The local lad, more meat on a seagull, walks precariously on the narrow ledge of the enormous bridge. One false move and he is gone. Far below, the green Neretva river moves slowly. The blazing summer sun forces the locals into the shade and it is from here underneath a large home-made canopy on the Muslim side of Mostar in Bosnia that we watch the spectacle.
He reaches the crest of this extraordinary bridge, built by the Turks in the 16th century, destroyed – in a crass act of cultural vandalism – by the Croat army 20 years ago and rebuilt piece by piece by the new Bosnian government with Turkish and French money. This is the bridge – the ‘Most’ – from which this beautiful town Mostar gets its name.
The crowd gathers, waiting. The boy jumps, screaming, arms and legs flailing – as if riding an invisible, mid-air bicycle – and then whoosh, he’s in the river. For a second, he is gone. Then a tiny head emerges, laughing, punching the air. Triumph. The crowd roars its approval. The next waif scurries up the bridge.
“We used to do this all together before the war. Now the kids from both sides don’t mix too much.”
They’re masters of understatement, these Bosnians.
My three Bosnian friends have had their lives dominated, destroyed and then ultimately rebuilt by the war in Bosnia. Only 20 years ago this month, Serb forces rampaged through this beautiful country, murdering, burning, terrorising in the name of Greater Serbia, opening up ethnic divisions which, for many, were of no consequence before the shooting started.
Now reconciliation is a difficult road. This dreadful and tortured experience in Bosnia makes the achievement of the EU and in particular the alliance between Germany and France after the Second World War all the more remarkable.
True, the potential warring parties were kept apart by the realpolitik of the Cold War. It was Nato and not the European Community that prevented another war in Europe. It was American military power and the prospect of mutually assured destruction that kept Europeans from each other’s throats. The EC claims to have been responsible, but neither an enfeebled Germany nor a colonially compromised France were in any shape to exercise military power.
However, the peaceful and respectful nature of the EU is truly a remarkable achievement, especially when seen from somewhere like here, deep in the Balkans.
This is why the latest twist in the EU’s road, the devotion to the euro and that fact that Europe’s leaders have been prepared to risk the EU in order to preserve the euro must be one of the most bizarre political initiatives of the past 50 years.
Far from bringing the EU together, the present policies threaten to push the countries of Europe needlessly apart with the eurozone splitting between creditor and debtor countries and each pointing the finger at the other.
The EU top brass need growth in order to convince the people that the policy – which is essentially a creditor’s charter – has a chance of success.
This is why the news this week must be music to the ears of the bureaucrats. On Wednesday, both German and French GDP growth beat expectations. This follows news that the rate of economic shrinkage in Greece is declining. Not getting worse is not the same as getting better, but after years of economic catastrophe, the fact that there could be a floor for the Greek economy has to come as a relief to the Greeks above all.
Latest data also indicates that European manufacturing might also be stabilising. The latest Purchasing Managers Index – which measures the health of the manufacturing sector – just hit a two-year high.
Could the worst in Europe be over?
There is a huge difference between the rates of decline slowing and the possibility of a real turnaround, but latest data are encouraging for the continent. European consumer confidence is also picking up and is heading back to levels of optimism not seen since 2005. So let’s see what happens next, as survey data is quite a good leading indicator of where the economy could be headed.
Where might a European economic recovery leave Ireland?
There is a tendency in Ireland to see a European recovery as being good for Ireland, via exports and the improvement of European banks’ balance sheets, facilitating more lending to us.
However, this tendency is misplaced. The relationship between Ireland and Europe is not straightforward. Yes, for policy purposes Europe is significant; but in terms of real trade and investment, the US and Britain are by far, the most significant players.
Indeed, given the hugely indebted state of Ireland – the most indebted nation on earth (when all debts are taken together), the rate of interest dictated in Germany matters much more than whether German people are spending or not.
If the European recovery is strong enough to change interest rates expectations and if the ECB were to change course and begin the process of raising rates or even change the policy of the last five years from lower and lower interest rates to somewhat higher rates, what would happen here?
It has always been the case that the financial impact of interest rates movements in Ireland has been much more dramatic than the real impact of a growing Germany on Irish exports and thus trickling down to Irish jobs. This is because the balance sheet of the average Irish person is so dependent on the rate of interest as the balance sheet is carrying so much debt.
