in denial and hoping for a return to the good old days. Those days are over.

While it is clear why they would want to see thoughtful and careful legislation in place rather than some knee-jerk reaction, time has passed and many have not moved anywhere near quickly enough, either to reform their corporate governance or to improve their balance sheets. The problems in Spain and the fear of a banking union in Germany would seem to back up this assertion.

My guess is that the banks have around 12 to 18 months left under the old system. The new system will be built around very strict rules governing bank behaviour, entire populations that wish to see them reformed, very large numbers of unemployed voters that hold them responsible and want revenge which will be delivered by more and more politicians like Beppe Grillo that will turn the establishment on it’s head.

Their political protection will soon be gone in many countries and it will be replaced by politicians representing voters that actively wish to see debt default, banks fail and bankers in prison. The clock is ticking.

Economy & Euro, Financial Services
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Is Disaster The New Normal?

Posted by financialguy on 17/02/13

Where has the volatility gone in financial markets? Why is the current political situation not causing mayhem?

Over the last few weeks I have been developing a theory about the current state of financial markets. The theory isn’t fully fleshed out, despite my efforts, but I hope that by explaining my thinking here I can stimulate thoughts in others and hopefully some comments.

The background to my thinking is rooted in the common wisdom of markets and economics. For example, when there is a lot of bad news around markets fall. When there is lots of uncertainty volatility increases. When money creation rises so does inflation.

Just a quick mention of a few things ought to be enough to have spooked financial markets but it seems to have failed. In the eurozone there is huge problem after huge problem in Spain, wide ranging economic problems in Italy, Greece, Portugal, Ireland and on and on. There has been the postponement of the fiscal cliff in the United States. Are we entering a new era of currency wars? Is this a race to the bottom? Who might “win”?

Any of these things ought to have been enough to spook markets and force significant turbulence, but no, not this time. For several months I have been wondering the same question day after day, “How bad does the news have to be?”

I ought to out myself. In financial terms I am a perma-bear, always expecting the worst. This latest round of equity gains has had me staggered – are markets, economics and politics really that unrelated???

I have begun to wonder whether markets have simply come to the conclusion that the near collapse of the European currency and economies is the “new normal” and nothing to worry about. Have they decided that the ability of politicians to postpone the inevitable indefinitely is unlimited and therefore there is nothing to worry about?

Perhaps they are right? We will lurch from problem to problem with none being quite insurmountable enough to bring the house of cards to ground.

If we cast our minds back to 2007/8 it was unthinkable that the financial system could emerge unscathed from the sub-prime crisis. It did not, but the world continued to turn. Then it became unthinkable that Greece could stay in the euro. It has. As sovereign balance sheets expanded to mind bending levels it was unthinkable that we could escape higher inflation. We have. Each potential catastrophe that has been faced and somehow passed at the eleventh hour (or later) has not compounded onto one another.

It has crossed my mind several times that the exceptionally high rates of unemployment are the reason. Typically when wage inflation is low, corporate profits rise and so do equity markets. With young people out of work on such an enormous scale it is difficult to imagine that there is much negotiation over rates of pay.

Surely this cannot be enough though. Can it?

At some point sovereign balance sheets are just going to fall over. Well, one would have presumed that might have happened already, but it has not.

Perhaps we have simply entered a new era of economics and politics of crisis management.

If this is the case, then most troubling of all, equity markets look cheap and we should all be rushing to buy assets at almost any price. Normal thinking would suggest that the “dumb money” rushes in at the top, which would seem to be now while the “smart money” continues to sell. I discussed this here a few months ago, and I am just as confused now about the levels of risk to potential return as I was then.

Normal theory falls down again because there is traditionally a link between equity markets and property markets (residential property, for example, is pro-cyclical). In the countries that are really struggling (Spain for example), it is clear that both the stock market and property market are in deep doo-doo. The banks have been less than willing to fully write down their property holdings, mortgages and non-performing loans. In other words, there is much more to come.

In the UK for example, the London property market seems to be about level in the last year but much of the rest of the country has seen gentle falls for several years – but the FTSE keeps powering onwards and upwards – all while the national economy seems to be struggling on.

Have some stock markets therefore become decoupled from property markets? Or their national economies? From reality?

As I said, I am struggling to link all of this together, so if you have any thoughts or insights to add – whether I am right or wrong – please do so.

Economy & Euro, financial nightmare
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Too Many Envelopes Of Happiness

Posted by financialguy on 11/02/13

Corruption amongst public officials is never nice, but it seems that suddenly it is everywhere. Amongst the recent news I have seen references alleging:

- Slovenian politicians not declaring their incomes
- Greek politicians overlooking tax evading family members on the “Lagarde list”
- Spanish politicians apparently receiving extra cash each year
- the suspension of the Vatican Bank’s credit card processing system
- Who knows what will emerge from the Banca Monte Paschi di Siena and what are apparently 40 million euros of ‘payments’ on top of the derivatives trades that are bringing the bank into such trouble
- Allegations against former Commissioner Dalli relating to up to 60 million euros of requested bribe money

At this stage, who knows who did what and when and what the outcomes of the above might be. What I do know is that there seems to be more emerging each week. This might just be the tip of quite a large iceberg.

Public Affairs
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A Politician Is Not A Country

Posted by financialguy on 18/12/12

Today I plan to ask a simple and somewhat rhetorical question. It relates to the recent movements in the eurozone crisis and their relationship to German politics.

If you have been following the eurozone crisis, you might have noticed that the pressure on Greece seems to have eased. A few months ago it seemed to be a near certainty that they would not receive their next tranche of money and, well, who knows where that might have lead to … a Grexit perhaps?

