There are euros enough to spare yet in the German budget yet.

The drug policy commissioner in Germany has has said that when it comes to continuing welfare allowances for smokes and beers, “clearly there is room for luxury items in benefits for the long-term unemployed”.  And that anyone whom doesn’t agree with her is simply populist. For good measure, however, she does adds moderation is important.

Good news for the smokers in Germany though, the government is keen to defend their rights to smoke and refuses to increase the taxes on cigarettes.  Poor Germans are now reduced to rolling their own smokes.

“Regarding the tobacco tax we first need to create a level playing field,” she said. “Many smokers have moved to fine-cut rolling tobacco and roll their own cigarettes now, because it’s cheaper due to the lower taxes.” Instead of raising the tax on a pack of smokes, the government should instead insure that cigarette smuggling is reduced to insure that they are paid at all, she told the paper.

Früh is a pretty famous brewery in Cologne, Germany.  On their website, they have archived all their billboard campaigns, organized by year.

At the very bottom of the list, there’s a separate category called Düsseldorf, which is a rival city.

Those ads poke fun at Düsseldorf, with taunting taglines like “Now also in small villages around Cologne”, “line up”, “for relief, now available in A3 (German highway outside Düsseldorf)”.

Full archive here.

Kishore Mahbubani, Dean of Singapore’s Lee Kwan Yew School of International Affairs, has written a stern piece on how Europe just “does not get it” in three strategic areas.

The greatest strategic challenge to Europe is the Islamic one. It exists within the body politic of many European societies. And the fastest-rising Islamic demographic is on Europe’s doorstep. Europe should, therefore, see it in its long-term interest to defuse Islamic anger. Instead, it has shown moral cowardice on the Israel-Palestine issue, refusing even to admit that an unbalanced American policy will hurt European interests more than American interests. No major European leader has the moral courage to speak truth to power on this issue.

Europe’s second error is to ignore its No. 1 strategic opportunity: Asia. [Asians] do expect Europeans to treat them with respect, not cultural condescension. This is another thing Europeans do not get. The protests in European capitals before the Beijing Olympics, the efforts to dictate human-rights clauses in the India-E.U. cooperation agreement and the obsession with Burma show both a lack of sensitivity and of strategic thinking. If Europe does not act fast, it will miss the boat on Asia.

The third strategic error is to remain obsessed with the transatlantic relationship. It is difficult to capture in a few words the strange mix of European attitudes towards America: admiration and resentment of American hyperpower, respect and condescension towards U.S. culture, dependence on and discomfort with American leadership. At the core of this is a deep European belief that culture is destiny and that the common Judeo-Christian heritage and common Enlightenment values will ensure an eternal commonality of interests. America will always put Europe first because Europe, not Asia, exists in American hearts.

Over the long run, geography — when combined with economic shifts of power — determines destiny. America’s interests in Asia are rising while its interests in Europe are declining. A growing Hispanic population will make Latin America more important. This is why the time has come for Europeans to think the unthinkable: the “natural” transatlantic partnership may someday come to an end.

The question now begs, is the perceived decline in European power in the global geo-political sphere a result of actual power decline, or simply a lack of nuance and strategic foresight when it comes to soft power management?

As an example of our limited soft power, consider that when I ask people around the world, what ‘Europe’ means for them, I am always surprised how little they mention social democracy, or human rights, or even ‘the good life’. Overwhelmingly, the most common response is a memory of European colonial rule, and an abiding sense of our satisfied self-superiority. While Europeans mark history by 1918, 1945, and 1989, the rest of the world still remembers 1842, 1857, and 1884, and always will. Many opportunities have come and gone to draw a line under the past, yet many see Europe as a closed fortress offering few opportunities for integration or innovation.

And does it require a shift of attitudes from self-satisfied superiority that extends to the way it interacts with the rest of the world?

What the wretched of the earth want is not our money, but our respect. We pay out aid unrelentingly, but barely consider whether the money is spent effectively, or the distortions we introduce into local politics, and this demonstrates an even greater contempt than to give nothing at all. We have yet to learn the lesson of China’s diplomatic success in Africa, which is that developing nations are less interested in process than achieving results.

From the Economist, on three factors that sets the British apart from its continental cousins.

One, a history of trading (as opposed to French farming, for example), common law system, and early industrialization.

Historians describe the English (more than the British) as unusually individualist and market-minded since medieval times, working for wages and trading property. England has had a central system of common law for centuries. It industrialised early. It has not been occupied in a long while. All this matters.

