14N: There is not "them"

Amid of the harshest recession in the European Union, there are countries like Greece, Spain, Portugal or Italy thaat cannot bear more auterity measures. Today, 14 of Novemember, 2012 thier citizens are striking in the streets fighting for their human rights.

Greece
Eurozone is standby the resolution of IMF and Eurogroup to reach an agreement over two-year extension debt in Greece. What Greece is supposed to do is to get its debt down to a 120% of the GDP by 2020 (or what they are trying now until 2022).

Also, goverment is seeking to avoid the €5bn default thought T-bill auction, but as the FT exposed "Greek banks expected to buy the issue can only raise about €3.5bn of collateral acceptable to the European Central Bank".

Greece is still the biggest problem of the Eurozone, but Eurozone finance ministers should release the next aid by November the 20th.

Spain
The Spanish situation is not getting better either. Evictions have provokes two suicides already from vulnerable homeworkers to pay thier mortages. Central government is taking action to limit the foreclosures for two years. This is linked with the debate over banking reform and the so-called "bad bank" which will start working at the end of November with €5bn. Reuters explained that "the bad bank will initially receive €45bn in assets from the four nationalized institutions".

Besides that, the uncertainty over the bailout is still worring investors. On the other side, Spanish citizens will not see many changes in Goverment policy at least until the unveil of the budget deficit target (that it must reach a 5.5%).

The 14N is the second general strike in less than a year in Spain. The desesperate situation in Spain is aggravated by the 25% unemployment rate.

Portugal 
After the visit of Angela Merkel to Lisbon last Monday the 12th of November, 2012, anti-austerity protesters held placards telling her she was not welcome, as Aljazeera showed in a report. Besides that, some activist (4,226) wrote a letter addressed to Ms. Merkel where it explains that taking more loans from the Troika is not the solution for Portugal. Portuguese video information prohibited in Germany here.

Portugal also reaches a 16% unemployment rate, and to impose more austerity measures will only produce a deeper recession.

Italy
Italians have also similar problems. Now  Italy is about "to indict five S&P employees and two from Fitch Ratings for market manipulation" connected to their downgrades of Italy’s credit rating, according to the Telegraph information.

However, Mario Monti efforts seems to produce positive effects by 2013, according to Bloomberg with  less deep recession compared with 2012 (a GDP drop of 0.5% in 2013 against 2.5% of 2012) due to a reduction in the unemployment rate.

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All this information regarding to the most affected countries of the Eurozone does not mean "they" are the only ones to be hit by the financial crisis. Specially because this is a global crisis. today, 14N there are 23 countries demostratiing against austerity measures (France, Belguim and Germany among them). As the BBC news is showing today, UK will recover slowly from recession. However, according to King: "Output might shrink again in the last quarter of 2012".

This is not a battle between the South and the North European countries. I believe in a common solution, with deeper integration among all of Us. Perhaps, more regulation over the market will be the solution, to cede a bit  of sovereignty to the Union, or to create the banking union, etc. There are many possibilities on the table, they (We) only need to get an agreement all together. "There is just no work" information of BBC about today demostration, specially in Spain and Portugal. The problem is that demostration will not change anything about the current situation, unfortunately.

 In the overview, I will add that other countries in the world are also suffering the consequences of the global financial crisis, as Japan or U.S.

Many reforms, no positive results

Almost one year after Mariano Rajoy was elected president for Spain, there has been many major domestic and international changes. Spain's center-right conservatives swept convincingly into power as it usually happens when a financial crisis threatens the economy. Since then, drastic economic reforms has taken place in the country, specially fiscal and structural adjustments. Spanish´s Prime Minister said last 31st of October to Reuters that “Spain will come out of its current crisis through a combination of domestic reforms and policy decisions taken at a European level”. Is it the request of the bailout one of them? Lets analyze the situation.