Yet in recent weeks the talk of a Grexit has dropped. This might be because the politicians that kept mentioning it have managed to frighten the Greeks enough to get their way and now don’t need to brandish that stick for a while. However, it might be for other reasons.

One of the very plausible reasons is that there will be elections in Germany next year. Postponing major decisions until after the elections is seen as preferable. Of course it is. In his recent Project Syndicate column, Nouriel Roubini describes the situation very well (here). The question is, since there will be anywhere between tens and hundreds of billions of euros at stake, how much is postponing any major decisions really worth? If we think back to the first Greek bailout, it is now a near universally accepted truth that the delay in German decision making cost billions of euros.

A political agreement is not an agreement
One of these decisions is the banking union. There is near complete agreement that breaking the bond between banking debts and the balance sheet of sovereigns will be a very big help. It may not end the crisis, but it ought to be a big step in that direction. Since a ‘political agreement’ was made at the European summit, the definition has slowly changed and as people think about it more, the idea has been watered down until there might be little or nothing left. (I wrote about this recently (here) and it appears to me that there has been little or no forward motion since then).

The dirty secret appears to be that there are some big problems in many German banks. It has been easy for some politicians to criticise bankers in other countries, such as Spain, but if they have to look too closely at home, there might be some nasty surprises. If this is news to you, read this.

Movement beats meditation
I offer you three reasons as to why Europe cannot wait for Angela.

The first reason is that postponing economic decisions until after political elections makes little sense in an EU context. Several significant decisions were either postponed or not taken in 2012 because of the potential ramifications at the ballot box. A great example was the potential fall out of the elections in Catalonia a few months ago. The problem is that in a 27 member state union, there will always be elections just around the corner somewhere. Rather than try and hide from that fact, it is a fact of life and should be considered.

Secondly, the major failing of the euro is that it is a political construct. I am a firm believer that it was a political masterstroke at the time, but as we have seen, it has proved to be an economic albatross. Depending upon your perspective, this may be proof that making economic decisions for political reasons is not guaranteed to be successful. The euro was at least a shared political decision. If progress in resolving the euro crisis is to be on hold for some months, should it be on hold just to help Angela Merkel’s political career?

I cannot speak for the German electorate, but it seems like a lot of money to spend to preserve just one career, or at best one party, especially when there are so many unemployed people across the EU.

Thirdly, I think we ought to consider value for money. After her experience in recent years, Angela Merkel may well be the most experienced person in the world at dealing with the eurozone crisis, however, if the impact of keeping her in position is in the tens of billions range (or more), I think it might be possible to use a little of that money and buy in some extra talent – just like a football team would. If there is going to be so much at stake (and given the situation in Spain and Italy, it is many multiples of this) then we need to be thinking about a dream team and not just the Merkel and Schauble show.

How much would it cost to bring in Martin Wolf, Nouriel Roubini, Paul Krugman, Wolfgang Munchau, Kenneth Rogoff and a few others to be the brains behind the operation? (Yes, I am talking about having economists try to solve an economic problem rather than politicians). It doesn’t really matter how much they charge, it won’t be billions, so the impact they can have ought to still be value for money, even if they charge multiple millions of euros.

Therefore, I come to my simple rhetorical question…

Can the citizens of Europe afford (financially or otherwise) the potential impact of postponing progress in the eurozone crisis until after the German elections?

Economy & Euro, financial nightmare
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Matching Ideas To Money

Posted by financialguy on 26/11/12

Readers of this blog will know that I post my thoughts about innovation policy from time to time. One of the key areas – at least in my mind – of the innovation policy area is that of funding. Typically an entrepreneur with an idea does not also have the required money to back the project.

Over the past few weeks your author has been reading about this a lot. I have an idea and do not have the savings to fund it. Looking into this arena from a practical perspective is much harder than from a theoretical policy perspective. Questions such as what should happen and why rapidly become when, how and who.

The phrase ‘venture capital’ seems to be used as a catch-all for many. They seem to be discussing financing in general when of course, venture capital is typically a late stage funding option for existing ventures that have some sort of IPO or exit in mind in a few years time. For the much smaller project (such as my own), venture capital would not be of use. My idea of a worthwhile investment would be a long way short of their idea – it wouldn’t be worth their time to even meet me…

For the smaller scale projects, business angels (from family and friends to wealthy investors) are more likely to be the answer. But that isn’t always an answer either. I for one, have very high-hopes for my idea, but it might not work. If it doesn’t work, I have no intention to pull my family and friends down with me!

This is a complex and confusing area of finance and policy for sure. That policymakers are yet to figure it all out and make improvements is no surprise. Having moderated a VC policy event a couple of years ago, it was clear that the VC titans and business angels in the room did not have the answers either. And so, this is one of the issues that the EU really needs to find workable solutions and answers to if it is to find the high-growth companies that can help reverse the economic malaise and unemployment we face.

It isn’t all about the Benjamins
One problem that I think is very difficult to overcome is that of the role of capital. Money is important, I get it, but not that important. It is, I believe, the ultimate commodity. It all looks the same, it is printed by central banks in ludicrous quantities and often is just a number on a screen with no physical form. You can get it from any ATM machine and essentially it is everywhere. And yet, we recognise it’s power to the extent that we suplicate to it at every turn. Venture capital (even I am using the term as a catch-all now!) is important but I think that we are too deferential.

