Charlemagne's notebook

European politics

Europe's debt crisis

At bursting point?

Jan 27th 2012, 0:31 by The Economist | BRUSSELS

 

THIS grotesque map of the world, depicting Europe as a bloated balloon, caught my eye this week, and powerfully illustrates one of the factors in Europe's debt crisis. It depicts the countries of the world sized according to the amount of government spending*. that they spend on social protection, from pensions to health, education and unemployment benefits.

In the words of the World Bank, which published it in a report issued this week ("Golden Growth: Restoring the lustre of the European Economic model", here), Europe is the world's “lifestyle superpower”. As opposed to America, which spends almost as much as the rest of the world put together on defence, Europe spends more than the rest of the globe combined on social policies.

In many ways this is an admirable aspect of Europe's economic model, which combines high living standards with high standards of social welfare. The trouble is, such spending is helping to bankrupt governments—not least because those very same caring policies ensure that Europeans live longer, requiring more expenditure on health care and the payment of pensions for more years.

Anybody who wants to understand the strengths and weaknesses of European economies in this time of crisis would do well to read the report (the overview is here).

First the strengths. Europe, say the authors, invented a unique “convergence machine” by admitting successive waves of poorer countries and quickly raising their standards of living. Convergence has been accelerated by the free flow of trade and capital within the European Union. As the report puts it:

Between 1950 and 1973, Western European incomes converged quickly towards those in the United States. Then, until the early 1990s, the incomes of more than 100 million people in the poorer southern periphery—Greece, southern Italy, Portugal, and Spain—grew closer to those in advanced Europe. With the first association agreements with Hungary and Poland in 1994, another 100 million people in Central and Eastern Europe were absorbed into the European Union, and their incomes increased quickly. Another 100 million in the candidate countries in Southeastern Europe are already benefiting from the same aspirations and similar institutions that have helped almost half a billion people achieve the highest standards of living on the planet. If European integration continues, the 75 million people in the eastern partnership will profit in ways that are similar in scope and speed.

Yet this convergence machine is spluttering, and deep reforms are needed. Much effort has been expended on explaining the nature of the financial crisis of the past two years. The sharpest and most concise analysis I know of is a recent policy brief by Jean Pisani-Ferry, director of the Bruegel think-tank in Brussels ("The euro crisis and the new impossible trinity", here). This argues that the problems are deeper than a lack of fiscal discipline: there is a flaw in the way the euro zone was designed, without a lender of last resort, without joint bonds and with a vicious feedback loop that weakens both sovereigns and their banks. There is a tendency in Brussels to think that, if only the euro zone were to make the leap to federalism, all would be solved. Far from it.

The World Bank report shows that Europe has deep structural flaws to contend with. Perhaps most worrying is the slowdown in labour productivity, the underlying driver of economic growth over the long term. This chart (right) shows how Western Europe had almost closed the productivity gap with America by 1995. But thereafter it started to lag ever farther behind the United States (and kept losing its lead over Japan).

The effect is most alarming on the Mediterranean rim. These next two charts show that, as expected, in 2002 northern Europe was more productive than southern Europe, which in turn led the new member states of eastern Europe. But between 2002 and 2008 something strange happened. The convergence machine went into reverse for southern Europe. While the easterners were roaring ahead to catch up with the northerners, prroductivity in Mediterranean countries actually fell.

 

Part of the reason is contained in this chart (right). It shows how foreign direct investment was abruptly redirected from southern countries to the new member states in the east. Mediterranean members faced a triple challenge: they were hit hard by globalisation and the loss of low-tech industries such as textiles; they faced competition from cheaper labour in ex-communist members; and the adoption of the euro made it harder for them to adjust through devaluation. Yet Club Med has only itself to blame. 

A premature adoption of the euro by southern economies is sometimes blamed for this reversal of fortune. Others say that letting the formerly communist countries into the European Union so soon did not give the south enough time to become competitive. But perhaps the most likely explanation is that of all the economies in Europe, the entrepreneurial structures of Greece, Italy, Portugal, and Spain were least suited for the wider European economy. For one thing, a sizable part of net output in southern economies is generated in small firms—almost a third of it in tiny enterprises (with fewer than 10 workers). This is not an entrepreneurial profile suited for a big market. Unsurprisingly, with the expansion of the single market in the 2000s, foreign capital from the richer economies of Continental Europe quickly changed direction, going east instead of south as it had done in the 1990s.

Did the south need more time to adjust, or did it squander opportunities? The latter seems more plausible. Ireland has shown that EU institutions and resources can be translated quickly into competitiveness. The Baltic economies are now doing the same. The chief culprits for the south’s poor performance were high taxes and too many regulations, often poorly administered. While these mattered less when its eastern neighbors were communist and China and India suffered the least business-friendly systems in the world, they are now crippling southern enterprise.

All is not lost. Northern European states, especially Nordic countries, show it is possible to innovate, raise productivity and maintain generous social welfare at the same time. This is the World Bank's explanation for their success:

What has the north done to encourage enterprise and innovation? Much of its success has come from creating a good climate for doing business. All the northern economies are in the top 15 countries of 183 in the World Bank’s Doing Business rankings; at 14th, Sweden is the lowest ranked among them. They have given their enterprises considerable economic freedom. Their governments are doing a lot more. They have speeded up innovation by downloading the “killer applications” that have made the United States the global leader in technology: better incentives for enterprise-sponsored research and development (R&D), public funding mechanisms and intellectual property regimes to foster profitable relations between universities and firms, and a steady supply of workers with tertiary education. Tellingly, Europe’s innovation leaders perform especially well in areas where Europe as a whole lags the United States the most. These features make them global leaders; combining them with generous government spending on R&D and public education systems makes their innovation systems distinctively European.

Even so, there are reasons to worry, even in northern Europe. For instance:

What has been more perplexing is Europe’s generally poor performance in the most technology-intensive sectors—the Internet, biotechnology, computer software, health care equipment, and semiconductors. Put another way, the United States, the Republic of Korea, and Taiwan, China, have been doing well in sectors that are huge now but barely existed in 1975. Europe has been doing better in the more established sectors, especially industrial machinery, electrical equipment, telecommunications, aerospace, automobiles, and personal goods. The United States has young firms like Amazon, Amgen, Apple, Google, Intel, and Microsoft; Europe has Airbus, Mercedes, Nokia, and Volkswagen.

The productivity gap is especially important in Europe, given that Europeans tend to work less than Americans, while spending more on social protection.

The hallmark of the European economic model is perhaps the balance between work and life. With prosperity, Americans buy more goods and services, Europeans more leisure. In the 1950s, Western Europeans worked the equivalent of almost a month more than Americans. By the 1970s, they worked about the same amount. Today, Americans work a month a year more than Dutch, French, Germans, and Swedes, and work notably longer than the less well-off Greeks, Hungarians, Poles, and Spaniards..

And on top of fewer working hours in the day, and taking longer holidays, Europeans have tended to retire earlier—even as they lived longer. By 2007, the French could expect to draw pensions for 15 years longer than they did in 1965. On current trends for immigration and participation in the workforce, says the World Bank, the 45 European countries in its study will lose 50m workers over the next 50 years. Which brings us to that spending bulge.

Europe’s states are not big spenders on either health or education. The variation among countries stems from a difference in spending on pensions and social assistance. Europe’s countries also differ how they tax these benefits; Northern European countries tax the social security benefits of people with high incomes more than others in Europe. After taxes are considered, the southern periphery is the biggest social spender in Western Europe. But the reason why Europe spends more than its peer on public pensions is the same in the north, center and south. This is not because Europe has the oldest population (Japan’s is much older) nor because of higher pension benefits (annual subsidies per pensioner are about the same in Greece as in Japan). It spends more because of easier and earlier eligibility for pensions.

So the outlook is gloomy. Even with greater productivity, even if governments can reduce unemployment and bring more women into the workforce, Europeans will have to stay in work for many more years. Even so, the workforce will decrease. So Europeans will have to rethink migration policies too.

* A correction to my post last night: the World Bank's map is sized according to all government spending, not just spending on social policies. The World Bank tells me the map would be even more distorted were it to focus only on public spending on health, education and welfare benefits.

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Skofnung

Does it make a difference whether it is public or private spending on social policies (education, health care, etc.)? Does it make a difference, from a macroeconomic point of view, if healthcare costs are paid for through taxes and social spending on through private insurance?

The US, with primarily private healthcare insurance, spends about twice as much of its GDP on healthcare than Sweden, with largely public healthcare funding. Given roughly equal overall quality, it seems the US, privately financed system, is hugely inefficient.

