SocGen: Europe’s Enron?

As the Economist points out today, it’s quite a feat to push France’s attention-hungry president off the front pages these days. But a young low-level trader in Paris has managed to do just that.

Last week it emerged that a rogue trader named Jérôme Kerviel has cost France's most venerable bank, Société Générale, more than $7-billion. For France, and indeed for all of Europe, Kerviel’s story has been captivating. Those at the top of the economic ladder see him as an evil genius, a scheming traitor who duped his vigilant employer by hiding his thieving through complex manoeuvring. Others, particularly on the French left, see him as a modern day Robin Hood, exposing the weaknesses of French capitalism.

Though SocGen, the biggest economic success story in a nation known for its mistrust of capitalism, has tried to portray the crime as genius in its deception, Kerviel’s own court testimony reveals that it was anything but. According to the French press, Kerviel has testified that his thieving began as early as 2005, merely by creating fake trades and pocketing the money himself. He also says it should have been obvious to his superiors because he was openly reporting making as much as €600,000 in a single day, a ludicrous amount for a trader to be making legitimately.

The return of Berlusconi?

The past week has been a shattering, if not entirely unexpected week for Italy’s center left. The country’s premier, Romano Prodi, resigned last week after losing a confidence vote in the senate.

Today Italy’s president Giorgio Napolitano met with Prodi’s arch rival, controversial conservative leader Silvio Berlusconi, who has been demanding early elections in which he could potentially reclaim power.

Prodi had been in power for two years, and in some ways it was surprising he had even lasted that long. His center-left coalition won power in April 2006 with a slim majority, and even then his fractious coalition seemed doomed from the start. In February 2007 Prodi had to resign as prime minister after losing a key foreign policy vote over Prodi's stance that Italy should continue to provide troops in Afghanistan, and over Prodi’s support of an expansion of an American military base in Vicenza, in northern Italy. Prodi then had to form a new government to hold on to power.

EU considers concession to Serbia to influence election

The diplomatic maneuvering over Serbia’s upcoming election got a little more interesting today. It has emerged that the EU is considering signing an ‘interim pact on trade and cooperation’ with Serbia before the February 3 presidential election.

The move is an attempt to give a boost to the pro-Europe incumbent, Boris Tadic. It is also a first step in granting concesions to Serbia (toward its entrance into the EU) in exchange for it allowing the breakaway republic of Kosovo to declare independence.

This type of interim pact would normally not go into force until the EU signed a Stabilisation and Association Agreement with Belgrade, but such an agreement requires the signature of all 27 member countries and the Netherlands and Belgium have refused to sign it unless Serbia hands over a war crimes suspect, former Bosnian Serb military commander Ratko Mladic, charged with genocide for the 1995 Srebrenica massacre of 7,000 Bosnian Muslims. Serbia has refused to do so.

British MEPs say global warming is bunk

It strikes me that if people in Britain actually knew anything about their MEPs (Member of European Parliament) they might be a bit embarassed about some of the things that come out of their mouths. But seeing that the British often hand-select MEPs who don't think the European Union should exist at all, it shouldn't be surprising that they might say some things to offend.

The climate change plan has been the pride and joy of EC President Barroso, since he sees it as a sure-fire way for the EU to gain popularity. Many have pointed out that in order to restore the European public's trust and enthusiasm for the EU project, the union needs to highlight the areas in which union would do the most good. Since the economic arguments don't seem to be making much headway with the broader public (in fact it's been used as a main criticism of the EU, only protecting business interests and all that), the two areas which would be popular would be global warming and protecting the public from terrorism. Only a large block with a unitary policy could make real productive progress in either of these areas.

Janet Daley on the UK's obsession with the US election

This was a very funny piece on NPR's On the Media this week. The Daily Telegraph's Janet Daley gives her take on why the UK has been obsessed with this presidential election. You can listen to it here:



But there's three important things I think Daley didn't mention:

1) The UK isn't alone in its fascination with this election cycle, this has been a world-wide phenomenon and especially true in Europe.

2) The UK's foreign policy is inextricably linked to that of the US, insofar as the UK has to do whatever the US tells it to. So Brits have a huge stake in this election.

3) The US election result in 2004 was a complete shock in the UK. For whatever reason, all of the media coverage here in the runup to the vote was saying that Bush was finished. I remember all my British friends talking at the time as if it was a sure thing Bush would be voted out, when the reality was it was anything but certain. So this time around, the Brits are making an effort to pay closer attention so they don't have the rug pulled out from under them again.

I wonder if the inordinate amount of US election coverage here will make some Brits think about how unfortunate it is that the outcome of an election in which they are not allowed to participate will have a huge effect on their lives. Or, perhaps it will result in a hunger for a new kind of politics in Westminster, as Daley seems to be suggesting here.

EU unveils climate change package

At long last, the European Commission unveiled its much anticipated energy and climate change package today, and it's a doozy.

As reported on Certain Ideas of Europe, the plan promises to deliver steep cuts in greenhouse gases, job security for heavy energy users like steel works, a whopping increase in renewable energy production, lots more biofuels and greater energy security, with reduced dependence on unstable energy suppliers. The overarching theme is to make Europe the leader in combating global climate change.

But as the Economist points out, even as they were unveiling the new policy one of their main policy goals - a common European energy policy - was again being thwarted right in their backyard. Today Serbia’s government agreed to sell its oil and gas company, NIS, to Russia’s Gazprom. It's one more step toward Russia's goal of building a pipeline called "South Stream" to send gas directly into the EU. Gazprom has also done similar deals with EU members Italy, Hungary and Bulgaria. All of this is a direct challenge to the European pipeline project Nabucco, which would bring gas to Europe from Iran and Azerbaijan via Turkey, reducing EU dependence on Russia.

The energy and climate change package is in many ways just as much about giving Europe a common energy policy as it is about combating climate change. The hope is that if the EU could get enough energy weight that the smaller countries won't be tempted to do individual deals with Gazprom. It could work, but the Nabucco project so far seems to be going nowhere while Russia is churning ahead. And a future in which the EU is dependant on Russia for its energy needs is a future no one in Brussels wants to see. Well, maybe no one except the Russian ambassador.