The Left needs to dump YOU!

Each left-wing movement in Europe has its own intricansies, but almost all of them were born of the Labour movement. After the industrial revolution, poor people, working class rallied together in center-left parties for more rights like paid sick leave, Universal Healthcare, social benefits. Social democratic parties were the party where the masses rallied in hope for a better life. Now the masses couldn’t be more detached from Social democratic parties. In Britain, the Labour Party is just the third most popular party among the working class, in France, the Front National also leads by a wider margin among working class while the socialist party drowns in popularity with this group of people and the same story happens in the Netherlands, Austria and many other countries. Center left parties are, in some cases, more popular among rich people than with poor people. Why this is happening? Very simple: Center left parties were once the party of the poor, unemployed, the factory worker, the uneducated, disaffected the one who was against the establishment. Now Center left parties are the party of the well connected, the rich, the college professor and the corporate lawyer.

Center left parties had once a clear agenda because they were made by working class people and for working class people; they knew clearly what they want and what were their priorities. They knew their struggles and their problems and wanted to solve them. Now, center left parties aren’t made essentially by the same people as before. They are leaded by elitist people who don’t have a clue how life is outside college campus or big cities. For some of these elitist people, going to a disaffected community or a desindustrialized area may be a field trip or a campaign stop but it will be never be their reality, their struggle, their problems, so working class or people in those communtities will never see them as their own representative.

 

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(”Keir Hardie, a mine worker and union organizer who was one of the founders of the Labour party and was the first labour party member of parliement”)

 

It may sound cool and trendy having flags like helping africa, refugees welcome or ensuring the LGBTQI etc rights, but it isn’t wise to make it cornerstone of any leftist political programme. The proeminency of this thought on the left shows how much globalization has contributed to the detachment of some young elitist proto-politicians. Their Erasmus programme, gap year, or aiesec internship paid by their parents made them get closer from other realities and became more global but, at the same time, forget or underestimate the grim realities in their own community. The talk about ‘’white privilige’’ is a classic example of lack of self awareness within the elitist left. Is the unemployed industrial worker who’s factory was transfered to an asian country privildged? What about the college student who can’t afford university? Is he/she priviledged because of the colour of their skin?

Left elitists like to call tribalists, deplorable, racists or xenophobes to those who dare to raise questions about the integration of refugees or immigrants but they have no idea how is life in tough neighborouds. Locked in their private condos in the best parts of the city, this metropolitan elite has no clue on how life is outside their bubble; they underestimate the insecurity of these areas, the challenges to integrate some communities and the cultural clashes that normally happen.

The critic speech made by Meryl Streep in the Golden globes on Donald Trump was widely publicized in leftist media as being stunning, courageous, vibrant but was it effective? Just as curiosity, Meryl Streep, with a net worth of dozens of millions of dollars wear a dress embellished with gems that costs way more than a normal house and spoke to an audience that is no different than her. An audience that stands up in disapproval because oscars nominees have too many white people but stands in silence about the continuos discrimination of poor whites in reality shows. Meryl talked about her sad feelings towards the style of Donald Trump, forgetting it was the despair, the anger of so many of his supporters about the state of their lives and the incompetence of establishment politicians that made them vote for Donald Trump; they couldn’t care less if some people find his way of expressing themselves offensive or not.

The reader may now think that the election of Donald Trump contrary the opinion in this article because the american President is rich and performed well among working-class. It’s true that Donald Trump is a billionaire and makes no secret about that, but that doesn’t mean elitist. Donald Trump talks about the issues that common people wanna see adressed like jobs and security with a simple and clear language and, above all, talks his mind. Trump was the weapon many ordinary americans saw useful to shake the political establishment. If that will happen or not, it’s another issue, but in the 2016 election the republican candidate was the candidate of the ordinary people because he was able to incorporate it’s problems and talk about it openly.

For some years, with the third way, the left could sideline it’s economic issues in favour of social ones because there was at the same time economic growth, but with the economic crisis of 08’ and the slow recovery, people start demanding to be heard, to be more included in the parties, something that didn’t happen and that is why the leftwing parties didn’t had the sucess they could had after the crisis. The left needs to regain it’s base and will only do it when incorporates these people.