Two, the fact that the British has other options – part geography, part history.

These are all reasons why the British are different. Why, though, is Britain unique? The Nordics are free-traders who joined late and believe their national standards to be higher than Europe’s. Lots of east Europeans look to America for their security. Germany and Austria have their own Brussels-bashing tabloids. Sweden and Denmark both declined to join the euro.

The difference is that, although many of the others dislike aspects of the EU, they feel they have no real alternative. On many fronts, the British think they do. If a common EU foreign policy fails, Britain is still on the UN Security Council. If the euro collapses, Britain has the pound. Should EU regulation get too burdensome, there is always the chance of opt-outs.

Three, Britain does not share in the collective defeatist sentiment from WWII (except for the imperial decline part) as those on the continent.

To de Gaulle’s generation, the EU was a solution to the “German problem”, above all. Yet the post-war cry of “never again” resounds less in Britain. But it matters greatly that, almost uniquely in Europe, the second world war is a positive memory in Britain—and that Britain has not been invaded for centuries.

But smugness and schadenfreude aside, few in even the most reactionary corner of the British press could deny that, like it or not, UK and the EU are stuck with each other for the foreseeable future.

Europe will survive only if it acts more like a maritime power, its eyes fixed on growth and the far horizon. And Britain is needed to defend the free movement of people, goods, services and capital in the internal market. Walking away from the EU would not make either the club or its rules go away. In short, Britain and Europe are stuck with each other.

Europe’s lingering hostility towards the market economy which sways from suspicion to outright resentment is rearing its head again, and has Tony Barber fuming.

One reason why the eurozone is sliding into ever deeper trouble is because its political and bureaucratic elites do not like, do not understand and have no wish to understand financial markets.

In the last few weeks, European leadership has alternately attacked everything from hedge funds, sovereign wealth funds, to now rating agencies.  On the surface, it might resemble same kind of populist outbursts American politicians served up on a plate when confronted with public outrage during the bail-out and ensuring bonus debate.  But in a European context, the public rage has been largely directed towards rising unemployment and prospects of potential cutbacks.  The leadership on the other hand, have been largely playing victims to the boogeyman that is financial market participants.

In the meantime, British and American analysts are racing to decipher the long-term implications of what took place over the last few weeks.

First stab: Germany is clearly emerging from its WWII guilt-ridden, Euro-centric, and multi-lateral stance, to a national psyche that is more focused on self-preservation.  It will have its fiscal sustainability, within or without the Eurozone.

Characteristically, one of the key terms of fiscal conservatism in Germany is borrowed from environmental politics: Nachhaltigkeit or sustainability. Unsustainable debts are associated rhetorically with a diffuse and contradictory bundle of future-angst – worries ranging from climate change to Germany’s declining population. Quirky it may be, but it would be wrong to deny that this eco-enhanced fiscal conservatism does have some grip on reality.

Secondly, part of the fiscal imbalance within the Eurozone itself, in which northern and southern Europe more or less mirror the financial co-dependence between China and the US, needs to be addressed.  Opinions differ as to just exactly what Germany’s options are, aside from its long-term pursuit of and export-led model, given its demographics and fiscal conservatism.

A low-inflation, export-driven model of growth was an appropriate policy in the face of Germany’s national disaster in 1945. It was contained within the Bretton Woods system thanks to America’s accommodating current account balance. In 2010, such a policy is fundamentally at odds with Germany’s role as the anchor of the eurozone. The challenge for the German political class is to complete the modernisation that it has achieved in so many other areas of policy. It must overcome the last legacy of the Adenauer era in its knee-jerk commitment to fiscal conservatism.

Post WWII, Europe’s political power projection on the world stage has been weak relative to its economic contribution.  Should it fall from economic grace too, then what is left?  American is undergoing a painful economic adjustments with political consequences, and its status as the lone hegemonic power is both unsustainable, and undesirable to most.

It is one thing to ask, as Lawrence Summers did, how long the world’s biggest borrower can remain the world’s strongest power. It is another to ask how America can provide global common goods when it can’t solve its own elemental national domestic problems. In such times the international scene wants for a strong European Union that shares democratic values with the United States.

One of the highly idealistic, and now seemingly dead wrong assumptions from the start of the EU project was the gradual reduction, and eventual banishment of the idea of power politics within the continent.  But to its surprise, sovereignty still matters greatly to many, and no national leaders would put the interest of their countries above that of a vague state apparatus operating from Brussels.