In contrast, the good business ideas aren’t all that common. I know that I have lots of good ideas, but only a very small number that are big enough to really pursue. Without being unkind, most people don’t have either the idea or the cojones to pull a start-up off. I might not. There ought to be a lot of money out there for a good idea…!

As a policy and legislative community, there needs to come a time when alternatives are established to the VC industry because we need them. Ultimately, crowd funding is such an idea and it is happening without any help from government. People see good ideas and want to fund them. On a smaller scale, there are micro-finance websites that enable the public to participate in projects in the same way as Grameen Bank does. Some innovative people with an idea and an online solution are changing the world. These platforms will not be the ‘VC killer’ that has happened to many other sectors (such as stockbroking and publishing) but it will come. It is only a matter of time.

Is VC in Europe working?
At the moment, the relationship between policy and industry does not seem to be very clear to me. I know there are many working on this, but I think that the dynamic needs to change. While on the one hand the VC industry tells government that “we know what we are doing” and to “get out of the way”, we all know where that approach to financial services has lead us. More importantly, the system does not seem to be working in the way the European economy needs.

That said, I am not convinced that government is the right format for business financing either – the rules and regulations imposed on start-ups to access the finance are often ridiculous. Personally, I know enough to know how I’d get financing from government and also enough to know that I don’t want it.

This is an almighty mess and it needs our best minds to try and improve it. Clearly I do not have the answers, but we need to find them.

Economy & Euro, Financial Services, Innovation and Growth
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A Lurch Backwards In The Eurozone Crisis

Posted by financialguy on 10/11/12

Over the last few days, it seems to me as though the eurozone crisis has become much worse. Please don’t misunderstand me, there hasn’t been another bailout an it was hushed up … the Netherlands didn’t request help, no. Instead, there has been something of an unstitching behind the scenes.

If I think back to about this time last year, there were very few ideas as to how to the crisis could be solved. Over time, the Fiscal Compact and the Financial Transaction Tax were thrown about. There seemed to be full agreement that they could help prevent the next crisis, but will probably not do much for this one.

Then earlier this year there was a proposal for a banking union. It was just being sketched out around April and May of this year. It has since been agreed at a summit. After the summit, there are typically lots of politicians and policy folk that offer their thoughts about what the agreement actually means and how it might work in practice. As this debate grew, it became clear to everyone that breaking the link between failing banking systems and sovereign debt was vital. Without this nothing can happen.

Alas, over the last two weeks it seems as though any hope of this link existing has been scotched by Chancellor Merkel and others. In other words, the banking union is now unlikely to be agreed to if it does what it needs to do. Another EU fudge.

This is really problematic. I personally have always felt that much of the banking union was theoretical at best (the idea of a single supervisor being able to clean up the banking system by the start of 2013, as was first proposed, was the most ridiculous element for me, though the idea of anyone being willing to backstop the current system ran a very close second). But, it did offer a theory as to how one of the major problems in the crisis can be fixed. Now it doesn’t.

Where does this leave the euro? It’s best minds have been working on this for months. This was the solution. Now, if it cannot be implemented as required, it seems to me as though the eurozone is back to where it was perhaps one year ago.

First, there needs to be an idea, a concept. Then it can be expanded upon. Then it can be agreed upon in principle, with a timetable. In EU terms, this all takes time and we aren’t anywhere near implementation yet.

Now, minus a banking union that can do the job, we are once again without an idea about how to end the crisis. Just let that sink in for a moment. Take a second. Despite the fact that the Greek crisis first started to really show itself in late 2009 – three full years ago – we are back in a situation where, it seems, there is still no idea as to how to fix the crisis.

Things are a lot worse than they might seem.

Economy & Euro
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The Greek Tragedy Is Extended

Posted by financialguy on 24/10/12

I can remember being asked by a friend back in June what was going to happen with the euro for the rest of this year. That is the kind of question that I normally try and fend off, but I was feeling a little vulnerable that day and so I just blurted out an answer.

“Towards the end of the year, around November time, Greece will need more money. To get it, they will have had to have made even more budget cuts that will be virtually impossible to make. If they haven’t made them, they will run out of money. And Germany has just announced that they won’t get any more time. Bankruptcy and a euro exit seem virtually assured.”

Well, it seems that yesterday, an extension to Greek reforms was granted and they now have until 2016 – not 2014 – to make the cutbacks required of them. The can has been kicked further down the road.

Once again, this is very last minute. Once again, catastrophe has been either averted or postponed. Once again, a firm position has been fudged. Once again, the previous official statements now amount to nothing. Once again, I am proved wrong.

Trying to figure out what might or might not happen is virtually impossible. How can markets, banks, businesses and the general public make any sort of long-term financial decision when there is such uncertainty?

It seems that the expected budget gap for 2013 that could not be filled amounts to something north of 15bn euros. And that the expected receipts from privatisations by 2015 will be around 8bn and not the 19bn originally hoped for (really, who’d pay top dollar for state assets in Greece now, knowing what we know?). Will two years be enough?

credit crunch, Economy & Euro, financial nightmare
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Some Soap Operas Are More Important Than Others

Posted by financialguy on 08/09/12

My local chip shop is owned by a Londoner called Andy. A couple of days ago I found myself being talked to by him about the Premiership. I don’t follow football all that closely, but he and I support the same team so there is a very real but limited amount of kinship between us.

Our team had won but the star player had fallen and hurt his leg. I was frankly amazed that he could try and search for such insight and meaning in the future by discussing the hamstring of another man. But pontificate he did.