Like a fish can’t survive without water, the left can’t win elections without the working class. Appeal to common people, doesn’t mean just having a more leftwing political programme; There is a urgent necessity of a complete strategic change: It is crucial to ditch the acessory and deliver a simple and clear message that focus on socio-economic justice and improving people’s lives. To start this new kind of politics, the left needs to get rid of the current status quo, break with the establishment in left-wing parties which are a mix of dumb carreirists and detached elitists and start having real people, who can be truly representative ,in politics like small business owners, union leaders, entrepeneurs and solidarity activists.

 

André Branco Pereira, Law student

 

Disclaimer: This Post reflects solely the author opinion it does not represent the whole platform

La Primera de Muchas

17888097_1259379007502561_1214337678_nAyer fue un día triste para el socialismo español. Ayer, mientras seguíamos discutiendo sobre un proceso interno que cada día que pasa nos va enfrentando un  poco más, murió a los 46 años Carme Chacón a causa de problemas cardiacos.

Carme Chacón materializaba gran parte del ideario socialista. De familia humilde, gracias a sus profundas convicciones progresistas, a su gran trabajo como concejala de Esplugas de Llobregat y a su labor como observadora en la OSCE  , consiguió hacerse  un hueco en el mundo de la política. Fue una férrea defensora de la “Nueva Vía” de Zapatero y todos los valores que ella representaba, convirtiéndose en una de los miembros  más populares del gobierno del presidente socialista.

Carme Chacón fue la primera mujer en llegar al cargo de  Ministra de Defensa  en España, pero no fue sólo eso, fue mucho más.

Carme Chacón fue la imagen de una nueva  España, de una España que dejaba atrás las viejas formas del pasado y se montaba en el tren del siglo XXI con destino a una nueva configuración de la estructura social; donde las mujeres, las minorías  y la tolerancia… ahora sí, irían adquiriendo poco a poco un papel de mayor protagonismo en la vida pública. Una España que pasó de envidiar las políticas sociales de sus vecinos de Europa, a convertirse en todo un ejemplo  en  materia de igualdad, de libertad de religiosa  o de ayuda a la dependencia.

Carme Chacón fue una mujer valiente, valiente y trabajadora, que lidió y se sobrepuso frente a  los más desazonados  comentarios del sector más arcaico y primitivo de la sociedad española. Carme fue aquella mujer que a los 5 días de su nombramiento como ministra, estando embarazada de 7 meses fue a visitar a las tropas españolas en Afganistán y la que desde aquel día volvió a hacerlo otras 17 veces, derribando prejuicios y abriendo mentes. Fue la misma que se presentó a liderar el PSOE en unas primarias, elevando el nivel del debate de forma exponencial, y que tras su derrota (con el 49% de los votos) contra Alfredo Pérez Rubalcaba, dejó  paso sin obstaculizar, arropando a su compañero en todo momento y dándole su apoyo. Fue una mujer que luchó día a día por construir un país diferente, un país donde las mujeres pudieran decidir ser iguales, un país en el que el partido socialista mantuviera en primer plano la contienda contra el machismo y la violencia de género, un país donde se entendiera que no hay ningún hombre detrás de los logros de una mujer. Por todas estas razones y muchas más, ayer fue un día triste para el socialismo. Y mañana lo seguirá siendo.

¡Manden firmes!

Vicente Gutierrez Ortega

¿Un Erasmus a Los 16 Años?

El pasado sábado día 25 de Marzo, se cumplía el 60 aniversario de la firma del Tratado de Roma que dio origen a lo que hoy conocemos como Unión Europea.

Si volvemos la vista atrás para ver cuánto se ha avanzado, podremos observar que ya  han pasado 30 años desde que por  primera  vez  un estudiante europeo cogiera sus maletas y enfrentándose a lo desconocido  hiciera “un Erasmus”. No resulta descabellado pensar  que aquellos que marcaron la senda del programa  más popular entre  estudiantes  europeos , al principio, lucharían contracorriente para poder emprender su aventura hacia tierras europeas.

Continue reading “¿Un Erasmus a Los 16 Años?”

Men as Victims of Intimate Partner Violence: an Undiscussed Tragedy

Are you really going to let a woman beat you up?’