The Spanish government is set to pass 43 new laws to reform the economy within the next six months. And the new budget entails 58% spending cuts and 42% increased taxes, according to the information published in Russia Today last 27th, September. Some of these austerity measures include reducing €10m spending in education and health, increase of taxes (for example up to 21% in the value added tax) and fees or the controversial labor reform. Spanish government is willing to reach an objective target of 5.5% of the GDP with a reduction in expenditure of more than two thirds. This will deposit a total revenues of €30.3m (GBP24.19m) in 2012.

However, in the European framework there is not such a positive view of the Spanish recovery in a short term, and many external pressures are pushing Spain to ask for a bailout of its economy. Risk premium of Spanish 10 years yields bond is still above 400 basis points compared with German bunds. Besides that, foreign direct investment (FDI) was reduced to GBP15.83bn in 2011 half of the amount when compared to the previous year according to the World Bank. Even when the Spanish Minister of Economy came to London last 11th of October to ask for foreign investment, it has not been any change since then.

This information, along with the reduction of exports and imports, has made Spain to loss competitiveness in a international market. Spanish´s balance of payments has a negative commercial balance of €-3.1m (GBP-2.42m) according to data provided by the National Statistic Office (Aug,2012). The World Economic Forum expresses this insufficient competitiveness in 2012 because “the high levels of public debt coupled with low growth. [...] And political gridlock in some European countries stirred financial markets’ concerns about sovereign default and the very viability of the euro”. Spain is ranked 36 in the global competitiveness index with a 4.60 score (where Switzerland ranks first with 5.72 score).

Concerns in the eurozone countries have reached to Brussels, where it has announced to Spain and Italy the creation of a “Super commissioner” figure to exercise tighter control over budget as it was reported in the Spanish television last Thursday 29th, October 2012. Mr. Mario Draghi has made clear that they will do whatever will be necessary to keep the eurozone together, driving towards a greater integration, as the only safe way to protect the single currency.

Meanwhile, Spanish economy continues into recession, as the annual variation of the GDP represents in  the third quarter of 2012 (-1.6% in the Q3/12 compared to -1.3% in the Q2/12). This result is a consequence of a “negative contribution of domestic demand, partly offset by a positive contribution from external demand”, according to the National Institute of Statistics of Spain (press release 30th October, 2012). In the same direction, unemployment has increased until the 25% of the population on the 3Q/12, and the government gross debt reaches a general amount of €87.9bn (GBP70.9bn) in 2012 according to OECD data.

This data makes people wonder why Spain has not yet asked for the bailout from the EU. However, the decision is not an easy one. The main problem is the huge amount of debt from financial institutions. The global crisis of 2007 hit specially Spain because the great bubble housing speculation, where banks gave many loans and credits to people who could not return the payment. Now, institutions as Santander, BBVA or Bankia face an important recapitalization of their public debts, through cuts in Spanish population budgets.

While there has been many reductions of social expenditures since December 2011, Spain is running out of money and places to get it from. The Spanish government is now resorting to taking money out of the pension funds. This is one of the biggest problems. There are millions of Spanish families without any member of the family working, many are living with just the pension of their grandparents. This situation is exacerbated since family cannot pay the mortgages and banks are evicting 500 families a day.

The controversy is made by two sides of the question. If Spain requests for the bailout will imply tougher measures from Brussels. However, if Spain does not reach a deficit of 5.3% of the GDP by the end of 2012 it will have  no choice, but to ask for bailout. The social impact on Spanish population will mean more cuts, reduction on pension funds, frozen wages and increase on inflation (what is it already at 3.5%). On the other side, the bailout will go to recapitalize the banks, and not to the wealth of the population, who will suffer even more the consequences.

A year ago, monetary union was destiny to die due to European banking meltdown and the controversy about the measures in the single currency. Today, when a possible debt forgiveness for Greece is on the table along with some more austerity measures, the ECB is willing to buy unlimited Spanish bonds in the second market. Although Germany has the last word, it seems like the single currency is being saved for an imminent break down. Now the question is, what conditions is Brussels going to impose to Spain in the new “package” of measures for bailout? And even more, what consequences will imply for the Spanish population?