After hearing the same news for the third time but fearing he could go on, I stopped him and said, “In other news, the President of the ECB seems to have a plan to centralise large parts of European countries powers and roll them up into the centre. This could profoundly impact democracy for hundreds of millions of people”.

He looked at me stunned for about three seconds and then asked simply, “There will still be football, right?”

To me, the English Premiership is like a television soap opera. It seems to roll onwards forever with new facts and games every few days. There is so much to think about and analyse and for what?

Another soap opera, but much harder to understand is the eurozone crisis. Following it, as I try my best to do, takes real effort and thought. We lay people (not central bankers) mull over the implications of the Target 2 payment system in a similar way as a football fan thinks about a metatarsal injury.

I know a number of people that are very interested in the future of the world and whether Europe is going to implode. They often ask me for insight just like the partially sighted leading the blind. At least they care and are interested.

In a way, the eurozone crisis is a soap opera as well. The ‘narrative’ changes often, from ailing country to ailing country, plunging each one into trouble and offering a few days of breathing space to others. So much of politics and financial markets are based on rumour and opinion that the future of hundreds of millions of people is being decided – in part – on unknowable speculation. We are in real trouble.

When I think about the likes of Andy I despair. I realise that most people are not interested in politics and economics, which is fair enough, but this is the system that enables everything else we do in life. Without it there will be trouble. Right now there is trouble and people seem to be ignoring it all the more.

Should more power be concentrated in the centre in Brussels it will be a very painful experience to the Andy’s of the world. It won’t be easy for them to understand how, why and when the power over national budgets was handed to Brussels and why their local services are being closed down because an unelected and unidentified nabob enforced ‘conditionality’ as part of their debt repayments.

Words like conditionality ought to send a shiver down the collective spine of the population because of the power they enable. At the last EU summit Messers Monti and Rajoy worked hard to obtain some leeway from Germany in the hope that financial oversight could be avoided. With the nature of power in the EU in such flux currently, almost everything is up for grabs. The politicians can see it, but the public seems to be unaware.

While waiting for my chips a few weeks ago Andy asked what I do for a living. I mentioned that I often write about politics and economics. His next words were priceless, “I think politicians are just a bunch of idiots and crooks”. While the standard distribution curve would suggest that there will be a percentage of larcenous fools in any group, including the political class, it is hard to believe that they all are. This kind of opinion is very common as we all know, but at a time like this when so much about our way of life is under threat, when our national futures are being argued over by the leaders of other countries, I am left wondering, “Where does that leave YOU?”.

Economy & Euro, Future EU
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Should You Follow The Smart Money?

Posted by financialguy on 20/08/12

Despite having some time on my hands to think, I am still baffled by the current state of the markets.

Firstly, despite all the potential risks facing the global economy (Greece, Spain, Italy, the US financial cliff and a slowdown in China) stock markets seem to be surprisingly buoyant. Dare I say rosy…? Who knows why. There isn’t a lot to smile about anywhere. It seems as though the laws of gravity have been temporarily suspended.

In the bond markets things are even stranger. This story from the BBC explains some of the issues currently facing Greece. To quote, “Last week, Greece was able to raise 4.06bn euros with an issue of three-month treasury bills, but the government had to offer an interest rate of 4.43% to attract investors.”

Considering the everyone on earth must now be aware that Greece is broke, most people are baffled as to why they are still in the euro and holders of Greek debt took an almighty haircut earlier in the year, it seems amazing that there is anyone anywhere willing to purchase their bonds – even if only for a three month term.

Should such people be willing to purchase those bonds, I would suggest that an interest rate of 4.43% is incredibly cheap considering the risks. While politicos and economists view it as a high rate of interest and close to unsustainable in the long term, the rest of us would expect to earn 40% or more, given the risks attached.

It would seem reasonable to presume that all the money sloshing around (via QE and the ECB money pumped into the banking system) needs a home. Still, I find it hard to believe that there would be any private investors willing to risk their own capital on something so risky.

Typically, we think of the big brains running investment funds, insurance companies and banks as being the “smart money”. It doesn’t feel like that now, does it?

Economy & Euro, financial nightmare
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Summer 2012 Is Poorly Timed

Posted by financialguy on 17/07/12

There have been a couple of legal challenges made to the European Stability Mechanism. The challenge in Ireland seems to have been brushed aside but there is still, of course, an appeal to be heard. Even so, the progress of the ESM seems to be pretty smooth.

Yesterday, however, the German Constitutional Court decided to postpone their ruling on the ESM and fiscal treaty until 12th September. In terms of the eurozone crisis, nearly two months is forever.

Quite honestly, this shouldn’t be much of a surprise. Some of Germany’s heaviest hitters have publicly offered their suggestions as to what the judges should do. Judges are notorious for guarding their independence and postponing their verdict draws a very public line in the sand that they will not be rushed and that this runs their way and their way only.

The problem is that the pace at which problems seem to develop and then envelop a country are not aligned with this timetable. The court pointed out that there is enough money within the EFSF to help Spain further should it be required. After last week’s announcement of much further austerity by the Spanish government, that will be of little comfort to the Spanish people.

However, the shadow looming over the euro is not currently Spain. It is Italy.

With problems building and intensifying in all sorts of places, this is not the time to be factoring in a few weeks for a summer holiday. Central bankers, civil servants, economists, politicians and even a few judges will need to be working hard through the summer. Otherwise, things may have taken a turn for the very worse when they return.

Economy & Euro, financial nightmare
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Can Banks Be Trusted Without Strong Regulations?

Posted by financialguy on 29/06/12

If ever there was a demonstration that “light-touch” regulation of financial firms has not been a great success, this week has been it.