This was the question posed by a Finnish emergency telephone number operator in 2009 to a frightened man who was calling to report that his wife was physically assaulting him (Kaleva, 2010). It is disturbing to think about what was taking place. The man had previously had to escape to a safehouse with his children in order to get away from his abusive wife. When he returned to retrieve clothes for himself and for his children, his wife attacked him again, and when he tried to get help, he was mocked (ibid.). This man’s cry for help over the phone serves as a great j’accuse against our very society, and our common way of thinking: the case received widespread publicity in Finland, and led to temporarily increased discussion about those cases of intimate partner violence (IPV) where men are the victims. Sadly, the topic is still largely ignored, not only in Finland, but in other countries and on the international level as well.

The emergency telephone number operator’s reaction is part of a troubling phenomenon where men’s experiences of violence are belittled. Many men are embarrassed about being victimised by their partners, and they are often afraid of the results of speaking out. It is easy to see why. Indeed, just as vast numbers of female victims of the same brutality remain silent, it is likely that most male victims of IPV do not report the crimes committed against them. As a result, the suffering of men at the hands of their partners is often either ignored or forgotten about. Indeed, sometimes it is even glorified: countless films, TV series, and other culture products use portrayals of IPV committed against men for comic relief. We have all seen this far too many times. Somehow, seeing a man being slapped or kicked by his partner is perceived as being humorous. In reality, there is nothing amusing about domestic violence, no matter who the victim is, and no matter who the perpetrator is. All human beings, without distinction, have the right to safety.

Portraying IPV against men in a humorous way is also problematic from a cultural and social perspective: by constantly showing boys and young men that their minds and bodies are acceptable targets of violence, our society is socialising males into condoning brutality committed against them. The mental and social well-being of males is thus at best delegated to a mere footnote. As a result, many men who face IPV believe everything is, in some perverted way, just as it should be. It is funny when men are attacked, you see. Matters are made worse when a man has children who see their father being assaulted at home, while he continues to pretend that nothing is wrong. Thus, the vicious cycle of abuse is in danger of being strengthened and continued in the next generation. This is a massive failure on the part of our existing social reality.

IPV takes place in all kinds of relationships, in all social classes, ethnic groups, and all over the world. Indeed, IPV is present in both opposite-sex and same-sex relationships. Often women are attacked by men, sometimes women are assaulted by women, in some cases men are attacked by women, and sometimes men are victimised by other men. Since a great deal of IPV experienced by both men and women goes unreported, it is unclear how many relationships are violent. Thus, even the best surveys fail to reveal the whole truth, but they do give some valuable information. In America, according to the National Intimate Partner and Sexual Violence Survey carried out in 2011 by Matthew J. Breiding et al. (2011), ’severe physical violence by an intimate partner (including acts such as being hit with something hard, being kicked or beaten, or being burned on purpose) [is] experienced by an estimated 22.3% of women and 14.0% of men during their lifetimes’. According to a research by Markku Heiskanen and Elina Ruuskanen (2010), 16 % of Finnish men have experienced IPV. In the United Kingdom, data from Home Office statistics and the British Crime Survey show that between 2004 and 2005, and between 2008 and 2009, approximately 40% of domestic violence victims were male (Campbell, 2010). Thus, while as a whole women seem to face IPV more often than men, the fact remains that a significant number of victims are male. In light of this fact, how little this topic is discussed is truly worrying.

In recent years, awareness about violence against women has laudably been raised. The shameful phenomenon of men brutalising their female partners sexually, physically, or mentally, or even killing them, has become a widely discussed and examined issue, as it should be: there is nothing acceptable, virtuous, or honourable in assaulting one’s partner. Seeing women’s bodies as objects that can be used and abused at will is disgraceful and disgusting. The fact that the President of the United States of America has openly admitted, without showing any remorse, that he has committed sexual assault against women only goes to show that there is still far too much work to be done in teaching humanity about each and every woman’s right to safety. That this is part of our reality in 2017 is truly distressing.

