Is the Eurozone crisis over?

New measures announced at the latest EU Leaders' summit include: 

1. Spanish and other Eurozone banks will be able to raise money in the markets and receive bailout money directly 

2. A single banking supervisor is sought to be established for the Eurozone (almost certainly the ECB - though this may change if any of the 27 countries want to stay out of the banking union), 

and 

3. Common capital requirements.

This should frustrate all those who have been betting against the Euro, as what I have been saying for several months should now be evident to everyone.  Progress on the above issues is at present anticipated to take up to the end of the year.

As the Euro stabilises, however, lest we become too euphoric about it, here are the essential steps that still need to be taken before the Eurocrisis can be declared over:

A.  A common Eurozone system for deposit; 

B.  A common system for resolution of financial failure and other issues to do with financial services companies (including those in the shadow financial system)

and 

C.   Clear identification of which body will actually stand behind the Euro, in the same way as the UK Government and the Bank of England stand behind the UK Pound, or the US Government and Federal Reserve stand behind the US Dollar.

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America unhappy at Greek vote

American propaganda against the Euro will continue unabated inspite of the Greek vote yesterday.

One headline in relation to the result says: "New Democracy ekes out win in Greece" (!). 

No relief at the Euro decision, after having blamed the Euro systematically over the last several months for the continuing state of the US economy!

So what is likely to happen now?

The Euro will strengthen marginally, but don't expect any long-term improvement in the Euro for the next several months till the structural issues of the Euro are addressed.

As I have written several times, the struggle in the Euro-area concerns the future political structure of the area.

Some Euro-area countries will opt in to a much tighter political and financial structure, others may opt out.

However, the Euro is solid and is here to stay. 

The degree of solidity will depend on which country exactly is in and which is out.

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Is China really the most industrialised country in the world?

Well, that depends on what measure you use.

 

According to the World Economic Forum's World Competitiveness Report, yes: it is China with a GDP of 5878 billion USD, of which manufacturing contributed 1999billion, making it indeed the largest manufacturer (the US came second, with manufacturing contributing USD1906 billion - that was 13% of the US's GDP, which remains by far the largest in the world at USD14,658billion).

However, if you look not at the brute numbers but at manufacturing per capita, then tiny Switzerland is the most industrialised country in the world! 

 

Swiss manufacturing output comes in USD12,400 per capita - eight times as much as the Chinese and twice as much as the Americans.

 

Switzerland comes in at a not bad 19thin the world even in terms of the overall value of its manufacturing, with manufacturing output at USD100 billion.  

 

That's after 40 years of decline in its factory floorspace, and notwithstanding the extremely strong Swiss Franc which threatens Swiss exports, and because of which the Swiss National Bank has had to intervene in markets to try to systematically REDUCE the value of its currency!

 

The second most industrialised nation on a per capita basis is Japan ($8600), third is Singapore ($8500), and even supposedly de-industrialised Britain produced USD4000 per capita - almost three times the Chinese, whose 1.3 billion people produced only $1500 per capita.  

 

For the other leading industrial nations, Germans produced USD 7700 per capita, and the US produced USD6000 per capita - and even that is four times the Chinese.

 

The facts and figures above are taken from yesterday's edition of  the Avenir Suisse newsletter, which is in German.

 

Whether we really need all this manufacture for the future, or even right now, is a different question. 

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Human Dignity Award (Maanav Adhikaar Paaritaushik) 2011

The Maanav Adhikaar Paaritaushik (Human Dignity Award) of Rupees One Lakh, in memory of Professor M. M. Guptara is awarded for 2011 to Mr & Mrs Chandra Kant Shourie, of Satya Niketan School, Nagod, Madhya Pradesh.

The citation reads:

"In spite of having hardly any resources or support, the Shouries founded in 1985 a school in one of the most backward areas of our country (Nagod, Madhya Pradesh).

"Starting by transforming their own living room each morning into the first classroom for the initial kindergarden class of 20 children sitting on the floor on mats and around an old dining table, the now-fully-fledged High School has 650 pupils producing outstanding results all the way to 12th grade, with teachers trained in India as well as abroad.

"Satya Niketan is the only high school in the area providing quality education through English so that the children get a chance to go forward in the world, equipped to address the challenges of higher education in the different fields which are opening up in our country.

"Particularly noteworthy is their work with children from very poor homes, who would probably never have been educated otherwise. Satya Niketan alumni are working as engineers, IT professionals, doctors and  other fields, earning enough to lift their families out of the vicious cycle of poverty.

"Equally important, Satya Niketan has become a channel of dialogue with society, challenging long held superstitions and beliefs which have been detrimental to the development of our society and nation: a point of challenge and change, as every educational institution ought to be".

The Guptara family appreciates Mr and Mrs Shourie's lifetime of dedicated service, of which this award is only a very poor and inadequate token of recognition.  "The Shourie family's contribution to the area has been outstanding, and their contribution to our country has been exemplary, as they have helped people of all backgrounds, particularly female students, and those of a poor economic and caste status" said Professor Prabhu Guptara, son of Professor M. M. Guptara.

ENDS

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