As societies get richer they typically spend more on social policies - healthcare, education, pensions, etc. The key question is not how such spending is financed - through private pension or public taxes - but how efficiently it can be carried out.

theomorph

1. BRAZIL PURSUES A SOCIAL-MARKET MODEL
Here’s a link to an opinion piece that The Economist ran in its “The World in 2012” special issue, written by Dilma Rousseff, the President of Brazil, at http://www.economist.com/node/21537004 . Rousseff's piece does not seem to enjoy much popularity in the blogosphere, because thus far it has gone uncommented on the Economist's website.
Even so, Rousseff's piece is a classic piece of political economy, filled with some very old, social-democratic truisms. I reference her piece here, because it explores issues similar to those addressed by the World Bank report that Charlemagne summarizes above. For instance, Ms. Rousseff writes:
“Debt accumulation is no substitute for rising wages, and market self-regulation is no substitute for government regulation…. Governments should allow markets to do what they do best: innovate and increase productivity. But governments should also work to avoid the instability and income inequality that result from unregulated markets. The market alone does not improve income distribution. Government action is needed.”
Ms. Rousseff goes on to argue that in recent years Brazil has become a much more middle-class society, as a consequence of deliberate political choice: “The recent improvement in Brazilian living standards and income distribution has been the result of a political decision to benefit poorer families.” And, she claims, that decision has not only yielded positive social and political results, but so too economic benefits, i.e. the development of a genuine domestic market of middle-class Brazilian consumers.
It is interesting that many developing countries, such as Brazil, now think one of their primary political tasks is to grow a vibrant, formally employed, well-paid middle class. Whereas in developed countries such as the United States, the middle class has been shrinking over the last few decades, and middle-class incomes have languished. It is now common knowledge that American middle-class consumption over the last few decades was fueled primarily by debt accumulation, and not rising real wages. And it is now common knowledge that almost all the gains from American productivity improvements over the last few decades have accrued to the top 1%, and even more markedly to the top 0.1 % of income-earners and asset-holders.
This article by Ms. Rousseff is an opinion piece, and does not cite references or supporting data. So it would be interesting to know if Brazil’s Gini coefficient – for decades, one of the world’s very worst – has improved significantly since Lula was elected in 2003. It is also clear that finding the optimal balance between middle-class consumption versus elite capital accumulation is never easy. The wealth accumulated in the hands of America’s top 0.1 % over the past few decades fueled a boom in super-toy industries such as yacht-construction. But it also fueled a vibrant American venture capital industry, of a sort that has few equivalents elsewhere. So getting the balance “right” is always a challenge; although one does suspect that the United States has erred too much on the side of elite accumulation.
2. THE WORLD BANK REPORT: THE SCANDINAVIAN MODEL
After all, Scandinavian countries and Germany have excellent Gini coefficients, and are much more middle-class societies than the United States, and yet they enjoy vibrant and innovative economies. In his blog above, Charlemagne summarizes the findings of the World Bank’s report, “Golden Growth: Restoring the Lustre of the European Economic Model” (see http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0,,contentMDK:... ). About half-way through his summary, Charlemagne writes:
“Northern European states, especially Nordic countries, show it is possible to innovate, raise productivity and maintain generous social welfare at the same time.”
Charlemagne then quotes the report’s list of reasons for Scandinavian/Germanic success: a business-friendly regulatory environment, favorable to entrepreneurship; university-industry partnerships and rigorous intellectual property regimes; generous government support for R & D; and a large supply of university-educated workers.

theomorph in reply to theomorph

I posted the first part of this comment again, because the "edit" button on Economist's system completely mangled my intended formatting.

A friendly word of advice: do all your formatting and spell-checking offline, in a standard word-processing program like Pages or Word. Only transfer your post to The Economist website after you are truly happy with it. The "edit" button on the TE website may appear to promise that you will be able to correct errors after posting. But in concrete practice, the "edit" button seems to function so poorly, that it's probably best to never use it. At least that's been my own experience.....

1. BRAZIL PURSUES A SOCIAL-MARKET MODEL

Here’s a link to an opinion piece that The Economist ran in its “The World in 2012” special issue, written by Dilma Rousseff, the President of Brazil, at http://www.economist.com/node/21537004 . This is a classic piece of political economy, filled with some very old social-democratic truisms, and explores issues similar to those addressed by the World Banks report that Charlemagne summarizes above.

For instance, Ms. Rousseff writes:

“Debt accumulation is no substitute for rising wages, and market self-regulation is no substitute for government regulation…. Governments should allow markets to do what they do best: innovate and increase productivity. But governments should also work to avoid the instability and income inequality that result from unregulated markets. The market alone does not improve income distribution. Government action is needed.”

Ms. Rousseff goes on to argue that in recent years Brazil has become a much more middle-class society, as a consequence of deliberate political choice: “The recent improvement in Brazilian living standards and income distribution has been the result of a political decision to benefit poorer families.” And, she claims, that decision has not only yielded positive social and political results, but so too economic benefits, i.e. the development of a genuine domestic market of middle-class Brazilian consumers.

It is interesting that many developing countries, such as Brazil, now think one of their primary political tasks is to grow a vibrant, formally employed, well-paid middle class. Whereas in developed countries such as the United States, the middle class has been shrinking over the last few decades, and middle-class incomes have languished. It is now common knowledge that American middle-class consumption over the last few decades was fueled primarily by debt accumulation, and not rising real wages. And it is now common knowledge that almost all the gains from American productivity improvements over the last few decades have accrued to the top 1%, and even more markedly to the top 0.1 % of income-earners and asset-holders.

This article by Ms. Rousseff is an opinion piece, and does not cite references or supporting data. So it would be interesting to know if Brazil’s Gini coefficient – for decades, one of the world’s very worst – has improved significantly since Lula was elected in 2003. It is also clear that finding the optimal balance between middle-class consumption versus elite capital accumulation is never easy. The wealth accumulated in the hands of America’s top 0.1 % over the past few decades fueled a boom in super-toy industries such as yacht-construction. But it also fueled a vibrant American venture capital industry, of a sort that has few equivalents elsewhere. So getting the balance “right” is always a challenge; although one does suspect that the United States has erred too much on the side of elite accumulation.

2. THE WORLD BANK REPORT: THE SCANDINAVIAN MODEL

After all, Scandinavian countries and Germany have excellent Gini coefficients, and are much more middle-class societies than the United States, and yet they enjoy vibrant and innovative economies. In his blog above, Charlemagne summarizes the findings of the World Bank’s report, “Gold Growth: Restoring the Lustre of the European Economic Model” (see http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/0,,contentMDK:... ). About half-way through his summary, Charlemagne writes:

“Northern European states, especially Nordic countries, show it is possible to innovate, raise productivity and maintain generous social welfare at the same time.”

Charlemagne then quotes the report’s list of reasons for Scandinavian/Germanic success: a business-friendly regulatory environment, favorable to entrepreneurship; university-industry partnerships and rigorous intellectual property regimes; generous government support for R & D; and a large supply of university-educated workers.

CONTINUED IN NEXT POST:

theomorph in reply to theomorph

CONTINUED FROM PREVIOUS POST:

In short, it seems evident that what Mediterranean countries in Europe need is not more American-style or UK-style neo-liberal “reform”. Rather, what they ultimately need is far-reaching, long-term sociological transformation along Scandinavian lines; for instance, long-term investment in tertiary education and R & D.

Anglophone media exhibit a tendency to frame the Eurozone debt crisis as judgment upon continental-European welfare states. The implicit Anglophone premise is that Eurozone countries currently in trouble should become more like the United States or the UK, with diminished welfare states and a shrinking middle class. The World Bank report, however, suggests something quite different: that in truth, these countries should become more like Scandinavia.

So one wonders: if Eurozone austerity measures accompanied by liberalizing reforms and proposals to promote growth were packaged instead as “the Scandinavian model”, might they be received more sympathetically in peripheral countries? At present, they seem packaged either as German diktats, or as “neo-liberal”, ideologically-driven, Anglo-American impositions. Whereas if, instead, peripheral countries could be convinced that over time they might – like the Scandinavians – have their cake and eat it, too (i.e. they could have dynamic economies coupled with generous welfare states), then public opinion might be more receptive.

On my own view, most Europeans want their countries to become more like Denmark and Sweden, and not more like the UK or the United States. So reform “packaging” that acknowledges as much seems likelier to win over disgruntled continental-European publics.

3. ECONOMIC DYNAMISM versus SOCIAL JUSTICE: A FALSE ANGLOPHONE TRADE-OFF?

Anglophones tend to just accept as given that there exists an unavoidable “trade-off” between economic dynamism versus social justice. Given that Charlemagne’s analysis above also seems to emphasize the economic costs of bloated European welfare states, one then wonders whether he shares this implicit Anglophonic premise?

Scandinavian success, however, and recent Brazilian success in creating a middle-class, suggest that perhaps this is a false premise. In its concluding chapter, the World Bank report again states:

“Europe’s most innovative economies show that economic dynamism need not be the price for more equal societies with attendant sizable governments. Finland and Sweden show that large governments can be run efficiently. Denmark, Germany and the Netherlands demonstrate that labor markets offering more security than those in the United States or East Asia need not be inflexible.” See http://siteresources.worldbank.org/ECAEXT/Resources/258598-1284061150155... .

On page 406 the World Bank report lauds Danish “flexicurity”, for instance, whereby losing one’s job in a liberalized job-market need not entail losing one’s income. The World Bank report even argues that “As European societies accept and act on the reality of aging populations and demographic decline, Europe’s appeal as a caring society will make it more competitive in the global market for talent.” Although I am sympathetic to the spirit behind this argument, even I find this last suggestion slightly preposterous. But it is interesting that the World Bank should make such an argument.

Of course, the World Bank report also promotes standard neo-liberal remedies, like reducing public debt, reforming social security, liberalizing labor markets, and rethinking immigration policies. But the World Bank report promotes all these remedies while simultaneously demonstrating sympathy for the European social-market model, a model that also values justice and equity, and not just economic dynamism. In short, the World Bank report on Europe is a subtle, nuanced document, and as Charlemagne suggests, well worth reading.

********************************************

It is an interesting “sign of the times” that one needs to turn to an opinion piece penned by a developing-world politician, or to a World Bank report, to read some good, old-fashioned, social-democratic common-sense……

pedrolx2

To sanmartinian,

I am unsure of whether you are going to read this.

I will not have time to give you a lengthy reply. It's my last night in Vienna, and a good friend of mine from Germany just joined us and we have a great dinner ahead of us.