Though much remains to be done with regard to protecting women’s bodies from abuse, similar advances must be made in raising awareness about violence committed against men as well. Our society often thinks men can just ’take it’, no matter what ’it’ might be. If a man faces IPV, it is often thought it is probably his fault, or at the very least, something that does not really, truly matter. He is alive, is he not? While many men are indeed mentally remarkably strong, and capable of withstanding tremendous pressure, this is not a quality shared by all, and even if were a universal ability, IPV is something nobody – without any distinction – should be forced to face, under any circumstances, ever. Therefore, why should we be so eager to disregard the experiences of men who have suffered IPV? If our generation allows this social issue to remain undiscussed, how will we explain this failure to our future children? If we do not condemn the most egregious flaws of our society, our children will, and they, together with history itself, will also condemn us for having failed to address those flaws in the first place.

About the author: Erik Immonen is the Vice-President of the Social Democratic Students of Helsinki and a proud graduate of the second edition of the School of Democracy.

References:

Breiding, M. J.; Smith, S. G.; Basile, K. C.; Walters, M. L.; Chen, J.; Merrick, M. T. (2011). Prevalence and Characteristics of Sexual Violence, Stalking, and Intimate Partner Violence Victimization — National Intimate Partner and Sexual Violence Survey, United States, 2011.

http://www.cdc.gov/mmwr/preview/mmwrhtml/ss6308a1.htm?s_cid=ss6308a1_e

Campbell, D. (2010). More than 40% of domestic violence victims are male, report reveals.

https://www.theguardian.com/society/2010/sep/05/men-victims-domestic-violence

Heiskanen, M. & Ruuskanen, E. (2010). Tuhansien iskujen maa. Miesten kokema väkivalta Suomessa. 

http://www.heuni.fi/material/attachments/heuni/reports/6KHnLcUwR/Full_report_66.pdf

Kaleva. (2010). Hätäkeskus perheenisälle: Otat sä naiselta pataan, 

http://www.kaleva.fi/uutiset/kotimaa/hatakeskus-perheenisalle-otat-sa-naiselta-pataan/169430/

#EU60 Proposals

The occurrence of the 60th anniversary of the Treaty of Rome offers the opportunity to both celebrate the successes reached so far and reflect on the future of the European project. As a result of the vision of the European Community’s founders, today Europe is a more prosperous and peaceful continent.

While taking pride in these conquests, there is no space for complacency: the future of the European project is at risk. From an American administration not supportive of the European Union to the threat posed by terrorism, external challenges abound. These problems are compounded by a generalised loss of confidence in conventional forms of politics and the European project, which feed populism and narrow nationalism across the continent.

As young European progressives, we believe that it is not possible to stand by while sixty years of European integration are put under discussion. Bold action and reforms are needed. Institutions more responsive to the people of Europe, new opportunities to rejoice in our shared identity and the forging of a more just, sustainable and secure Europe all go in the direction of a stronger European Union, a Europe that can look at the future with confidence.

 

Part A: European Institutions

A number of European institutions whose actions are often not felt by Europeans, as well as increased bureaucracy, have resulted in widening the gap between citizens and the decision makers. We want to target this institutional crisis by:

  1. Reforming the EU so as to increase its efficiency and credibility. It must be closer to its citizens, in order to improve transparency. A multispeed EU can permit the integration of some member states without affecting others. This can increase public support, as the EU will be seen as an opportunity rather than an imposing actor.
  2. Decentralizing some of the decision making that is currently conducted in Brussels and giving more credit to the member states and subnational entities, which are closer to the everyday life of people. The EU should always respect the result of democratic elections and give elected leaders the room to pursue their own policies, also at the national and subnational level. Simultaneously, this places responsibility on these entities: their failure is to blame on themselves only, not on the EU.

Part B: European Citizenship

Solid foundations for the future of the European Union are not only the result of better institutions but depend on a shared European identity. With the aim of furthering the understanding among European peoples and of better appreciating our shared history and values, we propose:

  1. Actively promoting the core European values through Member States’ educational systems. These include, but are not limited to, Openness, Inclusivity, Diversity, Democracy, Rule of Law and Human Rights. Should the EU wish to remain the most ambitious project of integration between peoples, it should promote the creation of physical spaces to stimulate dialogue between people.
  2. Increasing spending on higher education and lifelong learning -especially focused on the acquisition of languages, IT and technical skills. So far much has been said about Europe as a ‘knowledge economy’, but too little has been done to achieve this. Technology changes fast and the skills of people cannot stay behind. EU social funds need to be used to help entrepreneurs starting a business. The corporate sector is welcome to contribute as part of their CSR initiatives.
  3. Expanding the Erasmus + studies program to 16-year-old students and providing guidance to the relevant actors on how to get all the grants and programs they can currently benefit from.