Therefore, Ireland is in the strange position for a member of the eurozone in that our ideal economic combination is a weak European economy (giving us low interest rates) and a strong American and British economy (giving us buoyancy in exports).
This bizarre outcome is the direct result of our political elite allying our country financially to countries we do modest trade with via the euro and yet at the same time, allying us umbilically to America via the direct foreign investment policy. It is a case of the left hand not knowing what the right hand is doing.
What happens to the 375,000 tracker mortgages if the European recovery takes off and pushes up the monthly mortgage payments?
Where do Ireland and Europe’s interests start to diverge?
The big European picture is that there can be no doubt that a return to growth in Europe is good for the entire project. When we are talking big things like international reconciliation, particularly given the continent’s history, it would seem a little bit Hiberno-centric to be pointing out uncomfortable truths like the fact that Ireland’s immediate economic future is a bet that Europe remains in the doldrums. But that’s the way it is. For Irish balance sheets to recover, Europe needs to remain weak.
So yes, to avoid another Mostar, a strong European economy is necessary, but who will tell that to a couple trying to make ends meet somewhere in Ireland?
Subscribe to receive my news and articles direct to your inbox
Early bird and all that
So David is saying that since Irish households (and many businesses) are so heavily in debt, we need to keep interest rates low, to prevent personal and corporate bankruptcies. Why not avail of both the new personal insolvency laws, and the improved economic conditions, to get the inevitable wave of bankruptcies over with? After all, debts that can’t be repaid, won’t be repaid, and it’s what they’d do in the UK and US. Surely the best way for a fresh start is through this magic door. As if by magic, one’s debts are gone and there is no more ominous… Read more »
As Emily O’Reilly quoting President Michael D Higgins, at the Magill summer school in Glenties said: “There is a deep-seated anti-intellectualism prevalent in Irish life,” and that our political and cultural life is marked by the false notion that one person’s ignorance was as good as another’s knowledge”. There are lighthouse principles which cannot be violated with impunity. If we step off a sea-cliff we are governed by gravity, a natural law. We may want to swallow-dive into the sea below to impress people. That may be our personal value proposition. Values drive behaviour. Principles drive the consequences of behaviour.… Read more »
Hi, I understand the point you make in you’d mistitled article but your point is a reciprocal of the reality. Let me explain. I agree completely that it is ludicrous for the people in fail eireann to tie us to Germany when the US and the UK are our more important trading partners. The uncomfortable reality is the fact that we the people accept and vote for such nonsense not the fact that progress in Europe is bad for Ireland. I’m just curious regarding the data from the PMI and GDP; is the data measured in Euro terms or in… Read more »
According to the CSO Main Trading Partners – 2012 €m
Exports
Great Britain and Northern Ireland
15,266.4
Other EU Countries
39,111.8
USA
18,157.0
Rest of World
19,512.7
Total
92,048.0
Other EU Countries actually greater than UK and USA combined – ignoring the fact that UK is in EU as well.
Also you seem to mix up the Second World War and the Cold War. Germany and France were on the same side during the Cold War – at least Western Germany.
