Category Archives: eu

Raiding the Ratings Agencies

Infernal Affairs

The financial news has been so intense this week that I’ve all but given up on trying to blog it. Twitter‘s where you’ll find most of my comments on the tumult in Europe and the US.

Amid markets falling and politicians on both sides of the Atlantic flailing, one bit of rather shocking news did stand out: Standard and Poor’s Milan offices were raided on the orders of a prosecutor’s office in the small Pugliese town of Trani, ostensibly on the behalf of a consumer right’s group.There is little doubt that the raid was politically motivated.

After all, they picked a hell of a day to execute the warrant. The FTSE MIB, Milan’s main index, dropped 5.16% Thursday, and then a mysterious “technical glitch” prevented both the MIB and the all-share index from being released. The raid on the ratings agencies didn’t exactly take away from the conspiratorial edge. After Reuter’s excellent real-time reporting on the event Thursday, other sources have been quick to pick up on the implications. DC-based consultants Sidar Global Advisor predicts that:

There will be strong pressure on credit rating agencies, and the demand for transparency, and further regulation. After Italian police have raided the offices of S&P and Moody`s in Milan, there have been reports on the credit rating agencies` compliance with regulative issues.

True, but I should note that the ratings agencies are seen with extreme suspicion in Italy, as are currency speculators (despite the fact that most of them work to improve the holdings of pension, not hedge, funds). Thanks in part to a general lack of economic education in Italy, ratings agencies and currency traders are routinely blamed for all of Italy’s economic woes, when in fact it is loss of competitiveness, exports and a decade of almost zero growth that, when combined with Italy’s historically high debt-to-GDP ratio, creates a very unpleasant environment for investors. (Not to mention political incoherence/impotence and terrible bureaucracy.)

Simply put, all these factors far outweigh whatever infelicities the ratings agencies may have committed. The raiding of the Milan offices this week is widely seen as a political move designed to discredit the agencies to outside investors. Sowing distrust and confusion is, sadly, a time-tested way of doing politics and business in Italy. Ratings agencies can make mistakes, they too can be political, and they probably need better oversight — but not all of Italy’s problems can be laid at their doorstep and that of the speculators.

Provoking the Unprovocative: Reactions to Norway

As Italy goes into total shutdown for August, I have so much work at the day job that it’s literally made me sick for the past three weeks, but spending more than four hours on the phone with lawyers every day should do that to anyone. Ironically, I have been working on a series of pieces about Scandinavia. I feel like I would be remiss if I didn’t comment on the tragedy in Norway last week.

One of the reasons I started this blog was to write about the growing wave of intolerance in Europe, which was inspired by my stay in a charmingly little intolerant town in the north of Italy in 2008 where I got to wake up to posters like this outside my apartment during election season.

I am surprised, to say the least, at what happened in Norway, and that it happened there. I didn’t think there would be a such a violent outburst — I assumed it would happen more insidiously, more politically — or maybe that’s just how it’s happening in Italy, France and Germany. And certainly, that insidious creep is what bears monitoring, because that’s how intolerance insinuates itself into policy, not through terroristic violence. I can’t say “I told you so” because, actually, I didn’t. But dropping birthrates, stagnating economies, political incompetence (especially in Italy for those of you following the usual three-ring circus; if you’re not, look up Spider Truman) and mainly just rabid fear of difference.

Terrorism’s raison d’être is to provoke a response. So far Norway’s leaders are showing an incredible amount of restraint, calling for more democracy instead of making unfulfillable promises for ramped-up (and usually cosmetic) security that we would see in bigger, more-tech-happy countries. The Nordic countries have led in redistributive social welfare and tech-driven exports in recent history. All eyes will now be on them to see how they deal with the savagery of domestic terrorism. One thing that is certain is that it won’t be with the savagery of the death penalty (which I’m sure leaves many Americans aghast at such an emotional moment), as we dealt with Timothy McVeigh. Probably they will start arming their police, but the further political repercussions will bear close watching. They could even set a good example.

Duomo & Sarpi: stories behind images

In an effort to provide a little context for Magdi’s provocative posters, some reading from the archives in order to illuminate exactly what happened:

"What can be more excellent than prayer?"