LIMUN 2013

LIMUN, the largest annual university-based Model United Nations conference in Europe, presented yesterday in HULT university in London its Secretarian team for 2013. The main theme this year it is the conference about the MDGs that will take place next February from the 15th to the 17th in London. 

Secretarian Team 2013

Press Team 2013

Social crisis, instead

 Since "networks are part of our reality" (M. Castells), I will perform this role sharing some ideas I have gotten from Manuel Castells, today at London School of Economics (LSE). Under the title: "The crisis always rings twice", Manuel Castells gave us an answer about how the financial crisis has caused. He explained that it is/was "a combination of new technology, through a process of deregulation and reckless of financial managers".

Financial system is built in a sense that people do not mind. As Manuel Castells explained, reffeing to the action we are taking to solve the financial crisis, "we save the banks, but let the people fall". He also interpreted the current crisi of the power´s system as one where the "elites have lost the capacity to rule the financial system".

Furthermore, there is a more important cause for the moment we are living in: a social crisis. Since every economic process implies a social process, here it is the explanation of how people interact and organize through the network and the implication this has to our lifes. Manuel Castells refers the networks as an important basis of the self in what he calls it "the real virtuality", where information is the cornerstone of humanity.

He links the social process to the fact that the economic crisis has lead us to a social crisis, pointing out the question: "who has lent money to a non-family member? not many nowadays", was his answer. And, who will be able to work less if they will be paid less? A positive answer of the former question is what he describes as "post capitalism" or "non-capitalism" society. That it will probably happen soon.

However, meanwhile there is a process of marginalization. Here, the case of Greece came out as "they are going through a process oof desistegration on its political system". Also, the Spanish indignadoswas  represented by the statemet of "when systems block, the new social opinion is formed".

Therefore, he made sense of the fact that the economic crisis is not over, but there exists a political crisis to legitimacy that has been followed by a social crisis where: "European identity will work fine as long as there is not crisis".

Everything here emphasize the current economic and political crisis with a new aspect: a social crisis. However, it was his last comment what called my attention: "the non-global global crisis", where global economy is growing.

That´s wrong folks!

When you look yourself in the mirror, you can have an image of want you see on it, maybe what you want to see from it, but perhaps it is not the real version of the fact. This is not the way to look at things to find the true reality.

Democracy, good word, but what does democracy really mean?. The closest example that we have in the world is just a mere reflection of the real one (where people can make choices and change things).
Today, in the London School of Economics (LSE), the Spanish Minister of Economy and Competitiveness, Luis De Guindos, came to explain "The Spain´s Economic Strategy". I still wondering was it is...

Nevertheless, for those who were not able to get in the conference, we stayed outside to, at least, have the possibility to hear some answers that could make the Spanish situation a bit more clear in our minds (not just some nice words to make us believe things are better than they really are...). In the door, I met some nice people from the 15-M movement (more info in twitter: @15mlondon) who, at the song of "They called it democracy, but it is not!", were raising their voices to be heard (because the is no other way). "Nicely" one of the Minister´s bodyguard told us to move back because the Minister was not going to answer our demands. Well, since at least we have some freedom of expression I would like to raise my voice as well to ask the questions for what I have no asnswer (and perhaps nor they do):

-What action is Spain finally going to take regarding to the European Stability Mechanism (ESM)?
-Why is there a contradiction about the amount of money Spain is supposed to ask to the European Central Bank (ECB) and the Wyman report?
-How and when are we [all, Spanish and the rest] going to see any good outcome of the economic policies taken in Spain to the economic recovery?
-Why to fund financial institutions with public money when the people can not even eat?

I can just say that the world we are living in, the things are happening and what we are doing to solve them are all wrong. There is not the way just to speech nice words and to wait results to come out, neither is the solution to shout and complain without trying to do something else. We have to work together, build something from what we have and try to develop it in the best way possible. But confrontation is not a solution.

