Tuesday, 25 September 2018

All that glitters... in the union of expectations

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Well the Olympic Games – oops, sorry, London Twenty-Twelve – are done and dusted and a pretty fine spectacle they were too. Medals were awarded in 302 events. The gold medals contained no more than 1.34% – about 6 grammes – of the metal which might, in other circumstances, create some problems under the Trade Descriptions Act (1968) but, then again, I can’t see any of the winners lodging a complaint.

Anthony Peters, SwissInvest Strategist

Now, briefly, for my own version of Olympic trivia: On the night of the grand but slightly confusing opening ceremony, gold closed at US$1,623.20. As I open books this morning, it’s being quoted at US$1,623.05 which is as good as unchanged. However, in the interceding days, it has traded as low as US$1,585.07, not that anybody cares. However, I doubt that this has any influence on the value of a gold medal which can, without doubt, be worth millions to some winners and two thirds of dick on a stick to others.

If Hans and Willem and Jorma Sixpack are expected to pay taxes and solidarity levies and heavens knows what else in order to support Jorge, Giovanni and Stavros, they will not do this by pumping their hard earned cash into a social black hole.

Irrespective, I wish to thank all the athletes for the pleasure they have given us, whether they came first or last in their respective events, and my congratulation to Lord Coe for delivering the Games many thought we British could never get off the ground. To me, old Seb Coe is the true Lord of the Rings.

Enough fawning and back to reality.

One man’s union

I had the great pleasure of being invited to watch the closing events on the TV with friends who live close to my home. I pottered down for dinner before the “show” and we chatted, as we do. My host, formerly of the main board of a once great British outfit which at one point was the largest quoted company in this country but which now only exists in the memory, has just returned from France and as things go, we talked about the dismal figures reported last week for French industrial and manufacturing production. His comment was that once reality starts to dawn, we might well find that the fiscal and structural problems facing the French may well dwarf those which are currently challenging Spain and Italy, let alone the eurozone countries which have already had to capitulate at the base of their mountain of debt.

We were talking about the urgent need for fiscal union when the gentleman in question suddenly perked up and declared that it was not fiscal union which was required but, in his words “union of expectations”. Let me explain. If Hans and Willem and Jorma Sixpack are expected to pay taxes and solidarity levies and heavens knows what else in order to support Jorge, Giovanni and Stavros, they will not do this by pumping their hard earned cash into a social black hole. Not until social benefits, retirement ages and labour laws are unified will those who have be prepared to legitimately support those who don’t. My friend once again brought up the matter of all of Europe raising retirement age from 65 to 67 at the time when President Hollande is turning the clock back with his programme of retirement at 60.

Some individuals close to the German government have let it be known that if a major re-jig of the approved and agreed on fiscal system were to be introduced, then Berlin might find itself obliged to call a referendum. I can’t see too many Germans wishing to find themselves in a tighter fiscal union where the expectations of what individuals can take out of the system again differ so significantly. Let’s face it; when we look at the United States of America, retirement age, Social Security and healthcare are organised on a federal and not a state by state basis.                                  

As we chatted, my friend also pointed out that 216 nations had participated in the London Olympics. This is up from 205 in Beijing and 201 in Athens. The rest of the world, so he concluded, is breaking into smaller units at a time when Europe is desperately clinging onto the dream of creating a super state. It is of course remarkable for many of my generation – the cold war generation, who lived through the elation in Western Europe when the attempt to create a homogeneous supra-national economic and political block in Eastern Europe failed, only to find that something in certain ways not dissimilar is being pursued with what also occasionally appear to be forms of threat and coercion. The threats are of course not of the military kind as they were in the now defunct Soviet Bloc but ones of economic doom and destruction.

The Ryan factor

Enough, enough! We have a busy week ahead of us in terms of economic releases, many of which seem to have lost something of their day to day relevance as we struggle to determine whether the economy has turned the corner or merely changed the angle.

In the mean time, by appointing Paul Ryan as his Vice Presidential running mate, Mitt Romney has, in ideological terms, put some more clear blue water between himself and President O’Bama. There is no question that the gloves can now come off  and that the political debate begin in earnest. There are less than three months to go until the elections. It is astonishing for us Europeans to observe the polarisation of politics in America at a time when we here are all screaming for either grand coalitions or technocratic governments to help us out of the mire.

Different strokes for different folks.

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