The praying at piazza Duomo was connected to protests against the Gaza War and happened on January 3, 2009.  Organizers of the protests say that the prayer was spontaneous.  Coverage in the Washington Post is here.  There was no violence, and the Archibishop of Milan refused to condemn the prayers. As the Guardian reported, the Muslim community actually met with the archbishop and apologized for the prayers.

In the US, the first amendment to the constitution guarantees right to petition, or freedom of public assembly.  In Europe, it is guaranteed by article 11 of the European Convention on Human Rights, if one believes in the authority of European law.

The riots along via Sarpi on April 12, 2007 started when city authorities in Milan began applying fines to the many wholesalers who operated along the street.

Every tree and every blade of grass appears to be enemy soldiers

Milan’s administration has taken care of this issue recently by completely refurbishing the street, and making it pedestrian-only.  Without cars and vans, and with bikes replacing pushcarts, the neighborhood is much more livable now — but arguably one effect the improvements had was to make it more difficult for wholesalers there, who simply moved their operations to side streets.

Elisabeth Rosenthal and Elisabetta Povoledo reported on this for the New York Times, as did the BBC.

According to the story, the Chinese rallied around the flag for lack of a better symbol. Since some commentators have pointed out that laws in Italy are often unfairly applied, I wanted to highlight the penultimate paragraph:

Some experts say that the Chinese in Milan have been unfairly singled out by the authorities, and that the authorities have been considerably more lax with native Italians. When laws are enforced in such an inconsistent manner it becomes a case of discrimination, Lanzani said.

Inconsistent enforcement is at the heart of any debate about immigration anywhere, but above all in Italy, where networks of power flout the very laws they are supposed to abide by time and time again.


Friday AM Roundup

What’s great about Friday morning?  Having the Economist placed at your feet.  And even though this is a blog, sometimes it takes having the paper placed in your hands to do a good scan.

Tying together all the threads

Premesso’s not-quite week in review, drawn from the weekly of record:

1. On February 15, La Padania interviewed Pier Luigi Bersani, PD secretary.  (Shown elsewhere on this blog with his sleeves rolled up.)

Salient quote: Va anche bene che il governo rimanga nell’ambito del centrodestra. “It’s also all right if the government stays center-right.”

Is el Senatur sharpening the knife?

English language coverage.

2. As the holes in the immigration walls get harder to plug, shifting from Ceuta and Melilla to Lampedusa to the Greece-Turkey land border, Greece talks of suspending the Dublin Convention for asylum seekers.  The Economist’s Charlemagne comes out with the following sound idea: “A painful compromise might be tried: if Greece wants to suspend Dublin II, it should accept a temporary suspension of Schengen and the return of border controls.”  Me likey.

3. The Oscars: “this year’s awards are less relevant than ever.”  More need not be said, except that Hollywood need to keep looking to that export market.

4.  In Lexington, Obama’s handling of Egypt gets a look.  Much howling and gnashing of teeth from John Bolton, Niall Ferguson and Michael Scheuer, among others.  But maybe No-Drama Obama was the Decider?

Obama is said to have been more certain in private that Mr Mubarak’s jig was up than America’s public pronouncements (especially those of Hillary Clinton, his sometimes behind-message secretary of state) let on. He flatly rejected the Israelis’ analysis that the Egyptian president could hang on and that America should do everything to help him. Mr Obama’s conversation with Mr Mubarak on the evening of February 1st is said to have been the toughest between an American president and an ally since Ronald Reagan’s scolding of Menachem Begin during Israel’s bombing of Beirut in August 1982.

5. In Schumpter, the uneasy art-business axis is examined.  Damien Hirst is one shrewd businessman.

Damien Hirst was even more audacious. He not only realised that nouveau-riche collectors would pay extraordinary sums for dead cows and jewel-encrusted skulls. He upturned the art world by selling his work directly through Sotheby’s, an auction house. Whatever they think of his work, businesspeople cannot help admiring a man who parted art-lovers from £70.5m ($126.5m) on the day that Lehman Brothers collapsed.

And following in his footsteps in Venice, perhaps the Zero Group?  Stay tuned.

The Chains are Broken, the Knives are Sharpened, the Glock is Photographed

Morning roundup:

Interesting times in Tunisia.  Is it the Arab’s world Gdansk or is that too much to hope for?  We’ll see.  But it’s something.