We (the people) have the voices to fight from our rights, but (as this is not a real democracy) we can not change things that easily. In this capitalist (still) world only the powerful ones make the decisions. We have of course to use our voices, demostrate is necessary to be heard, but we should use them to build something else greater from the facts. Raise your voice, demostrate but do something else. They have to know we are here for more than just complaining. All together we can do it, because we also have the power, and Spain is not for sale!, we are here and we should defend it!

Defenders of... what?

Is the media an instrument for the government and big corporations to achieve their personal interest or is it really a powerful weapon to unmask them? The sad truth is that the media has become, a part from a few exceptions I will mention later, a easy tool for big conglomerates to get profit. The only interest here is: money, and on the bottom of the scale: look for the truth or merely inform.

Shadows of liberty, a documentary directed by Jean-Philippe Tremblay, exhibits the crisis in the US media through history. There are many scandals of goverment and large companies that, as Friedman said in the documentary (if I remember correctly) , if a news does not appear in the mainstream media as The New York Times, The Guardian... is like it has never happened. So, how can we (the journalists) keep the integrity of our professional values if there are contradictory interest behind? Where are people like Woodward and Bernstein nowadays? Oh right! they are refugees in an embassy to flight against the White House... (I will leave aside this lastest example since it is a hard to speak case, and everybody has their own opinion. But as one section Shadows of liberty alludes related to similar subjects in the past: "kill the messenger").

Returning to the docuemtnary, I would like to congratulate Tremblay and his team for brighing to light those hidden interests of big conglomerates and defending the truth of the facts even at the prospect of losing your jobs, because people and ideas like yours makes me believe again in the profession I chose to study.

“If you're not careful, the newspapers will have you hating the people who are being oppressed, and loving the people who are doing the oppressing.”  

Malcolm X

Green vehicles: the double-edged sword

The world is increasingly polluted. New laws, conferences and meetings are established among countries to solve this problem. In the European frame, the “Europe´s growth strategy” has set five ambitious objectives, that is: on employment, innovation, education, social inclusion and climate/energy, to be reached by 2020. However, what has been achieved?. There are many sectors in which contamination can be reduced using for example renewable energies. Vehicles are the ones that provoke 20% of CO2 emissions, “the major contributor to climate change, according to UK National Charity Environmental protection.

Energy and oil products are getting more and more expensive to the point that the standard barrel of crude oil or other petroleum products has reached 96.20 US $/bbl crude oil (OPEC basket day price), according to the EU energy database on the 6th of June, 2012. EU legislation has implemented a new Directive law to maintain minimum stocks of crude oil and/or petroleum products based on the current Council Directive 2009/119/EC of 14th of September, 2009. “The European Union’s dependency on imports of petroleum products is an increasing cause for concern for European economic prospects”. Also, the EU has established the “Euro standards” with the impact that all new cars must comply with strict EU vehicle emission standards.

The EU is putting in place an ambitious energy policy as is expressed in the Treaty of Lisbon by “covering the full range of energy sources from fossil fuels (oil, gas and coal) to nuclear energy and renewables (solar, wind, biomass, geothermal, hydro-electric and tidal)”. As one of the factors contributing to the development of energy policy and inside the mentioned Europe 2020 strategy framework, on 28th of April 2010, the European Commission presented a strategy for clean and energy efficient vehicles (“green vehicles”) in the COM/2010/0186.

Inside this 2020 strategy, the EU is committed to reduce its greenhouse gas emissions by 20 % by that time. Renewable energy on electric vehicles (EVs) is proposed as a viable solution.

Clean and energy efficient vehicles

There are many theories about electric vehicles. The reality is that the technology is not a new development, but a proven technology. In fact, many studies show that the electric vehicle has been around for over 100 years. History reflects how “in 1900, there were more than 4,000 cars on the road- a third each electric, gasoline and steam-powered”. In the same study, National Public Radio (NPR) describes how in 1920 with more developed roads, car owners wanted faster cars than the electric ones.