Anyway, here go some more random thoughts on the recent rally in Portuguese Bank shares:

a) Portuguese balance of trade, diminished by ONE HALF in ONE YEAR

http://online.wsj.com/article/BT-CO-20120209-706127.html

this is one outstanding feat. I am actually unsure whether it's been done before in Europe in peace time periods.

b) Countries like Oman, China, Brazil and Angola have all seem to have gathered up and are propping up the country a bit. Will not go into further detail and will let the reader find out for themselves. Curiously all these nations have had commercial contacts with Portugal for iver 500 years. Muscat was in fact a Portuguese outpost for over a century. Bless our past .

c) Banks: BCP shares especially were being mostly transactioned by day traders . BCP has changed strategy, in part related to what said above. BES and Caixa were never a real problem. BPI seems to have found a great strategy as well. This, mixed with the fact that day trading (short selling etc) wasn't profitable anymore may have turned this around a bit.

d) we're not off the hook yet, still lots to be done, but I am pleased with recent news.

theomorph

I really liked this comment recently posted by "WWerle" in the "Will Europe Survive 2012 Intact" discussion. So I simply reposted it here.

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Greece's bankruptcy, restructuring private and public debt, allowing the country to remain in the Eurozone accepting a sort of EU Marshall Plan to restart its economy, would be a clear signal to markets that Europe is showing finally its determination to find a solution to its unresolved main problem which originated the European debt crisis. Ireland and Portugal are complying quite well with the agreed reforms and Italy and Spain initiated not only necessary austerity measures but also programmes to create jobs and growth, supported by the EU Commission redirecting available funds. Eurozone's EFSF whose unused funds of about €250 Billion might be added to the permanent €500 Billion ESM jointly with the planned $1 Trillion IMF bailout facility would constitute a reasonable firewall to protect debt crisis nations. In addition China's economic interdependence with Europe and its increasing interest in a new monetary system, integrated by a basket of currencies, including the Euro, substituting the leading role of the Dollar, should contribute to a survival and a stronger Euro overcoming within a stronger and deeper European integration remaining problems.

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theomorph

@EmmaFinney, Marie-Claude, Forlana, Viva, Pumpernickel, Junior, Enlisted, Josh, Joe, et al,

The following is a post originally intended for the “Will Europe Survive 2012 Intact” discussion. That discussion has now been closed. This seemed as good a place as any to put my response to EmmaFinney. Personally, I very much like this particular notebook-article of Charlemange’s.

The following post is also relevant to this discussion, because it speaks to a major problem in Europe, namely, labor mobility. As a number of economists have noted, American Federal currency union has only worked because of a high degree of labor mobility. America is prepared to allow whole regions to de-industrialize and de-populate, their inhabitants moving elsewhere to find work. Whereas in Europe, linguistic barriers have been a significant contributing factor to labor immobility. However, within our lifetimes, the advent of genuinely adequate, simultaneous MT (machine translation), will change everything for Europe, including labor immobility.

This post responds to the last item posted by EmmaFinney on “Will Europe Survive 2012 Intact”. There Emma wrote:

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It appears that some are so resentful, envious, and jealous of the supremacy of the current world's lingua franca [English] that they indulge in wishful thinking that English will lose its top status.
Not likely with millions of Chinese studying English. And with millions of English speaking Indians, English will remain the world's lingua franca notwithstanding the wishful thinking of some whose animus towards the anglos is so great that logic, reason and rational thinking desert them.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Here is my response:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Hi Emma,

Reductively psychologizing a position that you do not agree with, is perhaps the weakest and least intellectually demanding form of counter-argument.

Did you actually take the time and trouble to read the Amazon reviews of Nicolas Ostler's book? Again, please see http://www.amazon.com/Last-Lingua-Franca-English-Return/dp/0802717713 . Do you even know who Ostler is? He is a British linguist, not a French or German or Arabic linguist. How quickly do you read posts? When responding, don't you think you have at least a minimal obligation to first understand what a person wrote?

In the post to which you are referring, I made it quite clear that I do recognize Europe's "linguistic balkanization" – Europe’s linguistic divisions -- as a major barrier to integration. I suggested, however, that the technology of simultaneous machine-translation is advancing so quickly, that within 30 years anybody on earth will be able to understand anybody else on earth, with a simple ear-piece. You might talk to me in Arabic (for instance), and my earpiece will immediately translate your words into English. Technology has been replacing humans in a wide range of fields, so why should natural-language translation be immune? Sure, machine translation (or "MT" for short) will probably need longer to translate fiction effectively, i.e. prose where words are carefully chosen, not just for meaning, but for sound, poetic connotation, etc. But for ordinary use in everyday life, MT will do just fine.

My posts are often overly long. But given your complete mis-reading of my argument, I now realize that going too swiftly, and writing in "short-hand" on this blog, is also sometimes a mistake. To read further about Ostler's argument, please see the following reviews of his book at http://www.guardian.co.uk/books/2010/dec/04/last-lingua-franca-ostler-re... , http://www.guardian.co.uk/technology/2010/oct/31/nicholas-ostler-my-brig... , http://www.ft.com/cms/s/2/b6f38cd8-e2e0-11df-9735-00144feabdc0.html , http://www.independent.co.uk/arts-entertainment/books/reviews/the-last-l... , http://www.economist.com/node/17730434 , http://www.translationautomation.com/perspectives/mt-the-new-lingua-fran... , http://online.wsj.com/article/SB1000142405274870360920457564106078048105... , and http://www.tnr.com/book/review/tongues-twisted . If you were to take the time to read these reviews (they are all quite short), you will understand that I was speaking about the medium-term future, and not about the present.

CONTINUED IN NEXT POST

theomorph in reply to theomorph

CONTINUED FROM PREVIOUS POST

30 years from now, machine translation technology will radically change European possibilities. Europe will still speak multiple languages, to be sure, but every European, everywhere, will be able to immediately understand every other European. Europeans will then be able to preserve their local cultures, and even their local dialects. Suppressed or dying languages such as Welsh in Wales, or Occitan in southern France, might enjoy a serious revival. And yet, because of machine-translation technology, pan-European businesses whose employees come from multiple countries will become every bit as “efficient” as Anglophone-only businesses, in which everyone speaks English.

Yes, I know it probably hurt when I suggested that the world-wide ESL industry just will collapse. But do you think that professionals who teach languages are (or should be) metaphysically immune to technological replacement? Do you think that automation should only replace the the brunt physical labor of industrial workers? Whereas the business of natural language acquisition -- a dreary, monotonous, time-consuming chore if there ever was one (I speak from experience) -- should remain somehow immune?

Enjoy the Imperial afterglow while it lasts. But as Ostler suggests, English just will be the “last lingua franca”, and NOT because English will triumph über alles. Rather, because computer technology will.

theomorph in reply to theomorph

A FEW QUALIFICATIONS TO THE ABOVE:

Given just how much MT might contribute to completely changing political, social, and economic dynamics within Europe, I wonder whether Brussels has seen fit to invest in MT. Perhaps not, because Brussels employs a small army of translators, and genuinely adequate simultaneous MT will undermine those jobs. So, if anything, one might expect entrenched Brussels bureaucrats to demonstrate Luddite opposition to MT .

Even still, entrenched type-setters were unable to stop the advent of programs like Quark and InDesign, which revolutionized page-layout, advertising, and publishing. It was trained publishing people who first developed the programs that put their colleagues out of work. Analogously, there should exist enough "sell-out" translators willing to put other translators out of work.

Some translators will still have jobs. For instance, we will still need trained translators to perfect MT at the concrete, practical level in a given set of languages (e.g. English to French, and vice-versa). Here I am drawing a distinction between the translators, versus the programmers continually working to perfect the algorithms that drive the translation engines. Furthermore, natural languages evolve over time, so one can imagine that any set of English/French translation algorithms will need to be continuously modified, to capture new vocabulary and usage, and even new structure. So we will probably need to maintain a much smaller set of human translators, to constantly "tweak" the translation software with updates.

But even still, the vast majority of people will no longer "need" to learn English -- or any other foreign language for that matter -- except for purely aesthetic, literary, or poetical reasons. To be sure, once one has gone through the trouble of mastering another language, it will always remain very satisfying to read literature or poetry in the original. But that is not the reason millions worldwide currently take courses at ESL language schools like the "Wall Street Institute".

Millions worldwide are not learning English to read Jane Austen, or enjoy the supposed cultural riches of the Anglosphere. Rather, they are learning English to read The Economist, and other more “pragmatic” sources of information. They are learning English to gain access to very specific, pragmatic forms of cultural capital, e.g. scientific and social-scientific journals. They are learning English so as to participate more effectively in Global Capitalism.

Last but not least, they are NOT learning English because they “believe in” or admire the Anglosphere at a cultural or political level. Take a poll at any ESL language school or institute located outside the Anglosphere, and ask the students how many of them are anti-American. My guess is that at least 80 % of the hands will go up – even though these same students are studying English. I have in fact taken such polls, and almost always more than 90 % of the hands went up.

theomorph in reply to theomorph

SOME ADDITIONAL POINTS:

1. First, it’s simply obvious that English, as the native “first language” of roughly 330 million people, will survive.

What is being debated here, however, is whether English will continue to function as a global lingua franca, once MT (machine translation) becomes really good. As the Economist wrote, in its review of Ostler’s book (see http://www.economist.com/node/17730434 ):

“English is expanding as a lingua-franca but not as a mother tongue. More than 1 billion people speak English worldwide but only about 330m of them as a first language, and this population is not spreading. The future of English is in the hands of countries outside the core Anglophone group. Will they always learn English?”

Emma cited the Indian case. However, in former British colonies where English serves as a language of national unity, it is an open question whether English can survive the advent of really good MT. Although India cannot declare Hindi a national language (Hindi speakers comprise only 40 % of India’s population), Indian “Hindutva” nationalism is alive and well, and could theoretically rally around “anti-English”. Once really good, cheap MT becomes available, India’s various linguistic communities (Hindi, Bengali, Marathi, Tamil, Telugu, Urdu, etc.) will no longer need English to communicate with each other. Nor will they need Hindi instead to communicate with each other. Indeed, once really good MT becomes available, India’s need for a “language of national unity” – in effect, an intra-Indian lingua-franca – will disappear.