I was heartened to see that Yglesias also excused himself from blogging extensively on Tunisia for much the same reason that I did: ignorance.  But he goes a bit further and discusses the incentive for high growth in the country,including a quote from Tyler Cowen as well.

On this side of the Mediterranean, the judiciary is coming out against Berlusconi with knives sharpened, talking about trying him as a sex offender.  I agree with Rodotà writing in the Observer back in November that it’s really tiresome how the man seems to dominate the headlines.  There’s just no escape, even when actual revolutions are happening in the next country over.  Annalis Piras, in London for L’Espresso, astutely points out that attempts to defeat Berlusconi legally just make him stronger during elections — which probably will get called early this year.  How to get out of this Chinese finger trap?

Up in Austria, Mr. Glock’s past tribulations seem like the sort of violent betrayal worthy of a Bernhard novel.  Across the waters in the US, our gun-obsessed culture futiley tries to understand madness, criminality and legislation by zooming in on the weapon itself.   I’m not sure why we have this misprision.  There are many reasons but the most overarching could have to do with David Reisman’s assertion that Americans tend to locate things outside themselves, which Margaret Mead also noticed.  While I dig around JSTOR for the original, here’s Todd Gitlin in his introduction to the 2001 edition of the Lonely Crowd:

Mead herself pointed to a passage noting that other-directed conformism predisposed Americans to project power centers outside the self — a reason the paranoid streak in American life loomed so large, and perhaps also a reason Americans were excessively afraid that the Russians would take them over.

What if we just substitute “immigrants” or “socialists” for Russians?  Does that make it clearer, and take some of the blame away from a pugnacious octogenarian Austrian engineer?  I’d hope so.  The Times piece shamefully ignores much of what is true about human society and economics of supply and demand.  Chekhov’s rule may be true in fiction but less so in real life: just because the gun is there, it doesn’t have to be fired.

Serbia, the EU and Muslims in the Balkans

Dutch Courage

The Dutch held out but Europe, as usual, wants to have its way so after a threat to ram Serbia’s EU ‘assessment’ through by majority vote, the Dutch folded.  However, there is a provision that every step of Serbia’s accession will have to be subject to a unanimous vote.  The Dutch, we can imagine, will watch that closely.

It’s hard to know what to say at this early hour, although I’d caution Westerners to pin all hopes on Serbia.  Much analysis has mentioned that Serbia, as the largest and most populous ex-YU state, is the linchpin of the Balkans.  Well, Greece seemed to be the most well-off until recently, and it has hardly assumed a leadership role in the region.  Tadic’s government has done much, esp. in defreezing the lock over Kosovo, but remember that there are blocs — substantial ones — of extremely regressive bodies politic in Serbia that could come to power.  Would Serbia continue to enjoy this prestige of leadership if so?  The lesson is not to conflate territory and population with leadership.

And while I’m at it I’d like to point out the folly of articles like these. (The latter being far more reputable than the former.) Saudi and Iranian money in Bosnia and other Muslim parts of the Balkans (like Macedonia, which the Greek author of the International Analyst Network piece desperately tries to avoid mentioning) is nothing new and dates back to the arms embargo in the 1990s in Bosnia.  Every few years, a journalist sees a pre-fab concrete mega-mosque and wonders if the often-propagated tale that Osama is using these Muslims to try and get ‘into’ Europe is true.  It’s not.  In the mid-1990s, there was an attempt to radicalize Bosnian Muslims.  They rejected Wahhabism and its severe tenants.  A 40% unemployment rate, or even an 80% one, won’t change that.  To pretend otherwise is to toe a chauvinist line.

Soft on Mladic?

'Never again,' right Europe?

Thursday I was excited to see the photo of none other than Ratko Mladic on the cover of the IHT at the newsstand; “he’s been caught,” I thought, “just like Karadzic a few years ago.”  Of course, he hasn’t, and the article spends far too much time on summarizing the case against the general, although there are a few intriguing (and I mean that very literally) details, such as how his men communicated:

As the former protector described the process as it worked in 2006, they discarded mobile telephones and SIM cards 4 kilometers, or 2.5 miles, from their gatherings in crowded places where they could easily blend in. Meeting face to face, they hardly spoke, discussing protection logistics by exchanging written messages that they burned.