The Euro-elites were hardly ever serious about building a political union that would require far-reaching concessions concerning national sovereignty; they saw no need for such sacrifices in a world in which power politics no longer played a significant role. Now they find themselves in a world in which power politics still matters, and they are weaker and less prepared to engage in such politics than ever.

The lack of an higher ideal behind just exactly what the EU experiment stands for (other than the purported economic integration), has relegated the continent to striving for relative economic comfort, and little else.

It seems to have nothing to do with economics and everything to do with beliefs—specifically, belief in the values for which the society stands. Many Europeans cannot figure out for sure what those values are, for the Euro-elites seem to have been struck dumb in this sphere as in no other. The sense of involvement in a great mission, of preaching the virtues of a better world, has vanished. The closest thing to a shared noble cause is now an anodyne, lowest-common-denominator environmentalism. It is hard to generate much enthusiasm for the commandment to separate green glass from brown. The European model has thus approached that of Latin America, whose countries have a common ancestral culture, generally live in peace with each other, and fail to cause the rest of the world much trouble.

Now that relative economic comfort provided by the welfare state starts to slowly crumble, brought on by an overly ambitious economic integration project, political largess, and unfavourable demographics, what is next?

I don’t normally write about Canada, usually because it is always blissfully uneventful back home.  But it looks as though I missed out on a couple of pieces of news the past week that might have suggest almost certain changes in the Canadian healthcare system for the foreseeable future (h/t to my mom!).

First off, facing steep demographic declines and consecutively higher spending on health care for the past decades, the government of Quebec has proposed a $25-per-visit charge for doctor’s visit.

While I am not all that familiar with Quebec’s health-care system, as each province has the mandate to run its own, the concept of paying (somewhat) for healthcare is no longer new to the rest of the country.  A number of provinces, including Ontario, for the past few years, has put in place an income-based healthcare contribution, usually paid at tax times.  The amount is income-tested, and does not exceeds more than a few hundred dollars even for the richest.  However, the idea of a per-visit co-pay rings a bit too American to most Canadians, but that’s really the least of our worries here.

What it does signify is a shift in practice from the ideals of universal healthcare, so troubling to some that some claim it contravene the Canada Health Act.  Whether that will be challenged in a court of law once the law comes into place is still to be seen.  But what the proposals do reflect is the economic realities of our times – more pensioners supported by a healthcare system buckling under its weight.

The rest of the country is watching this development with keen interest and little smugness, knowing fully well that despite appearance of healthy budgets, we are all going down that road of re-visiting the feasibility of free health care, with Quebec leading the pack.

The second piece of news has to do with the Ontario government’s attempt to cut the price of generic drugs sold in the province, by eliminating a middle-men fee between the generic drug makers and the pharmacies.

While the government claims the fee – where drug makers pay pharmacies to stock their products in the stores, and thus inflate the price of generic drugs that the government must cover under its public drug plan, pharmacists insists that it pays for services like home deliveries and free advice dispensed at the counter.

Ontario’s pharmacists say these professional fees add up to $750 million a year in funding for them and help pay for home deliveries, advice and other services.

The province says the fees simply inflate the price it pays for generic drugs, noting the same drugs cost a lot less in other jurisdictions.

The noose is tightening around businesses that previously relied heavily on government subsidies as part of its business model.  So much that the largest drug chain store in the country, Shopper’s Drug Mart, took a 9% plunge in its stock price when the report came out last week.

The government is most likely counting on the fall in generic drug price (previously allowed to be 50% of brand-name products, now no more than 25%) to lower both its public drug program bill and work-place benefit plans, and make room for all three parties – the government, work-place, and individuals to take on additional contribution costs in order to maintain the “free” healthcare program for the foreseeable future.

In other news, the Dutch are also revisiting their concept of affordable health care, which has grown increasingly expensive in the past half a decade.

From my own experience, the low-cost nature of the Dutch system has a lot to do with its healthcare system focusing more on treatment, and less, if any, on preventative care, and where a cultural aversion to medication (if you are sick, stay home and drink tea) and hospitalization (home birth is the rule rather than the exception, and asking for epidurals during labour means you are a wimp) also keep the cost low.  I will try to write about those another day.

But all in all, we are all moving in the direction of higher health care costs.  Now the race is on to see which country is best able to contain the cost without sacrificing the care.

Image via Wikipedia

I love it when mainstream newspapers fills up their weekly columns by getting well-known, and somewhat off-kilter politicians to regularly digress on seemingly mundane subject matters, but occasionally trip up and caught spewing out some truly ignorant garbage.