At that point, English will survive in India to the extent that it continues to be used, taught, and learnt as a natural language, by a large enough population. That’s really the question, as regards the survival of English in India. India’s elite speaks English quite fluently, and raises its children either primarily in English, or in English alongside a local language. By way of contrast, most non-elite Indians learn English only through school. Now granted, India’s burgeoning middle-class is becoming more proficient at English as well. So the question then becomes, “How natural or ‘native’ will English prove, circa 2040 - 2050, for what proportion of India’s elite and middle class?”

Similar questions apply to other former British colonies such as Nigeria, where again English functions as an official lingua-franca of national unity, and is spoken fluently by the elite, but is not widely spoken in rural areas.

As for the rest of the world’s inhabitants: Will they continue slogging through ESL courses, just for the fun of it?

Those for whom languages come easily, or who have a vested interest in the worldwide ESL industry, will wax poetical about the value of mastering multiple languages. And to be sure, there is some evidence that bilingual or trilingual brains are more adaptive, creative, intelligent, etc. etc. But like all things, language-learning entails opportunity costs. 13-year-olds who spend hundreds of curricular hours per annum in ESL classes, are NOT spending those hours further mastering Math, Science, Art, or Ballet – or the complex matter of writing prose essays in their original mother tongue. As any experienced educator knows, the one absolutely finite resource is always Time: there are never enough hours in the day to satisfy all worthwhile pedagogical agendas. So once really good MT becomes available, it seems hard to believe that school systems worldwide will continue spending huge sums, forcing millions of children to rote-learn the global lingua franca, when money and time might better be devoted elsewhere.

In short, if elites in former colonies/Commonwealth countries such as India or Nigeria see no reason to maintain linguistic ties with the Anglosphere, then the common, everyday usage of English just will shrink, to the “core” countries of the Anglosphere, namely, the United States, the UK, Ireland, Canada, Australia, New Zealand, and perhaps South Africa – see http://en.wikipedia.org/wiki/Anglosphere .

CONTINUED IN NEXT POST

theomorph in reply to theomorph

CONTINUED FROM PREVIOUS POST

2. Second – and this perhaps an even more important point – the advent of really good MT will have similar consequences for “Francophonie”, the world of French-speaking countries – see http://en.wikipedia.org/wiki/Francophonie . Any need for French to serve as a “lingua franca” within its traditional orbit will also disappear.

So the above argument is not necessarily an anti-Anglophonic argument. It is simply the observation that the world is about to enter a very different era, linguistically speaking: an era in which ALL lingua-francas will become sociologically and politically obsolete. In effect, the advent of really good MT is an “equal opportunity solvent”, one that promises to undermine all forms of linguistic hegemony, not just the hegemony of English.

Now the above probably “seems” to be an anti-Anglophonic argument, because native-speaking Anglophones currently enjoy some rather exceptional linguistic privileges and comparative advantages. For instance, easy access to all cultural capital produced in English; or, the opportunity to ride the afterglow of Anglo-American imperial hegemony, travelling the world as ESL teachers; or, freedom from the burden of slogging through ESL classes, with the time saved then available to master other skills.

Indeed, not just Anglophonic individuals – qua individuals – enjoy comparative advantages because they speak a “big” language, But, so too, whole industries. No doubt articles have been written vis-à-vis the comparative advantage Hollywood enjoys because it creates films for a huge “domestic” (i.e. Anglospheric) market, one that is at least 4 times larger than any equivalent European linguistic bloc (save, perhaps, the Spanish). Hence, Hollywood can spend 4 times as much on writers, actors, directors, production values, and CGI, and still break even. So is it any wonder that Hollywood’s products dominate Europe? Traditional economics, supplemented by the most rudimentary knowledge of linguistic demography, would predict as much.

The argument above, in short, only “seems” anti-Anglophonic, because Anglophonic individuals and industries currently enjoy an extraordinary degree of linguistic privilege. But again, the advent of really good MT threatens to radically undermine the privileges and comparative advantages of ALL imperialistic or hegemonic languages.

English speakers and English-language-dependent industries, however, will probably feel the "negative" impact of MT's advent the most.

theomorph in reply to theomorph

ANOTHER ADDENDUM:

Those interested in this topic should see the blog-comments to The Economist’s review of Ostler’s book, at http://www.economist.com/node/17730434/comments#comments . These comments often make for very interesting reading. The next two posts provide a summary, and a response.

1. First off, these comments suggest that careful scholarship does not necessarily win votes on blogs. The post in which “MaryJ” simply asserts, in a non-reflective way, that native English speakers must number at least 400 million, gets 179 votes. Whereas the much more careful, scholarly posts in rebuttal to “MaryJ” -- posts that suggest, “Hey, look, 330 million is probably a fair and justifiable figure” -- receive fewer votes.

Furthermore, as one reads through the comments, it soon becomes apparent that many of the most valuable contributions received only 3 or 4 votes, and not 179.

2. Second, these comments suggest that many (although thankfully not most) Economist bloggers are rather prosaic, banal thinkers, lacking even the most rudimentary social and technological imagination.

Most of those who object to Ostler’s argument do so by citing their personal, direct, “lived experience” . For instance, they will cite the status-symbol, snob-appeal that English currently enjoys amongst business elites. Or they will cite enthusiasm for English amongst children in some countries. Or that workers from different countries currently use English to communicate. Or that the current global labor-market favors those who have mastered English. Such unimaginative counter-arguments are quite specious and misleading, and ultimately inconsequential. None of them actually responds to Ostler’s argument, and such bloggers signally fail to understand Ostler’s line of reasoning. Like Emma quoted above, they simply fail to appreciate that Ostler’s argument is a textbook example of medium-term futurology.

3. Once again, Ostler is imagining what might happen in the medium-term, if really good, easy-to-use and cheap MT were to become widely available: a 2050 version of Star Trek’s “universal translator”.

Furthermore, one should note that by 2050 the universal translator will probably NOT be an earpiece – no matter how light and unobtrusive – but rather, a chip-implant. You won’t have to keep track of the location of your earpiece, or go through the time-consuming process of asking google to translate “Danger”. An Arabic-speaker will scream “Danger!” (in Arabic), and your universal-translator chip-implant will instantly shout “Danger!” in English. You will get the message in a split-second.

Now granted, one does wonder what the actual “experience” of face-to-face communication will become. Will you still hear a foreign language in one ear, while the chip-implant translates in the other? Will people prefer that? Or will people prefer that translation be fully switched “on” for both ears? So that, in effect, whenever you visit a foreign country whose language you do not speak, you will hear all oral communication instantaneously “dubbed” into your native tongue?

For instance, with both ears switched on for translation, you won’t hear the taxi-driver talking to you in German, but rather, only in English. This in itself might be rather off-putting, because the sounds you hear will not match lip-movement. But presumably, the gain you achieve in comprehension will more than compensate for the lack of aesthetic, visual/aural “fit”.

Pursuing this aesthetic line of inquiry further, supplemental questions emerge. Will the particular rhythm, inflection, tone, timbre, pitch, etc. of the taxi-driver’s voice survive the translation process, so that only the actual content of what he/she is saying gets “translated”, with the sound and other aesthetic properties of his/her voice preserved intact? (See http://en.wikipedia.org/wiki/Voice_therapy_(transgender) on the challenge of trans-gender voice therapy, to gain some appreciation for this problem). Note that if a universal translator were unable to adapt aesthetically in this way, you could find yourself in a group of foreigners, all of their unique voices translated into the same unisex machine-monotone, albeit in your native language. You would then get horribly confused as regards who was saying what, at any given moment.

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theomorph in reply to theomorph

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In short, aesthetic concerns such as the preservation of unique voice signatures could prove quite practical after all. Apropos this challenge, the blogger named "Hibro" quotes from an interesting article at http://link.cs.cmu.edu/article.php?a=456 :

“Meetings and phone conversations are particularly nasty [translation situations] because they are particularly disfluent,” Waibel says. "People interrupt each other, for example.”

So any truly adequate universal translator will have to handle the linguistically demanding context of the multi-speaker business meeting, before Ostler’s thesis might come to pass.

4. The above line of thinking was inspired by “Reeshar France’s” post:

“Translation software will become more and more useful, that's for sure. But ask any UN official, EU bureaucrat or manager of a multinational if they would prefer to communicate face to face with their peers using a lingua franca or via the world's best interpreter and the common language - even when not completely mastered by either party - will win hands down.
Political and business elites, for at least as long as they are made up of humans and not machines, will always make the effort to learn a common language in order to communicate.”

I do not agree with “Reeshar France”, and I think really good MT in the form of a chip-implant just will represent a powerful, attractive alternative to "common-language communication". But still, at the very least “Reeshar France” understands Ostler’s argument, and responds with an appropriately calibrated counter-argument. “D. Sherman” makes a similar argument, also worth taking seriously.

5. Almost all blog-comments focus on language comprehension, and hence, hearing. But what about speaking?

If you think about it, if everyone has chip-implants for hearing, then nobody needs voice-box add-ons for speaking. The “burden of translation” will always fall on the hearer, i.e. on the hearer’s universal-translator chip-implant.

But for cultural or political reasons, some speakers might prefer to assume the translation burden themselves, and will want to speak to others directly in their native languages, without having to learn those languages. So perhaps there might emerge a subsidiary market in voice-box implants or add-ons: implants that allow one to think a sentence (say) in French, but one’s voice box speaks the sentence in Chinese.

Of course, at any number of levels this seems far more technologically challenging than the creation of universal-translator chip-implants for hearing. The asymmetry seemed worth noting.

6. By far the worst counter-arguments against Ostler's thesis are by bloggers who simply restate conventional wisdom, i.e. that it is quite unlikely that any other language will overtake English as the global Lingua Franca.