Also, in the 21st century new models were launched. Some electric cars currently in the market are: Nissan Leaf, Smart Fortwo, Chevy Volt and the coming electric Ford Focus. Speed has increased and price has become affordable.

Nevertheless, the awareness of a real solution to face climate change made the European Commission set out a policy the 28th April, 2010 in Brussels to support the creation of a clean and energy efficient transport system in the EU that will contribute to achieve the Europe 2020 objectives. This European strategy stated that “the plan is part of a sweeping new strategy for introducing more ‘green’ cars to the market, seen as crucial to reviving the car industry and weaning Europe off oil.” To comply with EU 2020 priorities, this legislation also includes those vehicles capable of using electricity, hydrogen, biogas or even efficient petrol-powered vehicles as alternatives.

Denmark, a model to follow

If inquiries are done into the European statistics, it is remarkable to notice that Denmark is the only country inside the EU without an energy import dependency with -18.80% (2009 EU energy statistics). There are many car companies which have opted for this future technology. In Denmark, EVs are a reality. We visited Insero E-mobility and Better Place, the two most important electric car companies in Denmark to know more about the characteristics of these EVs.

Better Place, Denmark

Insero E-mobility

Stine Højgaard, sales representative at Insero E-mobility, explains that “Green cars, including electric, hybrid and plug-in hybrid vehicles, are becoming more popular, efficient, powerful and fun to drive. In deciding to purchase a green car, you are helping the environment by reducing your carbon footprint when you drive”. The first concept to keep in mind is the real difference between the ICE-car (diesel and petrol cars) as opposed to hybrids and electric vehicles. Here, the focus will be on the Battery-Electric Vehicles because they are more common and more widely available.

Making the tour inside the Insero E-mobility car company, Stine Højgaard told us that the first thing you should examine is the range and autonomy of the EVs, that is to say, how many kilometers (or miles) the car can drive without needing to be recharged. For example, the Nissan LEAF's ability to carry five passengers up to 175 km (109 miles) under the New European Driving Cycle, according to Nissan Motors Media data. 

Another aspect is the battery life. There are three types of battery power: lead-acid (oldest and cheapest type of rechargeable battery, no longer used for e-car due to weight and environmental concerns), nickel-cadmium or nickel metal hydride (batteries that are maintenance free and difficult to damage. However they are heavy weight, higher cost), and lithium-ion (are also maintenance free and the newest type of rechargeable batteries). The latest is the type of battery mostly used in Electric Vehicles and in some hybrids.

Depending on the distance you daily drive, Stine Højgaard clarifies that some batteries should be run down to a certain level before charging them again. Other batteries should not be charged to more than 80% on a daily basis because the battery life is reduced when they are fully charged.

Stine Højgaard makes clear that the electric vehicle market is still fairly young, so certain aspects of buying this type of car will be uncertain. “Battery life and the price for a new battery are very difficult to predict. These factors must be taken into consideration, with an understanding that the green car market is growing and changing rapidly”. In this sense, the top CEO of Insero organization says that “only between 25-30 % of the energy comes from sustainable sources”. Therefore, how green they are, is very much depending on where the energy comes from.

Better Place

Better Place is a global provider of electric vehicle (EV) networks and services founded on the 29th of October, 2007. As Johnny Hansen, CEO of Better Place in Denmark, clarifies their mission is “to end our dependence on oil, accelerating the transition to sustainable transportation”. In their office in Copenhagen they have many Nissan electric cars which are already on the streets. Johnny Hansen explains the accomplished developments, as well as the obstacles still to overcome.

The best advantage is that EVs produce no harmful pollution to the environment and also, unlike traditional fossil fuel-powered cars, electric cars are quiet during operation. “Their automatic transmission make them easy and fun to drive”, Johnny Hansen describes. However, he also mentions the difficulties still to overcome such as the cost, placement and range of the batteries. “The greatest achievement is to reach a balance between price, technology and the market”. It is necessary to get all the elements together: industries, country policies, investments and society.