David: if it started snowing gold nuggets in Europe you would be saying “ah, but they don’t have the Sterling stamp on them, so they’re no good”. You stretch all logic to breaking point in your Europhobic-Anglophilic propaganda. What you are really afraid of is that Ireland, hitched to the European economic engine rather than the British one, will take off and leave Britain far behind. Britain has always been terrified of a prosperous Ireland linked to Continental Europe. It has dominated British thinking about Ireland since the reign of Elizabeth I. Your “For Irish balance sheets to recover, Europe… Read more »
A return to growth in Europe should be welcomed in Ireland. The key points are of course that this growth should be sustainable and represent progress in improving living standards for all European citizens. It’s is truly shocking that Ireland finds itself in a position that growth in Europe, which could see interest rates increase as demand for finance increases, could be unwelcome. This idea that stagnation and lack of development predominates has parallels in policies that were pursued back in 1913, with this year being the 100th anniversary. Shane Coleman on this mornings newstalk radio outlined how back in… Read more »
Interest rate rises no matter where you are means cost of money will climb and risk in speculation will rise as well – putting a curb on that nonsense as well. Interest rates are the litmus test of economic health. There are 2 issues being mixed up here. The social problems relating to indebtedness and unemployment (many of whom were tied to the property industry) and damaged business relying on a much weakened domestic market. Is it being suggested that the health of economy is to be solely directed by progress here? Even if Ireland had its own currency and… Read more »
From a historical perspective the picture you paint of Mostar in the Balkans is a little skewed. To describe what was happening before the Croat forces shelled the bridge would be more apt rather than insinuating a guilty and innocent party. However, the fact that the bridge in Mostar stood for over 400 years is testament to the Ottoman legacy of instilling a singular identity which only ruptured after the Allies post WW1 & 2 country building came crashing down after the Cold War. The Ottomans were also the catalyst for the demographic change too. So, much like economics it… Read more »
“higher rates, what would happen ?…” The UK and US economies are like two corpses awaiting the arrival of the state coroner to officially announce them dead. In economic terms this announcement is the equivalent of an interest rate increase. As long as the coroner is being stuck in traffic (interest rate being kept at near zero) the two corpses are technically alive. But that traffic jam can’t last forever, the coroner will arrive eventually to state the obvious, they are dead. Obviously some commentators will claim that the coroner killed them by announcing them dead, as if there was… Read more »
´´What happens to the 375,000 tracker mortgages if the European recovery takes off and pushes up the monthly mortgage payments?´´ The key point in your article David, Why did you not expand on it? We are in a schizophrenic sitiation in Ireland. The unemployed, those with jobs and variable rate mortgages should celebrate any return of growth to the European economy but the tracker martgage holders wages won´t rise as fast as interest rate element of their mortgages thus depressing demand from over a quarter of the households in Ireland. On the positive side savers will once more be rewarded… Read more »
One the best articles I have seen recently on the Irish economy http://wapo.st/16CbQWq
in light Constantin Gurdgiev’s article yesterday (Sunday Times)
“Ireland’s Knowledge Economy Is A Sham”
and how Max Keiser routinely refers to McJobs as Junk Jobs
I’d like to propose a new word noun/verb. “SHAM JUNK”
Wikipedia: “SLAM DUNK” = something that has an outcome of guaranteed SUCCESS.
thus
“SHAM JUNK” = something that has an outcome of guaranteed FAILURE.
“Adopting the Euro was in hindsight a sham junk.”
“Lenihan sham junked the Irish economy.”
“Borrowing 40k for a degree in media studies is a total sham junk.”
+1
The manifestation of our general disregard and ill-equipped outlook is being exposed in the vaudeville limelight and yet the Irish audience seem bizarrely content to repeatedly pay the admission price. A word you seldom hear these days is ‘sophistication’ or ‘intelligentsia’.
“The point is not whether the Irish Times called it right – I don’t know, the data isn’t sufficient. And, for the same reason, the Irish Times doesn’t know either. The point is the establishment’s ability, at all times, to convince itself of anything it wants to believe.”
http://www.independent.ie/opinion/columnists/gene-kerrigan/the-disastrous-reality-of-selfdelusion-29507693.html
Anyone got a link for Gurdgievs recent article about the knowledge economy. The search function on the Irish Times website is horrendous.
The circle comes full circle and things will never change.
David, Its important to recognise the effect of 400 years of Turkish aggression had on Croats which made British impearialism in Ireland look like an afternoon picnic. Janissaries! Yes, the Turks came without invitation and captured male Croat teenagers, sent them back to Constantinople, forced the boys to convert to islam, trained them for a few years in the art of butchery, and then send them out back to Croatia to murder their own people in the name of the sultan. Of course there was a way out of doing this if you were a Croat family, fearing this likely… Read more »
Where is Mr. bonbon this weather? – I’d almost miss him (her?) – almost.
Probably busy cruising the French Riviera for the summer months.
Aye Bonbon.. If you’re on sabbatical… don’t make it a prolonged one.
Everyone has the right to vent their spleen, whatever their outlook.
It’s free speech for all…. at least until emperor Enda tries to take this isle down the totalitarian route like Barracked ‘hear no evil, see no evil’ Obama.
Not that I expect his sejourn to be a long one. (Dame Enda that is!)
Indeed.. Well for starters they’re both spoofers& pathological liars! Obama is the more polished orator obviously (not a big stretch) but in substance they’re as hollow as each other. The main difference is the consequences of their deceptions… Enda’s are more or less confined to a national level whereas Obama’s have much more far reaching and chilling ramifications!
Good Article.