Once again, Ostler does NOT make the argument that another language such as Chinese, Spanish, or Esperanto will or even “should” overtake English as global Lingua Franca. Rather, Ostler’s argument is far more interesting and original: an argument to the effect that the era of “Lingua Francas”, plural -- Lingua Francas of any kind -- is coming to an end, and soon. English just happens to be the global Lingua Franca currently in use worldwide, when really good MT finally arrives circa 2040 to 2050. But if French were the current linguistic hegemon, then Ostler’s argument would apply equally well to French.

And indeed, to the extent that French is still a linguistic hegemon, of sorts, within its traditional orbit of influence described as “Francophonie”, Ostler’s argument will in fact apply to French, too.

7. The blog-comments that dogmatically insist that English is one of the easier languages to learn are also a bit irritating.

English is chock-a-bloc with idiomatic expressions and grammatical exceptions; word-endings in English are minimally inflected, so often the only thing that signals word function in English is word position; English pronunciation often fails to follow spelling in a standardized way, so written English is closer to Chinese ideograms than many might admit; and so on.

In other words, English is not Spanish. Let’s face it, English is a hybrid-mongrel mish-mash of Indo-European tongues. English is a Germanic language that has lost a great deal of German’s logical structure, and English has borrowed heavily from the Romance languages, without importing their elegance and transparency.

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theomorph in reply to theomorph

CONTINUED FROM PREVIOUS POST (turns out I needed 3 posts instead of just 2…)

8. In addition to those already mentioned above, the following blog-comments are also worth reading.

Those by: "carols lusitanus" (who writes like a student and/or scholar of linguistics), "strange_division", "Snarkibartfast", "nkab" (who makes some interesting observations re computer language kernels, and pidgin Englishes), "DAULATRAM" (whose linguistic proficiency I envy!), "Rafael11" , "Michael Dunne", "Felipe Coelho" and "pedrolx" (informative posts from both, as always), "kitsune2275" (for interesting, precise, and true observations vis-à-vis Japanese), "VMLM" , "OntarioCanada", "Kirsty Y", "Michael Dunne" (fascinating observations re Wall-street’s use of computers in natural-language processing), "samjfung" (eventually Math will rule!), "Sydney Guy", "J.Sparrow", "AtlantisKing", "MIchaelTheGringo", "Damianos1", and "CultureWizard".

All of these bloggers at least understand Ostler’s argument, and respond accordingly. So too, the posts that illuminate the actual state of ESL in China and Japan – where efforts to teach English have proven an abysmal failure – are also revealing.

9. Note that one post – by unwalla – suggests that really good MT or Star Trek’s “universal translator” might be closer to market than Ostler predicts – see http://research.microsoft.com/en-us/projects/mt/ . In effect, Unwalla claims that Ostler is too technologically conservative. On unwalla's line of argument, English will not disappear as a global lingua franca circa 2050, but perhaps as early as 2030 or 2040.

My own estimation is 30 years, and not Ostler's more conservative 40 years.

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10. All of this is relevant to Charlemagne’s column, of course, because linguistic balkanization has always been the Achilles heal of the European project.

As far as I know, no articles have yet been written that explore at length what the advent of really good MT might mean for European integration, and the long-term success of the European Union. Europe spends millions or perhaps even billions on translators, language-exchange programs, and language education in general. Log on to almost any Brussels website, and the "challenge" of Europe's multi-linguality is apparent on every page.

theomorph in reply to theomorph

AN UPDATE re EUROPE and MACHINE TRANSLATION

Apparently Europe did fund an ambitious Machine Translation project from the late 1970’s until 1994, called “EUROTRA”, but the project failed to deliver a working MT system. Europe’s need for high-volume MT still exists, and if anything has only intensified, now that the EU speaks 23 official languages and counting.

I had failed to appreciate the shear size of Europe’s translation problem until I read the Wikipedia article at http://en.wikipedia.org/wiki/Eurotra . The problem was and still is combinatorial. Even back in the 1980’s, “As more countries joined, this produced a combinatorial explosion in the number of language pairs involved, and the need to translate every paper, speech and even set of meeting minutes produced by the EU into the other eight languages meant that translation rapidly became the overwhelming component in the administrative budget.” In other words, the shear magnitude of the problem the EU faces has trumped any possible Luddite stonewalling.

Brussels has not given up: one recent effort is called “EuroMatrix Plus”, and the motivation remains the same – see http://cordis.europa.eu/fp7/ict/language-technologies/project-euromatrix... , http://www.eamt.org/projects.php , http://babelport.com/news/2011 , and http://www.euromatrixplus.net/ . This time, researchers will investigate “Statistical Machine Translation” and “Hybrid Machine Translation”, the latter a fusion of the Statistical approach (now the most-researched), with the earlier, Rule-based approach. If you are interested in reading further about MT, see http://en.wikipedia.org/wiki/History_of_machine_translation ,
http://en.wikipedia.org/wiki/Machine_translation , http://en.wikipedia.org/wiki/Statistical_machine_translation , http://en.wikipedia.org/wiki/Example-based_machine_translation , http://en.wikipedia.org/wiki/Rule-based_machine_translation , and http://en.wikipedia.org/wiki/Dictionary-based_machine_translation .

Searching The Economist for articles on Machine Translation, I found an old one from 2002, at http://www.economist.com/node/1020823 , and two more recent ones at http://www.economist.com/node/15582327 and http://www.economist.com/blogs/babbage/2011/11/artificial-intelligence . The first two articles explore the ways in which the Internet has facilitated the development of Machine Translation, and subtly nuanced our expectations of the technology. Some of the more sophisticated translation services, for instance, are now web-based companies where MT produces first drafts, drafts then farmed out to human translators, thereby combining the MT's cheap efficiency with human finesse, and delivering quality translations at more affordable prices.

The last piece is the most arresting of the bunch. It discusses how “machine-learning, language-translation, and speech- and pattern-recognition software” technologies are rendering whole swathes of middle-income, knowledge-worker jobs obsolete. Furthermore, it argues that the productivity gains these technologies generate outstrip consumption by a wide margin. As such, the Luddite fallacy is perhaps no longer a fallacy, and many or even most of the jobs lost during the “Great Recession” will never return, nor will they be replaced by scores of newer, more “high-tech” jobs.

A fascinating (and frightening) argument, but a bit beyond the scope of this particular thread, which I intended as a dedicated exploration of Machine Translation and the role it might play in facilitating European integration.

theomorph in reply to theomorph

1. ESPERANTO, and the problem of LINGUISTIC IMPERIALISM

Here is a fascinating YouTube video by a former UN translator, Claude Piron, that makes the case for “Esperanto”: http://www.youtube.com/watch?gl=GB&hl=en-GB&v=_YHALnLV9XU . Piron comes across as a very sympathetic, grounded, and common-sensical character. He is no ideologically militant “nut”. Piron has also worked for the WHO, and for 20 years was a professor of psychotherapy at the University of Geneva – see http://en.wikipedia.org/wiki/Claude_Piron .

Piron’s principle argument is that English simply fails to meet the requirements of an international “common language of communication”. Although English may seem currently dominant, only 5 % of the world’s population speaks English as a native language, and only an additional 5 % speaks English with some degree of fluency as a second language. In Europe, 90 % of the population still cannot use English as a medium of international communication, even though most Europeans – including the older ones – studied English in school for 6 or 7 years, for 4 or 5 hours a week.

Piron’s central point is that English is a b**ch to learn. Teaching methods and teachers are not the problem, but rather, the language itself. Piron argues that one can reach a good level of communicative competence in Esperanto after 6 months, a level that one still will not have achieved in any other language (including English) after 6 years. Esperanto, as such, is “cost-effective”, vis-à-vis the primary cost of learning any language, which is Time. But Time is also money, and Piron estimates that the European Union could save 25 billion dollars a year, if it were to abandon teaching English as the language of inter-cultural communication, and were to teach Esperanto instead.

Piron also makes the important point that Esperanto “levels the cultural playing field”. In Esperanto one never feels embarrassed or inferior because one’s competence does not approximate the Queen’s English, and Esperanto’s structural flexibility allows one to form sentences in a way that comes naturally, as per one’s mother tongue. That English implicitly carries within it various subtly coercive agendas – philosophical, political, cultural, sociological, and of course grammatical – is something that native speakers seldom consider. But anyone who tries to master English as a second language constantly “feels” these coercive agendas. For many, trying to master English late in life (i.e. after age 11 or 12), is like joining a game of “Monopoly” ¾ of the way through, after all the prime real-estate has been bought up. It’s a game you are bound to lose.

Sure, there are those who learn English because they proactively want to join the Anglosphere, and strongly identify with the cultures and values of English-speakers. But for the majority, learning English as a second language is a quasi-masochistic exercise in suborning one’s identity to the current hegemon. Learning English feels like self-betrayal. See http://en.wikipedia.org/wiki/English_as_a_lingua_franca and http://en.wikipedia.org/wiki/Linguistic_imperialism , and see especially the work of the linguist Robert Phillipson, on the topic of “Linguistic Imperialism”, at http://en.wikipedia.org/wiki/Robert_Phillipson , http://www.cbs.dk/en/Research/Departments-Centres/Institutter/ISV/Menu/S... , http://www.amazon.co.uk/Linguistic-Imperialism-Oxford-Applied-Linguistic... , and http://www.youtube.com/watch?v=c3TJe4jnqFo . The only possible consolation is that, now that so many people worldwide are learning and using English as a second language, cultural “control” of English is slipping away from traditional core-countries like the U.S. and UK, and English is morphing in myriad ways – see for instance http://www.economist.com/node/8418152 , http://en.wikipedia.org/wiki/World_Englishes , http://www.southampton.ac.uk/cge/ , and http://en.wikipedia.org/wiki/English-based_creole_languages .

