Switzerland considers pegging to the euro

With the world's main currencies in crisis, the historically stable Swiss Franc has exploded in value over the past year. This has had a disastrous effect on the Swiss economy, as its exports and tourism industries struggle under the effects of a drastically overvalued franc.

This was in clear evidence earlier this month when I took a trip on the Glacier Express train across the Swiss Alps with my father. Ordinarily this scenic tourist train would be packed in August, having sold out months in advanced. But our train was nearly empty. When we finished our journey in Zermatt, home of the Matterhorn, the city was dead quiet. It looked like three-quarters of the rooms in our hotel were vacant.

It makes sense. After all, who can afford a vacation in Switzerland these days? It was already an incredibly expensive country, and the current exchange rate close to one euro to one franc (three years ago it was 60 cents to one franc) makes it unaffordable for most tourists from France, Germany and Italy. When my father moved from the US to Zurich in 2006 the exchange rate was 80 US cents to one franc. Today it's $1.37 to one franc. Given that a value meal at McDonalds costs 15 francs ($20), it's a difficult place to be if you don't make a Swiss salary.

Britain's teenage riot

London was ablaze last night as an unprecedented wave of violence and looting spread throughout the city, spreading to other cities in England. It was the third day of rioting in London, initially sparked by the police shooting of a young black man in Tottenham last week. But last night saw the situation explode and quickly spread after the government and the police appeared to lose control of the situation.

The rioters carrying out the violence were mostly children, teenagers in hooded sweatshirts covering their faces, bashing in store windows and setting cars on fire. I've written before about how Britain is terrified of its own children. Last night was a shocking manifestation of that problem. A 2008 poll showed that more than half of British adults are afraid of British children, believing they behave like animals and pose an increasing danger to themselves and others.

The images from last night are truly shocking, particularly the fires. It was the largest number of simultaneous fires London has seen since the blitz. There were reportedly children as young as seven taking part in the violence. What precipitated the violence was the fatal police shooting of a young black man last week in Tottenham. The police say he had a gun and was shooting at them, but his family says he was unarmed. The facts surrounding the case are still unclear.

Europe's choice: anger voters, or drop the euro

The Eurozone's finance chiefs took the extraordinary decision last night to "actively" buy up Italian and Spanish bonds, in a last-ditch attempt to try to stop the market freefall that is spiralling out of control. Following the downgrading of the United State's credit rating for the first time in history over the weekend, everyone is waiting this morning with baited breath to see whether the good news of the European bond buy-up will be enough to outweigh the bad news of the American downgrade.

The decision to have the European Central Bank buy up Italian and Spanish bonds is a huge step toward  fiscal union in Europe, and it did not come easily. Last week it looked like Europe's leaders were intending to reject any such move when they announced Thursday that they would buy only Irish and Portuguese bonds. This was effectively pointless because both of these countries are already getting EU bail-outs, and the markets took it as a sign that the ECB would not buy the Italian and Spanish bonds. This caused a panic, the bond yields of those countries plummeted even faster than they were earlier in the week.

The heart of the problem is this: the markets are demanding that the EU rapidly establish stronger fiscal union so that individual states don't collapse under the debt crisis and bring the common currency down with them. Essentially, the European Central Bank needs to take on the debt of the struggling economies. But European leaders are resisting doing so because the public mood for further European integration is so low right now. 

Is America too old to function?

One of the most frequent clichés I hear as an American living in Europe is that the US is a 'new country' while nations on this continent are 'old'. It is usually used to explain away American peculiarities, as if the US is a naïve child who just hasn't had the time to attain the wisdom of the more mature, centuries-old European states.

But however often it's repeated, this common wisdom is patently false. As a country, the United States is older than the vast majority of European states. At the time of the US declaration of independence in 1776, the states of Belgium, Germany, Italy, Finland, Romania, Slovakia, Greece and Latvia had all never existed yet in any form. And that's just to name a few. The fact is that European nations are actually quite young - and that is what makes them more agile in the face of modern problems than the United States.

Even the European countries which did exist in some form in 1776 - such as Spain, Portugal, the Netherlands and France - today barely resemble what they were at that time. The Kingdoms of France and Portugal in 1776 are now republics with completely different systems of government. And going in the other direction, the Dutch Republic in 1776 - a loose confederation of provinces - bears little resemblance to today's Kingdom of the Netherlands.

The US has had the same governing structure since 1789, the date that marks the founding of the current American republic with the adoption of the US constitution (which replaced the previous Articles of Confederation in place since 1776). The US has used the same government system since then. Contrast this with France - whose current republic has only been in place since 1958 – or the Federal Republic of Germany, which dates from 1949. Other founding dates of current European government systems include: Italy – 1947, Spain – 1978 and Poland – 1997.

In fact the only European governments that could legitimately claim to be older than the US government system are the constitutional monarchies of Britain, Denmark and Sweden – but even this is arguable since they have had significant constitutional changes over the past 200 years.

Where does the Norway shooting leave Europe’s conservatives?

Last week’s far right terrorist attack in Norway has prompted a lot of questions in European capitals, and many of the hardest questions are being asked inside the party headquarters of Europe’s center-right. Many of Europe's conservative parties have spent the last few years courting the far right vote, by co-opting some of their messages on immigration and cultural identity issues. In several countries including Denmark, Italy and the Netherlands the mainstream conservative parties have even allied themselves with the far right and invited them into governing coalitions. After the Norway attack, are those days over?

To answer this question, one must understand the current political balance in Europe, and why it has come about. Conservative parties now dominate the national governments of Europe as well as the EU institutions, relegating the left to just a few Southern countries. The Guardian put out a great interactive map today where you can trace Europe’s left-right balance over the past 50 years. Contrast the map just ten years ago in 2001 on the left with today’s situation in 2011 on the right (left-of-center in red and right-of-center, including Liberal parties, in blue). Considering that Spain and Greece now have their policies dictated to them by their conservative Northern European creditors, the left has effectively disappeared from Europe.

So why has Europe veered rightward at a time of economic crisis? There are probably many contributing factors – but the biggest cause is the complete disarray of the European left. From Scandinavia to Germany to France to Italy, European Social Democrats are in complete chaos, torn by infighting, a lack of enthusiasm and confusion over ideology. Europeans have voted conservative not because of some great ideological shift toward economic liberalism and laissez-faire capitalism. They have done so because the parties of the left have not offered any credible alternative for governance.

Ireland's dramatic fallout with the Catholic Church

The Vatican took the unprecedented step of recalling its ambassador to Ireland on Monday following a fiery speech from the country's prime minister denouncing the church for covering up cases of child sex abuse. The row is an indication of just how much Ireland, once a loyal foot soldier for the pope, has changed over the past two decades.

The fiery speech on the floor of the Irish Parliament by Prime Minister Enda Kenny last week was in reaction to the government's latest report on sex abuse in the Irish church. The report found that the Vatican had deliberately tried to downplay and cover up the rape and torture of children by priests in Ireland, and found that it was doing so as recently as 2009. It also found that the Vatican was trying to interfere with the Irish government's investigation into the matter. This was apparently all too much for Kenny. Denouncing the "dysfunction, disconnection, elitism and narcissism" of the Vatican, Kenny told the parliament:

"This is not Rome. Nor is it industrial-school or Magdalene Ireland, where the swish of a soutane smothered conscience and humanity and the swing of a thurible ruled the Irish-Catholic world. This is the Republic of Ireland 2011. A republic of laws, of rights and responsibilities; of proper civic order; where the delinquency and arrogance of a particular version, of a particular kind of 'morality,' will no longer be tolerated or ignored."