Seems to have brought the nasty people out of the rocks.
I preferred your article from two weeks ago when you were empathetic.
But today I realise you are little right wing runt who knows who his friends are.
You won’t ever cross this door.
Hi,
Maybe Angela should make a rousing ‘we’ve turned the corner european syle’ speech what with the one quarter of anaemic growth (french & german growth which skews the overall figure anyway putting a false sheen on it.)
And another thing, must we remind RTE individuals and other culpable mouthpieces again to stop using the term ‘negative growth’ where applicable, an erroneous term. Call it what it is…. ECONOMIC CONTRACTION!!!
Check this out, dude goes postal when he tries to acquire some Superquinn sausages only to be told to DO ONE…
http://www.independent.ie/irish-news/supermarket-fight-terrifies-shoppers-29511768.html
it’s all Fergal’s fault for flogging the family biz to those arse fell outta their pants feckless speculators!
It takes one back to that show some years back where Des Bishop worked in various jobs, including Superquinn where employees had to bawl HELLO incessantly to everyone within a 10 foot radius!
Haha nifty product placement… ‘Zis kind of nonsense could never occur in an orderly german hypermarket Jaaa-wwoull… Indo are cake.. Gene Kerrigan will maybe dovetail it into the Sindo soapbox with a nugget on food price inflation!
That bit where he goes back for seconds.. pans out in the doorway and then ur man-o leans out and takes a swipe toward his crotch direction?! :O probably retrieved a piece of the lovely fried chicken that the Indo were fretting over.
It really is a sign of the times when the ‘marquis of queensbury’ can not be observed.. You do not make sinister swipes at an opponents crotch when he doth be spreadeagled on the ground.
Very unsporting chaps!
…thing is…the militant power elites who have hijacked the Irish economy – under the guise of a corrupt banking system – don’t give a damn about Joe average and his i rate nightmare scenario.
Thus the issue of the i rates increasing for those who got suckered by the property ponzu scam will be thrown over board into abyss and go the way of the 150,000 emigrants of the last 4 years, the free market enterprise system built up in the 80’s – early 90’s, and the Celtic Tiger.
Militant was a far left party in the uk during the 80s.
Content tip.
Justify your text.
Makes a blog look more polished & professional.
Devil is in the detail :-)
Amateurs.
David must be on holiday this week – wot no announcement?!
Peter Schiff on how the stats are fiddled to show positive growth when there is in fact contraction(avoiding the oxymoron-negative growth!)
http://usawatchdog.com/phony-government-gdp-numbers-hide-shrinking-u-s-economy-peter-schiff/
http://www.bloomberg.com/news/2013-08-20/china-gold-mine-deals-at-record-after-price-plunge-commodities.html
A follow up article examining the growing strength of the Chinese Renminbi and its use in world trade. Plus the accelerating accumulation of all things gold (and silver)by Chinese mining interests and the general population too.
A follow up article by Ellen Brown re the predatory lending practices of the banks in the US. Parallels are similar to the Irish problems as stated by Greyfox and RR6 and others who are working on exposing these predatory practices.
Considerable comments too on Eliot Spitzer, a US politician, bent on doing something about these problems.
http://webofdebt.wordpress.com/
I have recently been accused on this blog of being both obsessed with money and being cheap with money. I am not obsessed with money in regards that I have to have lots of it and that my life revolves around getting it. It is a false premise. I confess to being obsessed as to finding out what money is, why it is necessary and what constitutes good money or poor money. I confess to being concerned that I have enough assets that I may be as self sufficient as I can. I confess to being concerned since my teens… Read more »
I have recently been accused on this blog of being both obsessed with money and being cheap with money. I am not obsessed with money in regards that I have to have lots of it and that my life revolves around getting it. It is a false premise. I confess to being obsessed as to finding out what money is, why it is necessary and what constitutes good money or poor money. I confess to being concerned that I have enough assets that I may be as self sufficient as I can. I confess to being concerned since my teens… Read more »
Midas du Metropole re 2003 and today comparison. Here it is… Our STALKER source, who is in the bullion business, went to a private meeting in Arizona with four others in his industry. It was back in 2003. The person conducting the meeting did so behind a SCREEN. They could not see what he looked like, but he spoke English very well. The presenter told them his client was going to be buying a lot of gold and that they would be some of the agents doing the buying. Our STALKER source surmised that the person behind the screen was… Read more »
13:02 5-yr TIPS auction(reopen) yields (0.127%) with bid/cover 2.18 vs average 2.77 Allotted at high 93.21% Indirect participation 38.17% vs. average 41.12% Direct Participation 8.13% In reaction: 2-year (1/32) to yield 0.39% 3-year (5/32) to yield 0.82% 5-year (7/32) to yield 1.69% 7-year (6/32) to yield 2.34% 10-year (6/32) to yield 2.92% 30-year +7/32 to yield 3.91% Dow +32.84 to 14,930.39 Ten year rate approaching 3% or double the rate of 3 months ago. Greatest effect is on long term mortgage rates and its affect on the “Housing Revival” in the US and the bond rates around the world in… Read more »
John Credele: Fed is screwed, and we with it. Backed into a corner. No matter what it does or does not do interest rates are going to rise.