I don’t know a word of Esperanto. But after having spent too many hours, correcting the absolutely wretched English prose of too many essays written by otherwise very intelligent, hard-working ESL students, I am now profoundly “open to alternatives”. Esperanto, Machine Translation, or perhaps even an English-competence “chip implant”: I am willing to consider just about anything, as an alternative to the worldwide ESL industry.

The planet obviously does need a common medium of intercultural communication, and Europe especially so. But ordinary, school-taught English just doesn’t cut it.

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theomorph in reply to theomorph

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Hell-on-earth, for me, would be spending the rest of my life trying to teach very intelligent, hard-working, non-native-speaking university students how to write competent philosophical essays in English. Thankfully that job now falls to someone else – or rather, a succession of someone-elses, because nobody lasts in the position for more than a year or two, before they quit. As the most recent sacrificial victim put it, after tendering his resignation, “I would rather flip hamburgers at MacDonalds, than spend another year teaching Philosophy to ESL students.”

I am sure that happy, satisfied, committed, and competent ESL teachers do exist, somewhere. But personally, I have never met any.

2. EU TRANSLATION AND INTERPRETATION

According to the following Economist article, the EU spends 1.4 billion per annum on translation and interpretation, and translates 1.3 million pages of text per annum, which would seem to work out to 1,000 EU per page! Except that the figure of 1.4 billion also includes interpretation of 11,000 meetings per annum – see http://www.economist.com/node/8417988 .

In Brussels, the Directorate General for Interpretation handless the meetings of the European Commission, via a combination of permanent and freelance interpreters (see http://ec.europa.eu/dgs/scic/about-dg-interpretation/index_en.htm ), while the Directorate General for Translation handles the documents produced by the Commission (see http://ec.europa.eu/dgs/translation/whoweare/index_en.htm ). The European Parliament also employs an additional 700 translators (see http://www.europarl.europa.eu/parliament/public/staticDisplay.do?id=155&... ), and like the Commission, the Parliament also employs a combination of permanent and freelance interpreters (see http://www.europarl.europa.eu/parliament/public/staticDisplay.do?id=155&... ). And then there’s the European Court of Justice – see http://curia.europa.eu/jcms/jcms/Jo2_12357/ . For more information about interpreting for the EU, and its demands, see http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+IM-PRES... and http://europa.eu/interpretation/index_en.htm .

Given the per-annum price-tag of EU translation and interpretation – 1.4 billion – the sum of just 2.5 million Euro for EuroMatrix MT research (which took place circa 2006 to 2009), seems paltry by comparison – see http://www.euromatrix.net/ and http://babelport.com/news/2011 .

It would take time to research and tally the figures, but it would be very interesting to find out just how many translators and interpreters the various EU institutions combined employ full-time, in total; how many they employ on any given “average” day (i.e. full-time + freelance combined); how much translation costs the EU, on average, per page; and how much interpretation costs the EU, on average, per hour. And it would be interesting to compare such figures to the current total amount that the EU – as well as EU national governments – currently spend on MT research and development. No doubt the EU has undertaken or is currently funding many other MT initiatives, aside from EUROTRA and EuroMatrix…..?

3. TRANSLATORS SKEPTICAL OF MT

For comments by Economist readers – it would seem, many of them professional translators – in response to the 2010 Economist article that focused on Machine Translation and the Internet (see http://www.economist.com/node/15582327 ), go to http://www.economist.com/node/15582327/comments#comments . Most of these comments are very skeptical of MT. But, as many of them personally disclose, they have a vested interest as translators in being skeptical of software that threatens to undermine their livelihood.

Dave Miller

http://thebottomline-us.blogspot.com/2012/02/divergent-union-part-1-what... If you're worried about the implications of a Greece default, read this post by The Bottom Line. The first in a series discussing the European sovereign debt crisis--and why it impacts you.

theomorph in reply to Dave Miller

Hi David,

The blog you referenced pays homage to John Maudlin, and his book, "ENDGAME: THE END OF THE DEBT SUPERCYCLE AND HOW IT CHANGES EVERYTHING", at http://www.amazon.com/Endgame-Debt-Supercycle-Changes-Everything/dp/1118... . Are you familiar with Maudlin's book?

If you are familiar with Mauldin's book, in what way is Maudlin's concept of a "debt super cycle" the same as, or different from, a Kondatriev cycle? Does Maudlin reference Kondatriev wave theory in his book?

A friend of mine sparked my interest in Kondratriev Wave theory, because it would seem to "explain" current events to some extent, from more of a bird's-eye perspective. Please see some of the stuff that I wrote at the very end of a thread begun by “pierre a v”, on the “Will the Euro Survive 2012 Intact” discussion forum. The thread in question is very easy to find, because the post that began the thread, by “pierre a v”, is the only post he has ever made on the Economist website. If you go to the following link -- http://www.economist.com/economist-asks/will-euro-survive-2012-intact?pa... -- and then scroll down until nearer to the bottom of the page, you should come across the thread begun by “pierre a v”. The discussion is now closed in that particular forum, so the link should work, and the page should be stable, as described. Once you’ve found the thread begun by “pierre a v”, click on the button “Expand 34 more replies”, and scroll nearer to the bottom of that, to see the exchange between myself, “Sanmartinian”, and “Felipe Coelho”. The thread ends with some nice words from "TheZenRoom", expressing appreciation for more intellectually substantive reflection.

The reason I bring up Kondatriev Wave theory is rather simple: if there is any merit whatsoever to the theory, then the timing of the EURO’s introduction could not have been worse. The Euro was introduced right at the beginning of a Kondatriev Winter, when economic conditions are wretched. But it’s only a theory, and an extraordinarily general one at that.

Here I will just repost my particular contributions as follows. But again, do look up the thread, to see the full “flow” of the exchange.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

theomorph in reply to sanmartinian, January 31st, 11:12

ABOUT KONDATRIEV WAVE THEORY:

Both you and Felipe seem to be interested in Economic History, and the "big picture", so I was wondering whether either of you had ever heard of Kondatriev Wave theory. And, if you have, what you think of it?

I won’t summarize Kondatriev Wave theory here, because the Wikipedia articles provide perfectly good introductions – see http://en.wikipedia.org/wiki/Nikolai_Kondratiev , http://en.wikipedia.org/wiki/Kondratiev_wave , and http://en.wikipedia.org/wiki/Grand_supercycle . The most important academic website on Kondatriev Wave theory would seem to be located at the University of Washington – see http://faculty.washington.edu/krumme/207/development/longwaves.html , and the following webpages are also more academic in orientation: http://faculty.washington.edu/modelski/IPEKWAVE.html ,
http://aix1.uottawa.ca/~rroberge/berryk.htm , http://www.lewrockwell.com/rothbard/rothbard44.html . However, as one might expect, Kondatriev Wave theory is controversial, and many "mainstream" economists question the value of such a too-general and ultra-long-term theory. Kondatriev Wave theory most definitely falls under the heading, “heterodox economics” -- see http://en.wikipedia.org/wiki/Heterodox_economics , http://hetecon.net/ , and http://www.economicsnetwork.ac.uk/heterodox . And see especially a fascinating piece in the Economist on the effect that blogging has had on economic debate, and the whole question of epistemological authority within the Economics profession, at http://www.economist.com/node/21542174 .

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theomorph in reply to Dave Miller

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There are countless popular treatments of Kondatriev wave theory on financial webzines and investment websites – see for instance http://www.moneyweek.com/news-and-charts/economics/kondratieff-wave-theo... , http://www.kondratieffwavecycle.com/kondratieff-wave/ , http://seekingalpha.com/article/295783-the-perfect-storm-in-a-kondratief... , http://www.safehaven.com/article/18457/bernanke-vs-kondratieff-round-qe2 , http://lboeckl.net/model/longwaves.html , http://axisoflogic.com/artman/publish/Article_28641.shtml , http://www.financialsensearchive.com/stormwatch/geo/pastanalysis/2007/11... ,
And http://www.globalresearch.ca/index.php?context=va&aid=11161 ; and see the hyper-detailed blog at http://kondratieff-wave.blogspot.com/ , http://yellowroad.wallstreetexaminer.com/blogs/?p=32 , http://yellowroad.wallstreetexaminer.com/blogs/?p=34 , http://yellowroad.wallstreetexaminer.com/blogs/?p=36 , http://yellowroad.wallstreetexaminer.com/blogs/?p=40 , http://yellowroad.wallstreetexaminer.com/blogs/?p=47 , http://yellowroad.wallstreetexaminer.com/blogs/?p=49 , http://yellowroad.wallstreetexaminer.com/blogs/?p=5 , and http://yellowroad.wallstreetexaminer.com/blogs/?p=137 .


KONDATRIEV WINTER

The consensus of those who subscribe to Kondatriev Wave theory is that we’re now at the end of the 4th cycle, which began in 1949. The 1980 to 2000 bull-market was “Autumn”, and “Winter” began in 2000, and will be with us until about 2020. Some websites are very explicit about this, and will claim that our current “Kondatriev Winter” will get much worse before it gets better – see http://www.resourceinvestor.com/2005/08/25/the-kondratieff-winter-is-upo... , and http://kondratieffwinter.com/blog/ . If that’s true, needless to say it's bad news for the Euro. It will prove all that much more difficult for the Euro to survive until 2020.
In short, if there is any merit whatsoever to Kondatriev Wave theory, then the timing of the EURO’s introduction could not have been worse: right at the beginning of a Kondatriev winter….. But it’s only a theory, and an extraordinarily general one at that.