Over the years, we have heard huge amounts from the banking sector about how they are competent to regulate themselves. The fact that many governments have agreed and let them get on with it demonstrates the influence banks have. To then need bailouts, government and taxpayer assistance and get it when things go wrong shows true power at work.

Two stories this week from the UK show just how far some banks and their staff have gone from the straight and narrow.

The first was this about Barclays and their manipulation of LIBOR. In time, I’m sure there will be several other banks fined over this. It takes two to tango and I’d bet there was a roomful of dancers.

The second was this mis-selling of loan products to small businesses by four banks (including Barclays again).

In large and complex organisations it must be near impossible for the people at the top to really know and understand what is going on in all parts of the business. For what it is worth, I think it is hard to hold upper management to blame for the incidents. However, corporate culture starts at the top and works it’s way down. These episodes are not glowing endorsements of British bankers. One can only presume that there are competitive pressures that lead staff to do “whatever it takes” to make money. Apparently that includes colluding with other businesses to rig interest rates and selling unsuitable products to small businesses.

They must be so proud of themselves as they overlook the Thames from their penthouse apartments.

I am, of course, being selective. A snapshot of news from the last few weeks could have lead me to wag my critical finger at bankers in Spain. Or Greece. Or Cyprus it seems. Perhaps Slovenian bankers are next…?

If you can spot a trend here, you might be right. Perhaps the problem lies with the bankers?

Historically, the role of a bank was the prudent management of money. Banks are supposed to be careful, conservative places. No more it seems.

The proposed banking union contains elements relating to the regulation of large multi-national banks. I hope there are plans for it to have real teeth. The banking union is an opportunity to regulate up into the space above national jurisdictions where globalised businesses dominate the space.

The two stories I mentioned above involve some pretty substantial fines. In the first, Barclays was fined some GBP290 million. In the second, the total costs to the banks are estimated at over GBP1 billion. Those are the kinds of staggering numbers that the regulator proposed within the banking union will need to be able fine a company if it is to really have an impact.

Economy & Euro, Financial Services
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Why Do We Still Tax Savings?

Posted by financialguy on 28/06/12

The title of this blog post asks a very simple question, but one that I feel needs asking in the present circumstances.

In many countries, the interest earned on savings in a bank account are liable for some form of taxation. Usually it is taxed as earned income at the same rates as any other earned income. Governments want their share of everything and this falls within that criteria…

However, in a world where individuals save precious little and banks and governments have faced – and are facing – repeated liquidity problems, it seems as though encouraging people to save ought to be a very high priority. Considering just how low interest rates on cash are these days, the interest being earned is not great and the taxable income is even lower. Is there really that much to lose by trying?

Similarly, with a demographic crisis looming on the horizon, better incentives to save into pensions would be useful. They would also have the added benefit of bringing in more cash to markets. Since many managed pension funds invest in “safe” government bonds, this appears like a possible way to increase liquidity into the bond market.

I admit fully that I do not have the available information or the analytical powers to assess just how well such measures may – or may not – work. But in a world where every idea from eurozone leaders seems to have failed to be the solution, improving the incentives of almost 500 million people to save might be one way forward.

Economy & Euro, financial nightmare, Financial Services, Taxation
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Polar Opposites And A European Banking Union

Posted by financialguy on 11/06/12

Over the last ten days or so there has been much talk about a European Banking Union (if this is all news to you, this post by Gavyn Davies in the FT explains all you might need to know). Since that post has been written there has been much said and thought and of course the nottabailout in Spain of the banks.

As always, the folks atop the EU are speaking about this as the next great solution to the eurozone crisis. There have been, of course, a number of next great solutions – none of which has been anything like a solution so far.

Thus, it was with little surprise that I read something a few days ago that came out of the annual conference of the International Institute of Finance in Copenhagen. The leading bankers attended seem to agree that a banking union could take twenty years to implement. I don’t imagine for a second that anything can or should take that long to implement, but still, if it only took two years it would likely be too late.

Also from the conference was this from Mr Douglas Flint, Chairman of the Board, “One of the most important lessons of the financial crisis was that banks must be able to take risks, must be able to fail, and therefore must be capable of being resolved upon failure. With the determination of national authorities and the cooperation of private financial institutions, we believe that an effective resolution system can be put in place.“

So EU leaders are trying to find a way to ensure that banks can be regulated and saved at EU level, while bankers want to be sure that banks can take risks and fail when they get things wrong. This sounds like it has the potential to be another nice idea that gets stuck in the long grass of lobbying and makes little meaningful progress. Considering the understandable amount of banker bashing that has gone on over the last two years or so in the media across the EU (and in the US), it would seem that the public at large will be all for banks failing if appropriate. Looking at the amounts of money that have already left the banking system in countries such as Greece and Spain, trust and confidence are already long gone.

The question will be how to let banks trade off the latest stock or forex news or whatever, take risks and not be able to bring down the entire world economy if and when they screw up. All of this is making me wonder whether we shouldn’t be trying to promote barter much more through the EU… :-(

credit crunch, Economy & Euro, financial nightmare
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Financial History Repeats Itself Too

Posted by financialguy on 05/06/12

Recently I have been dipping into The Great Crash 1929 by J.K Galbraith. It is a wonderful book that I cannot recommend highly enough. Everyone should read it. It should be part of the curriculum in every country for every student. I can only hope that there are finance ministers around the world reading it now.

From the end of the book I take a few sentences today where Galbraith describes the main factors that caused the great depression. As he saw them, they were:

(i) The bad distribution of income.