Part C: Building a safe Europe

In an era of several diplomatic cases of abuse where authoritarianism is thriving in neighbouring states, the safety and unity of the European community heavily depend on its capacity to collectively defend its borders by:

  1. Acting as a proud and united global actor. This includes strengthening the EU military, cooperation on cyber security and terrorism prevention, and closer region-to-region partnerships with the African Union. Also, the EU must revise the modes of integration with third countries, in order to increase partnerships with mutual benefits and reduce the insider-outsider duopoly.

Part D: A sustainable Europe for future citizens

Europe’s security and future highly depend on how it deals with climate change. Given the current American administration’s lack of willingness to face off this great challenge, it is time for Europe to take a lead and set the path towards a more sustainable future. With this in mind, we propose:

  1. Taking back our role as the global leader in the fight against climate change and in the implementation of the COP21 agreement. In doing so, the EU needs to phase out lignite and coal burning, abandon nuclear energy and diesel, while investing in renewables. The green and the circular economy will create many new jobs that can replace those lost by ceasing polluting activities.
  2. Adopting an ambitious EU infrastructure investment policy. We believe that policies in this domain should be more focused on the long-term objective of creating a sustainable, green and inclusive Europe. Thus, we call for EU investments to integrate and modernize the European railway network, because this upgrades the cleanest mode of transport, improves connectivity, creates jobs and stimulates the economy.

Part E: Society

Even though the survival of the EU should be the priority, it makes little sense to keep the project alive while not ensuring harmonic, progressive and prosperous societies, aiming at the welfare of their citizens. Bearing that in mind, we propose:

  1. Supporting the institution of a real European Social Pillar. The EU policy has been guided by macroeconomics and lost sight of the social component for too long. All policies should be tested on their social impact, and aim to create jobs and reduce poverty. The Fund to the European Aid of the Most Deprived (FEAD) must be used more to compensate those who have economically suffered from Globalization.
  2. Being a cohesion actor so as to maintain European unity and peace. EU membership must bring more benefits than disadvantages to all concerned parties. Concrete policies to benefit all might include a compensation scheme for countries that have been struck by brain drain or extending 4G internet coverage to all citizens of the EU, including those who reside in the most disadvantaged or remote areas.
  3. Discouraging unpaid internships to the youth. Europe is a rich and progressive continent, where systematic exploitation should not be tolerated. Labour needs to be rewarded even if it is done by young or inexperienced people.
  4. Establishing directives for the progressive increase of the budget for Research and Development among all member countries.

Part F: Economic Policy

 Economic policy should be a means to the end of a more cohesive European Union, where there is solidarity among countries, generations and social groups. The European project shall be a source of prosperity for everyone. To this end, we propose:

  1. The cooperation of European countries so as to avoid tax competition and establish high taxation standards. Tax havens for big companies should no longer exist in the EU and no cooperation shall be entertained between the EU and tax heavens. An increase in transparency and taxation of profits in the countries where they are made will contribute to a more just Europe. Finally, a minor EU tax for companies acting within the single market could be established, and create the basis for a European fiscal revenue.
  2. A reform of the Euro Area would bring the members of the common currency area back to the ideals of shared prosperity and solidarity underlying the Treaty of Rome. This would be to everyone’s interest, not just of those countries that are still suffering from the dramatic social consequences of the 2009 Euro crisis: a more prosperous Europe is going to be a more harmonious Union. The institutions of the Eurozone have to change, starting from the ECB’s mandate so that in its monetary policy takes into account not only stable inflation but also full employment. In the presence of a common monetary policy, there is also the need for some forms of fiscal policy.
  3. Making the EU trade policy more transparent and aimed at enhancing EU standards globally.

 

The Budget of Fear and Individualism

An overview

Trump’s first budget proposal is out, one of the most expected budgets ever in american history that symbolizes Trump’s campaign motto: “Make America Great Again”. In case people doubt about it he made sure people would really see that on this budget by labeling it as “America First: A budget blueprint to make America great again”. As promised during his whole campaign he will do everything in his capabilities to shift priorities in Washington to make the American society safer, stronger and prosper while making other nations fear his administration. Does this budget represents this?