Morten Østergaard, Minister for Science, Innovation and Higher Education of Denmark, accounts for another positive side of the story: employment. “This new market is an opportunity to create jobs, innovate and invest in the future of our society at a moment that the entire world needs to fight against the economic crisis and the climate change”.

Denmark is one of the few countries in the world, as well as Israel for example (first Better Place office), that assesses the potential of electric cars and that takes policy measures to promote them as the inversely proportional to taxes, which means zero taxes for zero emission EVs.

Better Place, Denmark

Spain: new market, new solutions

After the nationalization of the subsidiary Spanish oil company Repsol IPF in Argentina and the Spanish electric company TDE in Bolivia in the first quarter of 2012, future strategies have to point out to other directions: renewable energies. That is to say, in terms of crisis and increase of oil and electricity prices, renewable energies are the solution to both economic recovery and environmental protection.

In Spain EVs have not had great success yet even under those circumstances. The closest example to electric vehicles are the hybrids. “Every brand has at least one car with these characteristics”, explains Paco Martinez, sales representative in Samar Mobil, Volvo car corporation in Alicante, Spain. Within this company they have hybrids from sports brands like Porsche, such as the Cayenne Hybrid, a plug-in hybrid, available for sale.

Paco Martínez also illustrates that Honda currently has three hybrid models: Jazz, Insight and CR-Z. “These 3 models have a system for harnessing the kinetic energy, using the deceleration and braking to convert that energy into electricity and charge the batteries installed in the lower part of the boot. They are maintenance-free batteries and are constantly charging”, exemplifies Paco Martínez. Honda also works with other green alternatives such as motor vehicles powered by hydrogen, which in this case implies that, all that comes out of the tailpipe is water vapor.

When it has to do with subsidies, at present Spain has no support for hybrid cars. These grants were given by autonomous communities every year from May to May, although this year they have not been renewed, or at least not yet. “The aid given by these autonomous communities did not cover the entire Spanish territory. You had to prove by the census that you reside in that community to obtain the aid from this city”, specifies Paco Martínez. The agency that manages the aid in Alicante is the Valenciana Agency of Energy (Aven). 

Achievement vs Competitiveness

Electric Vehicles are a promising technology for reducing the greenhouse gas (GHG) emissions and other environmental impacts of road transport. According to the “Impact on EVs” report on April 2011, it is stipulated that the price of the vehicle is a crucial point in the question whether one day EVs will be able to fully penetrate the car market, where “the median price for all Electric Vehicles is € 28,750”. As said before, the driving range is the other relevant criteria for EVs to be established in the society.

About government support and investments, the same study gives numbers describing that “the overall sum of € 21.6 billion over a period from 2008 to 2011 [was] divided almost identically between the USA (€ 8.6 billion) and the EU (€ 8.5 billion)”. There are many strategies to promote EVs. One of the Danish actions is to establish free parking for EVs. One measure to achieve Spain’s goal to have one million electric or hybrid cars on the roads by 2014 is to provide consumers who buy an electric car in Spain with a rebate of 15% off the price of the vehicle.

On an European level, the EU Economic Recovery Plan focus on the three Public Private Partnerships The Energy-efficient buildings, Factories of Future and European Green cars Initiatives. In addition to that, the EU has set out an ambitious strategy to reduce CO2 emissions from road vehicles and much has been achieved already. As the European Strategy on clean and efficient vehicles provides, “Regulation (EC) No 443/2009 setting emission performance standards for new passenger cars requires a fleet average emission of 130 g CO2/km for new passenger cars to be fully achieved by 2015”.

As the prediction is that traffic levels will continue to increase, road transport will continue to be a significant contributor to GHG. The proposed solution implies that one has to look at other directions where electricity prices remain relatively stable, while fossils fuel costs are rising and reserves eroding. Renewables emerge as the energy of the future while EVs are outlined as the clean alternative to reduce CO2 emissions and to open a new economic market. Therefore, green vehicles are a true double-edged sword.