(ii) The bad corporate structure.

(iii) The bad banking structure.

(iv) The dubious state of the foreign balance.

(v) The poor state of economic intelligence.

Sounds depressingly similar to the state of the eurozone today, doesn’t it…

bear market, depression, Economy & Euro, financial nightmare
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Two Downside Only Elections

Posted by financialguy on 04/06/12

In the end, a vote in favour of the Fiscal Compact of just over 60% looks like Ireland was almost in agreement. If nothing else, the vote shows just how far the eurozone crisis has come and how meaningless many of the measures to date have been.

When the Fiscal Compact was first announced and the UK took a step backwards back in December, it was not clear that the deal would be overly helpful in solving the crisis. Within days of it’s agreement, it was clear to many banking and financial pundits that it would have virtually no impact at all. Just a few months later and it had simply become a self-made banana skin to be avoided by the EU.

As events charge onwards, the Irish vote had become a damage limitation exercise. If the Irish people had voted no, all hell may have broken loose. As it was, they voted yes and it barely made the news.

The situation in Greece is barely any different. If the outcome of the forthcoming general election in Greece is one without a clear result again, or with a clear mandate given to an anti-austerity party, all hell may break loose and who knows where it may end. If, on the other hand, a coalition is possible from parties that plan to follow through on the already agreed austerity measures, then we are back to the debates about how much austerity and how to create growth in a nation in depression.

In other words, these are two democratic elections without obvious upside apart from the demonstration that Europe is still democratic despite the problems being faced. Perhaps that is enough for now…

democracy, Economy & Euro
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What About Cyprus?

Posted by financialguy on 16/05/12

It seems that as the days pass, more and more officials are openly discussing a Greek exit from the euro. Now that this sort of momentum is building it is impossible to see any other course of action. I first wrote about a Greek exit here all the way back in May 2011. It was pretty obvious then and it is crystal clear now.

It strikes me that there will be a lot of very significant knock-on effects if and when Greece leaves the euro. I do not profess to be able to predict them with any level of accuracy. Instead, I intend to simply ask an open question and hope for intelligent responses.

What about Cyprus?

Firstly, I ought to point out that I have never been to either Greece or Cyprus, so I claim no expert knowledge whatsoever. From my background knowledge and some reading here and there, it seems as though a Greek exit will have profound impacts on Cyprus financially and economically, but possibly also politically and militarily.

Any thoughts?

Economy & Euro, Enlargement & Neighbours
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Misunderstanding The Greek Election Results

Posted by financialguy on 10/05/12

As I read some of the latest news about the Greek election and the attempts to form a government I am struck by the following quotes:

“We cannot make true our dream of a left-wing government“, says Alexis Tsipras of SYRIZA and that “Foreign creditors are now more open to renegotiate“.

Meanwhile, “Should Greece stop its reforms, then I don’t see that remaining tranches will be paid”, says German MP Guido Westerwelle.

I wonder who has the power to win that misunderstanding…?

Separately, your author was discussing the Greek situation yesterday with someone who has just moved from the country, after three years on mission there. Reflecting on the dramatic split between parties in the recent election, her thoughts were not about whether or not the country can repay it’s debts or should stay in the eurozone, but whether or not it will head towards civil war.

That should be very sobering to us all.

Economy & Euro, Elections, financial nightmare
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Individuals Hold The Key To European Economic Recovery

Posted by financialguy on 08/05/12

In my last post (What Is The Cost To Europe Of Individual Actions?) I looked at the apparent movement of money out of Greece and into potentially safer locations. That is, of course, only one form of individual action.

This weekend has seen another sort of individual action which has the collective power to cause economic disaster: voting.

The results from France and Greece provide for further rounds of potential trouble in the eurozone crisis.

While France is the bigger economy, it is in much better health at the moment, so should this weekend’s election cause problems, they ought to be much further into the future. However, if increased spending leads to debt problems in France – and the indicators seem to suggest that the economy is slowing – they will be very big problems. Quite simply, the euro and the EU cannot afford for their to be economic problems in France. When I say, “the EU”, I don’t just mean that problems could be a pain for policy wonks in Brussels to deal with, I mean that the future of Europe could be at stake.

In the shorter term, the possibility of renegotiating the fiscal compact will appeal to no-one. Since virtually everyone has come to agree that the compact achieves very little, despite the effort that went into it, there seems to be little point in raising the subject. But still, it is symbolic. The real problem is that it will simply be a distraction from solving the actual crisis, while reminding the markets just how difficult it is to reach a political agreement between member states and how far Europe remains from a solution to the crisis.

The Greek tragedy continues

More immediately, the election results look like they will throw Greece into another round of chaos. On one level, it would seem reasonable that voters may not worry about the threat of default since Greece is already broke. Why not vote for an anti-austerity party?

I have no doubt that the average Greek voter is going through some very real pain right now and would like for it to stop. However, the country has been shielded by it’s continued membership of the euro. If Greece is forced to exit the eurozone – and an anti-austerity result would seem to increase that possibility – then the devaluation that would likely follow would be a much more painful experience. By voting for an end to today’s pain, the Greek electorate may be causing much worse pain tomorrow.

This is the natural reaction to hard times from an electorate. When things don’t seem to be going well, a change may be in order. However, looking at the changes being voted for, it is not clear to this blogger that they are a step in the right direction. The discussion between austerity and growth is a vital one, but it is not clear that governments have much to add to it. With the best will in the world, I find it difficult to imagine that French politicians are the right people to stimulate growth. Is any politician?