But the meat of the matter is up in the lede:

But a softening by several European countries on whether his arrest should be a prerequisite for Serbia’s admission to the European Union is raising questions about whether he will ever face justice.

The idea that Europe would soften their stance on Serbia is repugnant not only to any idea of human rights, but also to the survivors of Srebrenica (and Sarajevo, Visegrad and any other campaign in the Bosnian War). If you don’t believe me, go watch the excellent BBC documentary A Cry from the Grave and its follow-up, Srebrenica: Never Again? I challenge anyone who feels like Mladic is “yesterday’s news” to sit through the whole documentary — particularly the segments in which former UN interpreter Hasan Nuhanovic describes being separated from his family by the Dutch with a quiet, incandescent anger —  and then argue that relenting on the search for Mladic is justifiable under any circumstances.

If that fails to convince, let me allow the Bosnian Serbs to sum up their own position in their own words, through a remarkable interview that Croatian-American New York Times reporter Chuck Sudetic relates in his book Blood Vengeance. The New York Review of Books review is archived on reviewer Mark Danner’s website.

It merits a full quote here.  The narration is Danner’s; the interview Sudetic’s.

Those Serbs that survived, now homeless, penniless, unable even to bury their mutilated dead, made their way to Bratunac. It was there, in 1996, that Sudetic interviewed Mihailo Eric, a remarkable Serb from Kravica:

“After the Christmas attack, when the people from Kravica were refugees in Bratunac, the menfolk were bitter, weren’t they?”

“They were angry…”

“What did they say?”

“Revenge…. They said, ‘Kad tad. Kad tad, sooner or later our five minutes will come.'”

“…And the opportunity finally came.”



“Yes, blood vengeance.”

“Did they come for you?” [He nodded.] “They were excited?”

“Yes. Yes.”

“What did they say?”

“They said, ‘Grab your gun and come down to the soccer field.'”

The soccer field at Bratunac, that is, whence the Dutch hostages heard “a great deal of shooting.” Much of that firing was done by men like Mihailo Eric. As it happens, though, Mihailo himself, a war hero, a man who had been gravely wounded, shot through the forehead earlier in the fighting, refused to take part in the massacre. As he tells Sudetic,

“It’s one thing to kill someone in battle, and it’s something else to kill prisoners, men who’ve surrendered and have no guns.”

“And have their hands tied?”


Mihailo’s attitude, of course, was unusual; had it not been, the war would have been fought very differently. During Sudetic’s interview he and Mihailo were interrupted:

The door behind me swung open. A man with a construction worker’s beer belly stumbled in. He had a ruddy complexion, light eyes, and light hair. It was Mihailo’s father, Zoran; he had been a member of an “obligatory work brigade” called to Bratunac on the day the killings began. We stood up… The father sat down in Mihailo’s chair, and Mihailo stood behind him leaning against a wall.

“Was it honorable to kill them all?” I asked the father.

“Absolutely,” he said. “It was a fair fight.”

Mihailo stared at me from behind him with a forlorn look in his eye.

“Absolutely,” the older man said again, and he turned to the woman: “Get some more brandy.”

In Bratunac, in Kravica, one suspects that the father’s view would be the accepted one. For him, Mladic’s victory over Srebrenica offered an opportunity, a chance to end the cycle of attack and retribution. Having finally conquered the enclave, would one then hand back to the Muslim leaders seven thousand men of military age (who, even if they weren’t soldiers, could easily take up arms) so they could then, or at some point in the future, rejoin the fight—the fight, that is, to regain the homes they had just lost? What, after all, had losing his home done to Zoran Eric and the other survivors of the Muslim attack on Kravica?

No, the moment must be seized, for future survival’s sake; and even Mihailo, though he stood aloof from the killing, freely admits he understands the feelings that lay behind it.

“And they killed all of them [Sudetic asks him], everyone they could?”


“And the Muslims in the column who escaped across the road? They held them up…as long as they could so that they could get some men together and have one more crack at them, didn’t they?”

“They came around looking for volunteers.”

“Did guys from Kravica go?”