KONDRATRIEV WAVE THEORY IN GRAPHS:

Also see the following graphs that do an especially good job depicting Konadriev Wave theory, at http://www.theurbn.com/2011/06/the-sixth-wave-to-succeed-find-waste-and-... , http://northcoastinvestmentresearch.wordpress.com/2009/02/02/the-kondrat... , https://plus.google.com/115240453028075783246/posts/VemSxHCfMHo , and http://lboeckl.net/model/longwaves.html .

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theomorph in reply to theomorph

Dear David,

After I cut-and-pasted the post, realized that some of the links did not survive the transition. Here are the full links for those above that did not transfer well. The other links should all work fine, as of this writing (February 10).

http://aix1.uottawa.ca/~rroberge/berryk.htm ,
http://www.moneyweek.com/news-and-charts/economics/kondratieff-wave-theo...
http://seekingalpha.com/article/295783-the-perfect-storm-in-a-kondratief... ,
http://www.financialsensearchive.com/stormwatch/geo/pastanalysis/2007/11... ,
http://www.resourceinvestor.com/2005/08/25/the-kondratieff-winter-is-upo... ,
http://www.theurbn.com/2011/06/the-sixth-wave-to-succeed-find-waste-and-... , and
http://northcoastinvestmentresearch.wordpress.com/2009/02/02/the-kondrat... .

My apologies, I should have remembered that the links with longer URL's do not "transfer" well, when one cuts-and-pastes comments in the TE blog.

Best regards,

Theomorph

pedrolx2

I fail to see the point of this article. We all know CHarlemagne is all about this new 'less is more' governance trend...

Albeit, the very fabric of Europe is precisely that. Its care for human life and dignity. Paradoxically so, as it's also perhaps the continent which has been the most ravished by petty wars.

If one day Europe and its governments stop worrying about human life and dignity, Europe, as a concept (and it has always been a concept) , will die.

I will leave you, again, with the words of César Monteiro, excerpts of a poem entitled 'Europa' written in the aftermath of WW2, translation, mine.

Europe, future dream,
If one day you shall BE
Europe you didn't hear from the dawn of times
the voice, from the darkness, which claimed
that your splendor was not
of your spirit, of which you were so prodigal
but of your bread, of which you were so miserly

Your greatness was made
from those who never wondered
the race to which they served
Your glory was won
by hands that free, shaped
your body free of shackles

pedrolx2 in reply to pedrolx2

and I am beginning to sound incredibly silly (yes you can make the joke ... beginning? I won't mind :-)) because I've reposted excerpts this poem non-end .
Thanks to evolution, humans are driven by catchwords, buzzwords, and things that don't make them have to think much.
It's a question of survival. If you were being attacked by a lion, would you start calculating the time it'd take you to climb atop the nearest tree so that the lion wouldn't catch you, or would you just climb it? Duuh?
This has advantages and disavdantages.
One of the worst disadvantages is that this leads to some kind of 'herdlike' behaviour, whereby we're all driven to think the same, behave the same, and act the same, and unfortunately say the same, at one given point in time.
Today's buzzwords are : bubbles, burst bubbles, government debt, deficit, defaults.
I am pretty certain these 4 or 5 words appear on at least in between 50- 75% of all the articles that are published in the economist, or others.
I think we should worry about these things, but I never liked to be 'herded'. Thinking outside the box is my attempred mot-de-vie, or at least I try it to be so.
In a few years time, we'll be debating completely different things. I personally have no doubts about it.
What is so worrying about this current frame of thought, if I may be allowed to express myself so, is that it's very limited. It puts deficits/debt/etc. above human dignity . It's somewhat perverse.
It's all the banks fault and deep down we all know this. Yet it's the average Joe, especially the poor, dirty, ugly, and stinky southerner that is being forced to pay. I know it's not as simple as that. But in many ways it IS like that.
What's the point of living in a society that hoovers your pockets dry, so it can support a zombie financial system which lives off bouts of 'liquidity injections' from its respective central bank, and then taxes the average citizen more and more and more and more to pay for all that?
This is the reason I find the most recent Charlemagne article slightly perverse. It's not about bubble-bursting. It's about politics, and about us. It's the people, stupid?.
Sometimes some poeple like him admit to this, some times they don't.
Bu tthey are perfectly aware than in 10 years time things will be very different. Hopefully for the better.
And the euro has nothing to do with it. It was simply ill designed. And is being mended. In a far greater speed than some would have thought it would

theomorph in reply to pedrolx2

@pedolx2,

Thank you for your that sentence -- it sums up my own feelings about Europe beautifully:

"If one day Europe and its governments stop worrying about human life and dignity, Europe, as a concept (and it has always been a concept) , will die."

it's the perfect distillation of what Europe has meant for so many people, since the 2nd World War.

European poker site

Europe poker sites that are licensed inside the EU are able to offer their citizens tax-free poker winnings; this is a great tax law that benefits players and implements the policy of open borders. But the law regarding gambling providers is taking another turn; with separate licenses in every EU country and even look-in in some countries (France). Is this legal according to EU law?

Dave90210

Why must the parties of the left, and the unions in particular, be so fundamentally predisposed to supporting huge deficits? This is almost universally the case, affecting the UK, continental Europe and the US. The principle job of the left is to support progressive taxation and widen access to high status jobs. What political handbook espouses this addiction to burdening the state and future generations with massive debts to support profligate welfare policies?

Time and again this economic illiteracy is presented by dishonest left wing representatives who will not admit the true cost of their agenda to a fickle electorate. Francoise Hollande's electoral platform seems to be the latest manifestation of this insanity. For this reason the proposals for balanced budget amendments should be welcomed. This will collectively force the left to present their agenda honestly and rigorously.

Hektor Konomi

'downloading the “killer applications”' - where do they get these metaphors...

hodgicus

"The United States has young firms like Amazon, Amgen, Apple, Google, Intel, and Microsoft; Europe has Airbus, Mercedes, Nokia, and Volkswagen."
In other words, the EU is still creating wealth and employing folks who know how to use their hands, whereas the US is trading chits in retail encounters that merely absorb wealth instead of creating it. In the few real jobs that remain, the US is employing a tiny slice of highly and narrowly trained technical specialists. Lucky US. Airbus and poor old dying Boeing generate more real disposable income for more people in six months than Google has in ten years, or will in the next twenty.
Oh, and woe betide the EU for trying to keep people healthy and happy; there's a policy fail for certain, eh? Care to look at per capita healthcare expenditures? Thanks for yet another boring operatic solo to the effect that the European middle class is too large, too rich, and too healthy. Sounds awful. F*ck you very much.

Josh_US Lux

@ Sanmartinian (at January 31st, 11:03):*

1) No, I don't mind if others "point to my weaknesses". I'm even still talking to you although you do nothing else of late (and haven't even reciprocated yet, although you are asking for it).

2) Funny that you keep accusing me of wanting "to appear to be right to the very end", while you've been trying to convince me for three days now that I misread and you didn't misspeak when you said enlargment happened too early. I repeat: A simple clarification would have done it, I didn't put you in a box labelled "anti-Eastern European" then and I don't do it now. Rephrase it, for God's sake, and that's it.

3) As for me being confrontational in a debate – I confess. Déformation professionelle... . But I hardly ever hold a grudge. Life is too short for resentment.

I suggest we both elevate the conversation above the pettiness of the lasty 24 hrs and move on.

On that note.

*I'm protesting against this new design which has made posting and finding posts so tedious.

Pathgdp

If the writer or anybody that writes about let s say Italy truly knew Italy it would soon realize that all the theoretical talk is , well , just a hot balloon good for an article on the economist , good for neoconservatives or neoliberlas campaigns but not much more. Let' look at reality in Italy: a lot of tax evasion, a lot of black economy and a lot means a LOT. Ever gone to a doctor in Italy? You will be submerged with prescriptions that are of dubious value dubious need but certainly cheap. Ever worked in Italy? A piece of mail in Italy takes weeks to go from Milan to Palermo. These FACTS have nothing to do with theory of gvnmt spending but ALL TO DO with professionalism honesty corruption nepotism . When will economists stop thinking they know by looking at numbers and walk the streets of Reggio Calabria ?

Josh_US Lux

@ Sanmartinian (your post at: January 30th, 10:52)

Have the grace to admit when you mispoke – it's no big deal. But don't tell me I "misread" what you said when it's plain out there for everybody to see what you wrote. I consider that intellectually dishonest and an insult.

Speaking of insults: when a comment starts by smearing me like this:

"You've had these sort of conflicts with other posters who seem all to share the same opinion about you."

... I do not bother enough to read any further. You will understand that I stopped right there.

I will say that much:

Primo - I'm virtually immune to bullying, and am also not looking for friends, so I'm unimpressed.

Secundo - Given the fact that the smallest common denominator of what you describe as "everybody" and I will call "team Sanmartinian" for the purpose of this reply is a shared conspiracy theory, I actually make a point of being my own man. I prefer to use my brain to switching it off when doubts arise.

Tertio - If you want me to share some of the observations I have made with regard to your interaction on this board, let me know. I'll be happy to comply. I will tell you that much: The two of the regulars here who refuse to be "enlisted" in either team A or team B are quite happy with it. I let you guess who that other person is.

I'll leave it at that. When you feel fit to argue your case without insulting me, you are welcome to do so. If not, "don't bother to reply", as you have the habit of telling others.

Loneshadow

With no reference to GDP and types of services provided by the state, the comparison looks shallow. If social costs and government revenue spending been the only deciding factors, then Scandinavia would have been buried deep in permafrost. For sure, productivity matters a lot. For explaining that, one has to look at, apart from just the budget and debt angles, also the relative standing in terms of technology, cost, culture of innovation and open-ness and linkages in big and emerging sectors, and relevance in world economy.
The last 2 decades have also seen a huge leap in commodity and energy prices that has had devastating impact on relative economic strength. USA barely escaped. Not least because the world can't do without its currency; USA kept importing (incl outsourcing from Asia) low-cost labour and has space to offer to immigrants; and US dependency on imported energy came down. Most of the winners from the oil-deficit zones had something special to offer. Special and big.
Another of Europe's main failings internationally has been its inability to extract price for its products, systems and cultural values from the surplus-producing and big saver countries. US uses a version of English for its dealings; Russia, Russian; China, Mandarin. Even the current gap is being seen more as a split between the Nordic-Germanic part and the Club Med Latin part, with France sticking to the perceived winner. Cutting down social spending won't save the troubled members of the EU.