Individuals hold the key to European economic recovery

The Keynesian approach of allowing governments to borrow and spend during a downturn is well known, but it is reliant on repaying debt during the good times. Since the good times caused a boom in borrowing, it is not clear why the downturn should still enable governments to spend. All that debt leaves government with the job of balancing budgets to repay it.

Growth is the job of small companies that can hire staff, make profits and drive the economy forward. To assist that, governments need to cut red tape and make their nation more start-up friendly. I don’t recall hearing or reading anything substantial about that in the French presidential race (though with my French, there is a limit to comprehension in place).

The individual actions needed across Europe are not making protest votes or waiting for a politician to make things better. They are for bright people to put their ideas into action and start their own companies. If things go well, they have created an economic opportunity that can provide for themselves and hopefully their family. If things go really well, they can create one or more jobs for other people, pay some taxes and spend some money in the economy.

Can the politicians promote that instead of renegotiating?

Economy & Euro, EU Priorities and Opinion, financial nightmare, Innovation and Growth
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What Is The Cost To Europe Of Individual Actions?

Posted by financialguy on 30/04/12

Your author has just returned from a short weekend trip to Berlin. This is not my first visit, but it was my first time with a group of people that are mostly German, live in the city and know it well. In other words, I was able to see and learn much more than the typical short tourist city break seeing the usual sights.

As we walked from street to street, three members of this group separately told me the same thing about different areas.

“Property prices are rising here”.

I then followed those statements with the obvious question, “Why is that?”

Each one then independently of the others explained that, “There are a lot of Greek’s buying property for cash right now”.

I have conducted no research to back up those claims, but many of us will have seen news reports over the last twelve months or so that there are large numbers of Greeks buying property in London or transferring money out of the country. This seems to fit the previously established narrative.

Individually, the decision as to whether or not to keep money in Greece during these troubled times is being made sensibly and rationally. Yet as a collective, this outflow of money from the Greek banking system condemns the country to an even deeper and more troubled future. One presumes that much of this money is the result of all the untaxed income that we now hear so much about.

I fear that this is an example of what might happen if the eurozone crisis really gets serious. (I know it is very serious already and has been for a long time, but I mean countries leaving the eurozone serious, or worse).

If the currency starts to collapse, the sensible and rational action for tens of millions of people will be to move their money. The sensible and rational action for a number of European governments will be to introduce currency controls and close borders to try and stop that from happening. Currency smuggling would likely become a massive problem with a massive impact on banks and governments.

Suddenly, governments would be rolling back years of European development in areas such as the single market and Schengen (and I am sure many others that I cannot presently think of). Following the negative impact on democracy that we have already seen (unelected technocratic governments in Greece and Italy), political instability (how many governments have now fallen because of the euro?), the rise in unemployment leading to social problems, it might follow that European treaties are the next to suffer.

Economy & Euro, EU Treaty & Institutions, financial nightmare
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Market Participants Are Not Omnipotent

Posted by financialguy on 25/04/12

This week provided a stark reminder that “markets” are not as perfect as we might hope.

The double-whammy of the Dutch government falling and Nicolas Sarkozy narrowly losing the first round presidential vote sent markets sharply down. Yet, for those of us that follow politics and policy, weren’t these reasonably predictable events? The polls had certainly been suggesting problems for Sarkozy for weeks. Why the sudden shock in the markets?

I admit that what follows is a broad generalisation and I apologise for that, but to me, I think many people involved in “high finance” aren’t all that politically aware. Now I admit that none of the people I know are at the top of the pyramid making decisions that impact us all, but the people I know further down the pyramid making daily buy and sell decisions or acting as brokers are not followers of politics.

They are relatively normal people that did well in math and economics at university and now focus their attention on making money, their annual bonus, football, drinking and chasing girls. Their above average salaries and IQ makes them confident in their abilities, perhaps over confident. In other words, they are like most other men under the age of 35 or so. I presume that the people one or two rungs above them on the ladder are simply older and more successful versions of them – it is like that in most other industries, so why not finance?

This all becomes problematic when the role of markets is so important, as it is now. Many of the decisions being made by politicians and central bankers are important and they are worried about the impact of their decisions in the market, but often the market is not watching!

A solution to this is not obvious and perhaps not needed, but we must stay alert because some of the people shaping events are asleep at the wheel.

Economy & Euro, financial nightmare, Financial Services
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Can The Eurozone Crisis Be Solved While Europe Remains At War With Each Other?

Posted by financialguy on 13/04/12

Life has been treating me well recently (summer is coming, I have a new business venture to concentrate my mind on, several people have commented that I have “lost weight” and family members have recently visited me) and it hard to imagine things being much better (save for a Victoria’s Secret model calling me for a date – I am free on Saturday by the way…) but despite this I feel as though I have little choice but to be negative about Europe.

The push and pull of internal politics at the highest levels makes unpleasant demands on a politician. Whether a politician truly believes a thing or not almost becomes an irrelevance. He or she has to say a thing in a situation simply because that is his or her role. To do otherwise could cause untold harm.

As an example, I am sure that when David Cameron had to opt out of the now seemingly worthless fiscal compact in December he felt awful. But that was his job. By saying yes to something he had to say no to something else. I presume he believed in what he was doing, but whether he did or not is largely irrelevant. He was doing what he had to do for the people and interests he was representing.

Why do I bring this up?