“They wanted to kill as many of them as they could.”

“So they could never come back? So there would not be enough military-age men left to fight their way back?”

“Never,” Mihailo said.

The raw motives for ethnic cleansing laid bare: never come back.  Never.  Going ‘soft’ on the hunt for Mladic is letting Zoran Eric’s idea of justice to permeate 21st-century Europe. For many policymakers, the morass of the Balkans sows confusion and there’s always a tendency to do the easy thing, which is so rarely the right thing. Serbia will never be able to rehabilitate properly if Mladic’s capture doesn’t remain a priority, and throwing EU euros at it won’t change that. In fact, I’ll argue that it will enrich and empower the substantial portion of the population who think like Zoran Eric. Many of these young men were on display last week in Genoa and Belgrade. What is their vision of a future Serbia, and does the EU want to condone it?

If France, Germany, Belgium, and Greece cave in on considering EU membership for Serbia in Luxembourg on Monday, they will continue to make a shameful mockery of the lives lost in the Balkans from 1990 to 1999, and do a modern democratic Serbia no favors — Tadic himself says that Serbia (or at least the Serbia that his Democratic party represents) will continue to hunt for Mladic.  Will the EU insist on a lower standard than the present leadership of Serbia?  One hopes not.  Stand up for something, Europe.  At least Srebrenica succeeded in shaming the Dutch into not being pusillanimous.

Greece, of course, would like nothing better for Mladic and Srebrenica to be swept under the rug.  But perhaps this is because Greeks themselves participated in the taking of Srebrenica.  Takis Michas, a Greek journalist with outstanding credentials, has written about that and is now being sued for speaking the truth, by none other than the same reactionary core who wish to rob Macedonia of a name.  Keep reading for more about that.

Swiss Intolerance

If you thought Lega Nord images stereotyping Southern Italians and immigrants were bad, check out this new poster against the opening of Swiss borders to Italian (and other European – presumably Romanian) workers. Given that hordes of Milanese commute to Ticino and vice versa and that, uh, Italian is one of Switzerland’s official languages, this point to paint the Italian as ‘other’ seems particularly desperate. Corriere has good coverage in English, although the article suffers a bit from some self-pity. One wonders if anti-immigration proponents reading this — particularly the bit at the end about American perceptions of Italians a century ago — will note the parallels.

But is the ship really sinking?


Bloomberg has a couple of excellent pieces out this week on what’s going on with the French and German economies. The story of how Germany lately managed to rally its growth and drive down its unemployment rate is of particular interest to the Italian observer, in that a lot of the success seems to have to do with Germany’s Mittelstand — small- and medium-size businesses similar to Italy’s — and the long-term financing that underwrites their successes. (Check out Konrad Adenauer’s grandson taking a nice swipe at those profligate Anglo-Saxons.)

Want to borrow some money?

Germany’s response to unemployment — to have workers work less hours with no reduction in pay — is redolent of how Italian managers of SMEs deal with their problems as well, but obviously more to the story than that, since Italian unemployment keeps climbing and is now nationally at 8.5%, compared to Germany’s 7%. Of course Italy has undertaken labor reform — most famously the Marco Biagi reforms in 2002 — but has not managed to introduce the level of flexibility that Germany has.

The end of the article reminds us that Germany’s export-driven growth and wage depression at home recall China. This is true, but hardly news: Martin Wolf, warning of global deflation, told his listeners this back in March.

European Stereotypes Maps

European stereotypes have been entrenched since at least the time of the first Grand Tour. But as organizational tools, maps have the power to change the way one perceives the world.  Personally, I’ve found alternate maps fascinated by maps ever since getting a Gall-Peters world map sometime in the eighties.  So for a little Saturday morning fun, let me point you in the direction of Bulgarian artist Yanko Tsvetkov’s Mapping Stereotypes website.

But... mummies are in Egypt

It’s an improvement over the ages-old “French courteous. Spanish lordly. Italian amorous. German clownish” saw or the old “in hell everything is organized by the Italians” joke.  In fact, Tsvetkov gives Italy special attention,  subtly highlighting that Italy’s North-South problem and the attendant political use of it is not something confined only to Italy.

Speaking of divided states, don’t miss the visually-funny Cyprus map at the bottom.