MilovanDjilas

Something I have just noticed about the bar graph - it merely measures productivity as gdp per capita. Not as manufacturing productivity, or hours of manpower, etc.

So in other words, Norway's oil production makes it look like practically the most "productive" country in Europe. And Ireland's banking bubble makes them look even more productive.

What labour productivity growth? We are measuring growth in gdp per capita here.

la.výritý in reply to MilovanDjilas

Very well observed, Joe!

Also the second chart doesn't tell us if the 'growth' is measured in USD, EUR or in -perhaps- devalued domestic currencies, as this was the case with the U.K. after 2008 when the GBP slumped approx 30 percent against the Euro.

sanmartinian in reply to MilovanDjilas

to Milovan Djilas who wrote

What labour productivity growth? We are measuring growth in gdp per capita here.

with copy to la.výritý

You both have just touched on the main objection that modern mathematicians have against "global efficiency" measurements:

It can't be done.

Groningen University is the main proponent of these studies. They suffer from this fatal flaw.

For slightly deeper details, please read my post of January 28th, 00:07 on this thread if you can find it in this mess of re-engineered comments...

sanmartinian in reply to la.výritý

copy to la.výritý

to Milovan Djilas who wrote

What labour productivity growth? We are measuring growth in gdp per capita here.

You both have just touched on the main objection that modern mathematicians have against "global efficiency" measurements:

It can't be done.

Groningen University is the main proponent of these studies. They suffer from this fatal flaw.

For slightly deeper details, please read my post of January 28th, 00:07 on this thread if you can find it in this mess of re-engineered comments...

sanmartinian in reply to MilovanDjilas

To Milovan Djilas & la.výritý

From a silly layman to two intelligent but presumably also laymen on comparative efficiencies.

DEA (Data Envelopment Analysis), is a mathematical tool first put forward by Charnes, Cooper and Rhodes in 1978. It can be used to measure the relative efficiency of units.

Relative efficiencies are measured in physical units such as number of transactions done by a bank employee, number of shoes made by a machine, passenger miles flown by airlines, gold medals won at Olympic Games and so on.

Overall measurement units, such as money, are stark verboten. Money has also the even greater disadvantage that it varies in value in time, place and market.

That's why models put forward mostly by the Groningen University and much loved by "econometrists" cannot be used to compare productivity ( a form of efficiency).

DEA looks at units (called DMU Decision Making Unit) and read their outputs produced by inputs.

Weights are then given to them to compare their real contribution.

The beauty of DEA is that these weights are not chosen by the analyst (that would make them subjective) but by the process itself.

The system calculates benchmark DMU against which the others are measured.

The whole thing is translated into what old mathematicians would have called a boundary but is now called frontier giving the whole thing a taste of cowboys and red indians.

The frontier is a broken line separating efficient DMU from non efficient ones. Further complicated techniques like smoothing the frontier to avoid mathematically inconvenient sharp points or negative efficiencies are used, but that would take us too far.

To copy and paste (I didn't ask for permission; I believe it would be granted) from J E Beasley, the author of OR notes: DEA has been used in banks, police stations, hospitals, tax offices, prisons, defence bases (army, navy, air force), schools and university departments.

I can add it has been used in sports rankings such as Olympic Games.

One day it'll be used to measure productivity without the silly results obtained by some economists.

So I'm not accused of empty accusations against econometric methods, let me give my favourite example.

Global monetary measures of efficiency have to use scales. In one aspect, money is scale of value, so is the production of laws, so is production of music, so is the consumption of legal advice.

And on and on.

Now, scales cannot be added or subtracted. Think of temperatures, a scale if there ever was one.

If you think they can, mix two buckets each with one gallon of water, one at 50 degrees F the other at 100ºF.

Obviously what you get is one gallon of water at 150º F, the sum of the two temperatures. Right?

Before you start calling me names for the silliness of my example let me remind you that this is exactly what those econometric models do, using scales of value (money, for instance)

Hope you don't start throwing shoes at me, all at the same time. One or two I can dodge; more is difficult.

I don't offer links. Just google DEA. You'll get more answers than you ever feel like reading.

One of my favourites is at

http://www.igi-global.com/chapter/encyclopedia-decision-making-decision-...

but I'm biased. I helped to translate it some time ago...

david b

I would like to think that it's more natural to group the Nordics with Germany and the Netherlands rather than the UK and Ireland (the bar diagrams), but I may be wrong.

MilovanDjilas

Interesting article. But, I think the World Bank's sceptical conclusions about fiscal consolidation are wrong.

We have a tendency in Italy - separated from the rest of Europe by the Alps - to consider our own mess a purely localised problem. Both the inhabitants of the peninsula and the rest of Europe tend to buy into Vatican-sponsored propaganda that would depict Italy as a small country. We are not, and our tendency to influence (usually negatively) on European events is routinely underestimated.
(Please pardon this premise...)

Yes, there is clear evidence Italian productivity has declined (marginally) and it is easy to see the connection between rapidly shifting FDI toward Central Europe and away from southern Europe over the last decade (not to mention the fact that it is hard to see ANY FDI in Itally over the last decade - for example, we are the only G7 country not to have a foreign auto factory).

What the article does not explain (not in the report?) is that much of the FDI going into Central Europe came from Italy itself. Our country is one of the world's largest sources of FDI - and largely going toward Central Europe over the last decade.

Why? Two reasons, in my experience:

1) To avoid excessive taxation in Italy - and labour market rigidities and higher wages (this differential is disappearing however); there has also been a fall-off in the vocational training programmes of the past, i.e. we are starting to lack qualified technicians among the younger generation.
These factors have led to an end of investment for the future by our own resources - and it is directly related to the excessive debt burden we have been servicing for over two decades.
This is the fault of our ex-Christian Democrats who have supported Berlusconi all these years, in the hope of preserving their excessive pension benefits and undeserved board memberships of the State "underbrush" (sottobosco) as we call it here. It is not uncommon for "retired" politicians to sit on 3 or 4 boards of various local social, financial, cultural or industrial consortia.

The excessive debt burden has a doubly mortifying effect since anywhere from 54% to 80% has been in domestic hands over the last 2 decades: hence, many wealthy individuals and institutions have lived a rentier economy - and not invested in job-producing activities.
As a side note, I would remark that our country's citizens have spent massive amounts of money in the last two decades to renovate our housing/real estate assets. This was needed, but the investments in brick and mortar (and not machinery and companies) also did not produce jobs.

2) GreatMongo has a point about low birth rates caused by lousy child care benefits. I should explain that the Catholic Church has always blocked the establishment of structures outside the family here. MOTHERS and GRANDMOTHERS should be responsible for day care, in their view, and the state should not be creating parallel structures. Result: Mothers/Grandmothers in 2012 always tell their married daughters, "Whatever you do, do not have more children - I am sick and tired of raising kids." (At age 60, an entirely understandable position).
Plus, it still requires a minimum of 3 years to obtain an uncontested divorce with no children. God forbid there are children involved - divorces can easily take upwards of 4-6 years through bureaucratic delays, etc. Once again, the Church imposes its will on Italians.
Result: Italian women do not want to marry (either in church or in the town hall) and they DEFINITELY do not want children.

Let us not underestimate this dynamic - wholly ignored in the report. Every Italian entrepreneur in the world is also looking to marry a non-Italian woman - it's part of building a company, and building a family. It can hardly be done in Italy, unless the family are already millionaires.

So, hundreds of thousands of Italians have brought their capital with them to Central Europe: let's start a family and open a business.
If I had more capital available at the moment, I would be doing the same - and all my friends here around Trieste discuss the same possibility.

In the era of a multi-religious, global economy, the Vatican is once again responsible for the economic, social and even biological oppression of the Italian people.

GCTIII in reply to MilovanDjilas

Milo thanks for the comment. Very eye opening. I am from the USA and lived in Germany for 5 to 7 years. I hope this all works out for a great continent with alot of great people.
Pointing out the problem is something that does indeed need to be looked at. I was in the dark in my own country. Take a look at it and we can all agree or disagree. We in the USA nor currently can any country in the world continue down this road without an economy and growth. Do not allow your politicians to cloud your eyesight. Nor the media.

enou80

It is not the government spending on social welfare, health, education, and other necessities that has created a problem for Europe. It is the "RECKLESS" government spending that has created a problem. Reckless government spending occurs in all countries more or less, it is just that countries like Australia have the mining boom to rely on.
To question government spending on the necessities, while other governments spending on bailing out greedy corporate bankers does not reflect a perfect picture on the situation. Not to mention the hardcore contradictions in the socialist, and capitalist ideologies.
Let's not forget that it is the EU Model, where some countries spend, others earn, that has created this uneven equilibrium that is threatening to destroy the union, and in effect the rest of the world.

Per Kurowski

All European banks could lend to any European government holding zero or 1.6 percent in capital, according to the quite recent credit ratings of the sovereign, but, have to hold 8 percent when lending to a small business or entrepreneur. That has introduced a huge bias in favor of channeling the savings to the public sector, and the figures here are just a reflection of said reality.

About Charlemagne's notebook

In this blog, our Charlemagne columnist considers the ideas and events that shape Europe, while dealing with the quirks of life in the Euro-bubble. An archive of print columns can be found here.

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