Over the last few days Italian Premier Mario Monti has been causing some trouble for Spain’s Mariano Rajoy. He has been doing this because he needs to protect Italy and having another scapegoat for the markets probably seems like a nice, neat solution. In France, Nicolas Sarkozy has also been picking on Mr Rajoy. This is to help him seem populist as he struggles in the polls ahead of a tough election. To alter a well known phrase, “It’s only politics”.

It is easy, of course, to kick a man when he is down and let’s be clear, the Spanish economy is off the ropes and onto it’s knees right now. Poor Mr Rajoy picked up a very heavily poisoned chalice when he won in December. He could do an absolutely brilliant job in his time in office and things could still go horribly wrong. Correction. They are going horribly wrong.

Everyone is worried about Spain. There simply is not enough money to bail them out if required, as Wolfgang Munchau has recently suggested. He takes the matter further, pointing out that the crisis resolution mechanisms are still not in place. He has been right about so much in the last three years that it seems churlish to doubt him now.

This is the European dilemma. The pull of national policies and politics against those of the community. It seems impossible to imagine that this contradiction can ever be solved without true federalism which is anathema to many (including me). By having to constantly focus on either building a consensus or doing whatever Germany insists upon, the eurozone crisis limps along with no resolution on the horizon.

Clearly, at some point, countries will need to start leaving the eurozone. Everyone involved in the crisis must recognise that by now, but the longer this inevitability is postponed, the costlier – economically, financially and socially – the price we all need to pay becomes.

As I read about European leaders picking at each other for the sake of personal or national benefit while the rest of the continent burns around them, it is difficult to imagine anything but a terrible collapse for the whole eurozone. As a very well informed friend commented to me in an email today, “This sucker is going down, hard. What’s still up for grabs is whether denial and lengthening the process will make the social unrest worse or much worse.” I personally fear that Europe will find itself in a place where it is essentially bankrupted for decades to come.

It is hard not to be negative when you are worried about that.

Economy & Euro
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The Other Side Of The Skills Mismatch

Posted by financialguy on 01/04/12

Several of my recent posts have related to the “skills mismatch” in Europe. In these times of high unemployment it seems right to do so and I clearly recall the emphasis placed on education during the eSkills launch a few weeks ago (I wrote about it here).

There are, however, two sides to every story. For every story about a qualified person looking for a job, there is a story about an employer with ridiculous expectations. Just to be clear, I mean ridiculous bordering on the insane.

When I used to work in Brussels, I used to joke with friends that some positions contained “fluent Estonian a plus” when the job descriptions being advertised were in a class of their own. You know the sort, we have all seen them, they seem to want a person like you but to a degree of expertise that perhaps only one person in the world holds. Eighteen years of work experience in a twenty-five year old…

Employers seem to wonder why their positions remain open despite the fact that their advertisement would make a chess grandmaster feel intellectually inferior. Or, of course, there are the other adverts for which recruitment consultants in the UK are experts. These are the adverts that demand perfection in an applicant, stressing how the employer is a “Tier 1″ this or a “world class” that, but contain four spelling and syntactical errors in two hundred words. “We hire only the best”, apart from the idiot that does our recruitment advertising…

There is a reason for this rant. Your author has just seen an advert in today’s “Sunday Times” in Malta for an “Online Marketing Specialist”. Those that know me – maybe even you? – will know that I am an Online Marketing Specialist and just a hobbyist in EU affairs.

The advert requires expertise in SEO, PPC, SEM, Social Media, CRM, JV negotiation and all sorts of other things that companies like (being a team player, determined, sales, target focused, etc etc) and I’d guess that I could do – and prove it – perhaps eighty percent of the position. It is pretty specialised and I am pretty specialised. I would imagine that there are very few people that could fill the role as described because it requires a combination of skills that you don’t tend to see in one person. (Even I’m not that specialised…) Even more, the company is an online poker site, which means that they need even an more highly specialised individual because many of the skills they want are different in the online gambling world to the rest of the internet.

Anyway, that’s all well and good, but they also want “basic knowledge of the Japanese language” and “Extensive online marketing experience in the US and Japan”. Here in Malta, I’d guess that means that they have advertised to at most two people, but more realistically, none. As I mentioned above, ridiculous bordering on insane.

To me, this sounds like a marketing mistake – paying to advertise in a newspaper to a prospective audience of zero. Poor ROI. Someone that could do this role would most likely already have some side projects and incomes in place and so not actually need a job. Just like me. This means that the benefits need to be pretty darn strong to tempt us back into an office with politics, wearing a suit, a commute, an annoying boss, no salary increase despite doubling revenues and on and on. Instead, they breach one of the fundamental rules of advertising by writing copy that is all about them with no “What’s in it for me”. There is no mention of salary, benefits, pension, or for that matter, lessons in Japanese.

So I wonder what we can do. It is all very well that the European Commission wants to see people better educated and have more computer related skills. That can only be good for the European economy. However, I would suggest that they also need to work on the other side of this particular coin. Employers need to get real and understand that the “superstar” they want to triple their business while they are in Majorca on holiday may not actually exist and if he or she does, they won’t want to work the requested miracles for 20,000 per year.

A quick look at the job section of any newspaper reveals lots of vacancies. Many of those potential employers seem to be looking for Superman. If the skills mismatch in Europe is to be repaired, someone somewhere needs to start addressing this aspect and finding a way to get employers back into reality and employing again.

Now that is off my chest I am going to email this to the online gambling firm :-)

Economy & Euro, InfoSociety
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FinancialGuy Writes! rss

Formerly in finance, now in the EU world, this is a take on financial and economic matters, EU Innovation policy intermingled with occassional interviews of EU policy professionals. Click here to find out more.



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