http://www.nypost.com/p/news/business/economy_imperiled_as_qe_bag_of_tricks_7m5oznZ9Rsqfk7SANJibyK
http://www.nypost.com/p/news/business/economy_imperiled_as_qe_bag_of_tricks_7m5oznZ9Rsqfk7SANJibyK Ireland: Despite bailout success, household debt crisis rolls on: The WSJ discussed the household debt crisis in Ireland. The article noted that many homeowners are finding it difficult to make their mortgage payments due to the pressures from the government’s austerity program and rising unemployment. It added that home loans in arrears have doubled to more than 12% of all principal home loans in the past two years. According to the article, the struggles are expected to continue until the country finds a way to help its weakened banks pare down the large number of problem loans. However, the… Read more »
Stagflation is foregone conclusion
“With U.S. consumers too indebted to take on more debt, with job prospects dismal and consumer incomes falling, decline, not recover is in the cards. The Federal Reserve’s money printing policy is inconsistent with negative real interest rates and with a stable dollar. When the house of cards falls, Americans will face another wealth loss together with rising prices and rising unemployment. ”
– Paul Craig Roberts
When paper money stars to crater people would rather have the real thing, –in India anyway.
http://bullmarketthinking.com/indian-gold-dealer-gold-is-now-trading-at-1800oz-small-factories-and-workshops-are-shutting-down/
Any knowledge about this site
http://freemanireland.ning.com/
To save the Euro Greece was bailed out with planeloads of EU central bank cash.
http://www.dailymail.co.uk/news/article-2401410/The-secret-plane-stuffed-cash-saved-euro-When-Greece-burned-banks-melted-EU-talked-tough-threatened-cut-loose–covertly-flooded-10billion.html
What is money? This has been said many times before in this blog. At its purest it is a communications system for contract settlement and banks or your box of gold or whatever you have is merely a memory of all contracts settled. The fact that for the vast majority of us, we throw away the artefacts of contract details and retain just the outcome or value number does not really change matters. It is still a memory. As we move to the information age in more depth, it is very likely that all underlying contracts will be recallable to… Read more »
JoeR/5 fingers
This will take a bit of reading!!!
http://www.citizensinformation.ie/en/housing/renting_a_home/
Seems as if Tenants have good protection after 6 months of occupancy. The first six months is tenuous unless a lease is agreed.
http://www.citizensinformation.ie/en/housing/renting_a_home/types_of_tenancy.html
There are detail differences but I do not see substantive differences.
From 1 February 2013 onwards, landlords must ensure that their rental properties fully meet all the minimum standards for rented housing.
If the landlord does not do these works, the housing authority may issue a Prohibition Notice, directing the landlord not to re-let the property until the breach of the regulations has been rectified.
http://www.citizensinformation.ie/en/housing/renting_a_home/repairs_maintenance_and_minimum_physical_standards.html
Perhaps the enforcement of these standards over the last 4 years results in thousands of unoccupied properties. could this be true?
Overall I see little difference in BC or Irish legislation re landlords and tenants.
Security deposit requirements are also similar. In BC the maximum is one half of one months rent plus another one half if a pet is allowed. In Ireland, it is a one month rental amount for deposit.
http://www.citizensinformation.ie/en/housing/renting_a_home/looking_for_a_flat_or_house_to_rent.html#lb14b4
You’re right pauldiv about Tony Brogan. I don’t know whoever is behind the posts under that name, but the writing syntax and grammar bear no relation to TB personal musings on mail