Yes, the most absorbing fact of this budget proposal is the fact that there will be a $54Bn. increase in the defense department with the goal to buy more jets, warships, and boost the military activity against ISIS. That will also be of the like of the Defense Industry that has ties to the Republican party. To balance the budget this massive increase in defense and military will be offset by a huge decrease across all others departments

Captura de ecrã 2017-03-18, às 15.20.22

(US Gov Departments expenditure, source: Washington post)

As we can clearly, Trump’s administration represents an inversion in what has been American policies in the last 8 years during Obama presidency. Cuts for almost every department except the Defense, the Homeland Security and Veteran Affairs departments. This ultra conservative and anti government intervention is clearly emphasized in this budget, specially when looking at the EPA department that will be the most affected one (in %) according to this administration hardline stance on global warming. Another way to look at this is seeing the decrease of nearly $10.1 Billion at the State Department which goes along the isolationist mindset that is reshaping american politics.

Proposals and a new paradigm in American policy

As we can see in the table above, Trump administration will do several large cuts in some key departments like the State, Labour and Education departments.

Among the major program cuts implemented by Donald Trump we have:

-The elimination of the USDA Water and Wastewater loan and grant program, a reduction of $498 million.

-The reduction or elimination of 20 programs within the Department of Education including Striving Readers, Teacher Quality Partnership and Impact Aid support payment for federal property and international education programs.

-Cuts FEMA state and local grant funding by $667 million, including the Pre-disaster Mitigation Grant Program and Homeland Security Grant Program.

-Eliminates funds for Section 4 Capacity Building for Community Development and Affordable Housing.

-Ceases payments to the United Nations’ climate change programs for the Green Climate Fund and other funds.

-Scales back funding for the World Bank and other international development banks by $650 million over three years.

-Shrinks the Treasury Workforce by an unspecified amount

-Stops funding for the Clean Power Plan.

These measures like the elimination of funds for affordable houses and education show that Trump will do major cuts in several traditional welfare sectors contradicting his electoral promises of giving better living conditions to the American people being not so different of many traditional Republican proposals that refuse the government intervention in these key sectors. Another sector in which this can be seen is in health with the removal of the Patient Protection and Affordable Care Act, known as Obamacare, which will mean that many Americans will become unable to pay health insurance meaning they cannot be assisted if they have an emergency health problem and will also become unable to pay treatment for oncological and chronic illnesses. Despite Trump’s promises that Obamacare will be replaced by something better until now, no concrete proposal was made.

Less surprising is the decrease in funds for Climate, Development and Migration issues. On these subjects Trump presents a populist evolution of the Republican stances by ignoring or in some cases, even denying the existence of some of World’s major problems, in a contrast with a more internationalist and interventionist position taken by the Obama administration.

As it is typical in a nationalist budget proposal this also marks a shift is the balance of the United States policy that will give now less importance to Global Affairs and more importance to Internal Affairs following the concern of many Americans that worry about their living conditions and jobs but not about a war in some Middle East country or a big natural disaster in Asia.

In the limit this could mark the return of an isolationist America. This can appear surprising if we consider the United States policy after the Second World War but in fact if the US was quite isolationist and protectionist during the XIX century and most of the first half of the XX century. However unlike in the XIX century this position is now much more irresponsible because some problems like the Climate Change, Islamic terrorism and the Migration crisis are global and require agreements between the World’s most powerful nations, among which is included the United States, in order to overcome them. There is also a moral imperative because the United States has responsibilities in some of this problems specially in Climate Change and in the instability in the Middle East.

Economic prospect

Above we’ve seen how the budget might be for the next year, but numbers alone don’t mean anything, however if we take into consideration its implications for the american economy now that’s something even more interesting to think and look at.

One of the most famous economists ever, that is still a reference in our days, John Maynard Keynes said that Aggregate demand, in other words, a country GDP is represented by the below equation:

Y= C+G+I+Nx, where Y is the country output (we refer it as GDP most of the times), C is private consumption, G government spending, I is Investment and Nx is Net Exports ( Exports – Imports).