Take the Telegraph from a few days ago that featured this piece of gem from London’s esteemed mayor.

In a testament to the effect those Scandinavians have had on this impressionable young man, Johnson was “completely gripped by the mystery” of Swedish detective Wallander during some post-Christmas special on BBC.  So much so that he spends a dozen paragraphs during this essay, tracing the history of Nordic detective genre.  Intoxicated by its awesomeness, Johnson soon reached his liberal-social-democratic-loving climax.

In his special sort of self-involved prose, Johnson wondered why those Nordics seemed specially adapt at churning out such “powerful landscapes of the imagination?”

While there are some perfectly reasonable explanations out there, this one, for example, attributes it in large part to (gasp!) commercialism and accessibility of crime novels (it sells!), not to mention the path paved by previously successful English crime-writers such as Agatha Christie.

But not satisfied by such shallow answers, Johnson journeys on with his inquiry.

He praises the Nordic’s “earnestness, the deep, pale-eyed sincerity”, pines over their “virtuous” societies, and can only be imagined to salivate over their reputation as “global goody-goodies”.

While doing so, I suppose he overlooks their obsession over eugenics, the interventionist state, growing problems with its Muslims, the mediocrity and uniformity of everyday life, not to mention its high suicide and alcoholism rates.

But what’s all that, if they can build “slimline mobile phones, and still look after the poor”?

Clearly blinded by the sparks flying out of his eyes, Johnson adds, “there is the way these Nordic types are like us … They look roughly the same. They speak English almost like us.”

To which a female black chair of the London assembly retorts:

“I’m not sure which ‘us’ Boris is talking about but if he thinks that Londoners look in the mirror and see someone Nordic looking back at them he really needs to get out more.”

But he is not done.

With their historic (and unspoken) aversion to immigration they boast considerable social cohesion, extraordinary literacy rates, beautiful and emancipated women and such an effective health and safety culture that their cars must drive with headlights on in broad daylight in the middle of summer.

So basically, Johnson thinks shutting the island off from the rest of the world is going to improve Britain’s gene pool?  To that, I say, he really needs to get out more.

Indeed it has. 

Politically, and economically.

Over the past three decades, states that privatized alongside the Chicago school doctrine, and doggedly pursued market solutions, particularly ones in the west, such as the US, UK, and Iceland, have experienced the most violent internal convulsions.

That’s no news.

But countries that resisted the so-called Anglo-Saxon model are now smug and ready to regulate.  Within the EU, this means one thing:

[T]he French and the Germans are in the ascendancy in Europe, while the British influence is fading.

[The British] fear France and Germany are out for revenge, leading to a flood of new Europe-wide regulation aimed at preventing a future crisis that will drive banks out of the City of London and overwhelm UK businesses with red tape.

Image via Wikipedia

Like other pockets of Europe, Ireland experienced phenomenal growth in the 2000s.

Like Iceland for example, both relatively poor before major economic changes took place, soared to unimaginable heights during the boom, and now shot down to earth and licking their wounds.

But are the Irish more mentally equipped to deal with the recession, given their not-so-distant memories of poverty and hardship?

We have a long and proud history of poverty, I don’t know if that helps. When I was growing up, you never asked another Irish person what they did for a living, and you never turned a beggar from the door. These are lyrical and dangerous clichés, of course (though incidentally true): Ireland was by no means a classless society. Even so, I do see differences from other countries in the play of rage, entitlement and delight around money: who has it, who deserves it, who gets cross.

An insightful narrative of the recession months, as seen by the Irish.

Jim Rogers moved to Singapore, so his daughters can learn Chinese!  Never mind the fact that Singaporeans speak debatable Chinese, as well as an amusing form of staccato English.

But now, it turns out that mastering this insanely difficult language will not guarantee you riches or any semblance of a respectable career!  Just listen to this ex-expat.

Everybody comes to China with a plan to strike it rich. Rather than a fortune and a new career, most expats seem to return home with little more than a thicker waistline, a prodigious collection of DVD’s, and possibly a new spouse.

Ouch.

The simple fact is however, mastery of Chinese, no matter how good you are, is NOT a golden ticket to employment in the United States.

Although Chinese may in fact be in high demand, what’s equally important is to factor in is the supply of Chinese speakers. According to the US census, in 2006 there were 2.5 million people in the United States who speak Chinese at home. That’s more than any language other than English and Spanish.

Bottom line: simply mastering Chinese is not the golden meal ticket, and will not guarantee you a career, anywhere, in any way.