Taking into consideration the proposed budget G will decrease in 2018 due to government slashing some expenditure on social programs, as a consequence many poor families will lose their subsidies which will make them poorer, and since Investment is divided between private and public, we see that it might have a negative variation (seeing for example the Transport Department projected expenditure variation). With this in mind we could already see that, all things remaining constant, American 2018 GDP might degrow a bit, however there is still one thing to take into consideration, which is Net Exports, for that we need to take into consideration the effect of the Interest Rate and Exchange Rate.

Last week, we saw an announcement by FED’s president Janet Yellen stating that FED interest rate will rise from 0,75% to 1%, which has its economic consequences.

fig32

(Exchange Rate, Rate of Return, source:University of Colorado Boulder)

Represented in the image above, we have the vertical line which is the domestic interest rate, the horizontal line the foreign interest rate, the vertical Axis the Exchange Rate level and the horizontal Axis the expected rate of return. We see that an increase in the american interest rate (From left to right) will mean an higher expected rate of return of american investments. This means that the dollar will be more desirable and demanded which will trigger it’s value, that is to say, it’s exchange rate goes up, a dollar now is worth more Euros, Kwanzas, etc.

This interest rate hike and consequently Dollar appreciation might deteriorate American Net Exports, since the dollar is now more expensive and so are the american products.

This combination of raising interest rate while cutting government expenditure can lead to a deceleration of the american economy in 2018.

In the end, we should bear in mind that this is just a budget proposal and needs congress approval to become a reality. Even though it is creating some divisions among republicans this proposal seems a plausible budget and it seems likely to be approved by a congress in which Republicans have the majority of the seats. This is a budget proposal that represents fear, individualism and isolationism focusing on military activity, instead of supporting social, education and healthcare programs that can be a social uplift for many poor families and improve the living conditions of many americans. Sectors like the environment are also ignored by this budget proposal. These measures will not only be negative for the economy because it lacks enough of a stimulus, but will have the likely result of dividing and polarising even more the American society which can create more social unrest special among the poor and minorities.

 

Luís Carvalho, economics student and proud 2015 graduate of democracy

Pedro Diogo, economics graduate

Disclaimer: This Post reflects solely the author’s opinion it does not represent the whole platform

A Guide to the Dutch Elections

The Dutch elections feature the European version of Trudeau, a hardline Dutch version of Marine Le Pen, the current head of an extremely unpopular government who is polling at half of his weight back in 2012, a Christian Democrat who is suddenly considered as his more reliable alternative on the centre-right, and the evergreen pro-European progressive liberal. What is more, all the parties headed by these leaders currently average between 11% and 16% of the polls, making this the most uncertain election in years. The main electoral themes are social security, the pension age, healthcare, education, immigration and integration. Only to a much lesser extend the environment, Europe and the global geopolitics are being discussed during the campaign, as these items are not considered a priority by most voters.

Continue reading “A Guide to the Dutch Elections”

Juncker’s White Paper: The Implications for CSDP

On March 1st European Commission (EC) President Jean Claude-Juncker presented his White Paper on the Future of Europe. The aim of the Paper is to line up 5 potential scenarios for the European integration varying from more deepened federalist-like union to less tight, minimalist economic cooperation. The timing is also not a coincidence: it can give some food for thought for the Rome summit on March 25th celebrating the 60th anniversary of the establishment of the European Economic Community. The Paper received criticism from the left, especially from Gianni Pittella S&D president for not giving a clear indication on what is the EC’s preferred way forward and not committing itself to a more advanced, integrated Europe.[1] There was also a reserved interest from the in-generally EU establishment critical Visegrád 4 countries (Poland, Czechia, Slovakia, Hungary) warning against the disintegration, while in the meantime not committing themselves much towards further integration either.[2]

Continue reading “Juncker’s White Paper: The Implications for CSDP”

The advance of economic patriotism

The last few days in Europe’s business community have been turbulent. For once it was not about the impact of the new American administration on the European economy, but about acquisitions. Big ones. Where many of us were worried about “America First”, it now seems that in Europe something similar is happening. Not Europe first or Brussels first, but the UK first, the Netherlands first, and Germany first. The developments of last week might prove to be characteristic for the future of Europe’s economy.

The most important news of last week was the failed attempt by American food giant Kraft Heinz to buy its Anglo-Dutch rival Unilever for the price of 143 Billion USD, which would Continue reading “The advance of economic patriotism”