Eurozone in crisis
The eurozone’s debt crisis that Wolfgang Münchau (July) writes about is really an issue of structure, governance and leadership. As large as Greek debt is—some $500bn—it is less than 5 per cent of the whole area’s GDP. The average debt-to-GDP ratio of eurozone countries is around 80 per cent: slightly higher than Britain’s, but less than in the US—and less than half of Japan’s. None of those countries has yet seen the bond buyers strike experienced in the eurozone. Why? Because European monetary union is delivering what it says on the tin.
To join the euro, countries were supposed to have budget deficits of less than 3 per cent of GDP and run debt at or towards a maximum of 60 per cent. Currently, Finland is the only member that satisfies this criteria. All four Bric countries (Brazil, Russia, India, China) would be better members than many existing ones. European leaders must be bold and decide what they want the eurozone to be. Instead of playing games about who should be in or not, they should introduce a truly common bond denominated in euros for the 60 per cent debt-to-GDP ratio that they are all, in principle, allowed to have. This would demonstrate true European solidarity.
Without such leadership, the euro troubles will run and run. There is much more at stake here than Greek debt refinancing.
Jim O’NeillGoldman Sachs Asset Management
Wolfgang Münchau is right that a new generation of European leaders must sort out Europe’s financial mess. No country needs this more than Italy. Despite the relatively good recent management of Italy’s sovereign debt, and despite a banking sector with no property bubbles to fear, the markets were rightly concerned that political games might water down the €40bn austerity package now being hurried through parliament. This temptation will not be gone until a new political class replaces the old one, convincing the markets that Italy can credibly combine austerity and reforms. As shown by the appointment of Mario Draghi as the new governor of the European Central Bank, Italy can provide Europe with credible leaders. It is time it gave itself some too.
Ferdinando GiuglianoPembroke College, University of Oxford
As someone who still believes in European unification, it dismays me that there remains one enduring, and undeniable, deficit at every level: democratic accountability.
Bureaucrats, politicians and business leaders seem blighted by myopia. They equate their interests with the whole European project. That myopia has caused the EU to focus on the rescue of international bond holders, not the survival of the Greek economy, not Greek sovereign dignity and certainly not ordinary Greek citizens.
Edward HarkinsVia the Prospect website
Are we serious about Libya?
Are we really serious about Libya? I ask that question because there is a crucial missing dimension to the UN-sanctioned attacks on Colonel Gaddafi’s military machine. That is the element of psychology.
Every day 150 attack sorties are launched against the Gaddafi forces (although the plan was for 300), and gradually the Colonel’s capacity to attack and destroy his rebellious countrymen and women is weakened. But our forces have an arm tied behind their back.
The coalition participating in the NATO operation gets slimmer every day. The Italian decision to withdraw their aircraft carrier was just the latest bit of backsliding after the initially unanimous adoption of the exercise.
A UN Security Council resolution, an Arab League resolution, a clear threat by Gaddafi of retribution against his opposition, an alternative government operating with popular support from Benghazi—yet the democracies of western Europe seem half-hearted at best.
It is time for British and French leaders to get on planes and remind fellow Nato allies that we don’t do failure, and precisely what a Gaddafi victory would mean for vast numbers of Libyans. It’s time to look the Gaddafi henchmen in the eye and remind them that there is no hiding place for them now that their leader faces trial at the Hague. It is also time to use the press, radio, and TV—and clandestine channels too—to get over the massage that we will use all means in our power to protect the civilian Libyans whom Gaddafi has terrorised for forty years.
Only with a sense of urgency and resolution will success be guaranteed.
George RobertsonFormer secretary general of Nato
Bringing the war home
The recent defence review failed to sufficiently underline how much defence policy is blighted by a toxic inter-service rivalry. The fight for jobs and service survival is fought endlessly by senior officers.
Few outside the army doubt the generals saw Helmand as “their” war. What the Falklands did for the navy, Helmand would do for the army. It hasn’t worked out like that—and we continue to see the appalling consequences.
Frank Ledwidge Author of “Losing Small Wars” (Yale)
Obama’s real opponent
Adam Haslett (July) is right that there is an anti-government sentiment among Republicans, and that the party needs to attract moderates. But this is also true for Democrats. President Obama took office on a wave of promises, but he has not been able to curb mass unemployment, and the 2010 midterms were proof that Americans are not happy with the nation’s trajectory
While the attendees of the cruise Haslett went on are an element of the conservative vote, the wider field of Republican supporters are just like the rest of the country: disgruntled at a Congress constantly trying to win political points, and disgruntled at a president who has quadrupled the deficit.
The Presidential race in 2012 is Obama’s to lose, but his biggest opponent will not come from the right—it is the economy.
Stacy M HilliardVice chairman, Republicans Abroad UK
Science matters
Despite being an engineer, I agree with Rolf-Dieter Heuer (July) that “targeted” scientific research cannot substitute the sort of research that Cern does: the kind that is done to satiate curiosity. If we only spent money on inventing things for an immediate need, we would not have the internet or the microwave oven, we would never have discovered cosmic rays—the list goes on.
Viren BhanotVia the Prospect website
In defence of Burnley
David Goodhart (July) has been too harsh on Burnley. Since 2001 we have seen new schools, two new universities and millions of pounds of private investment in our manufacturing industries, all encouraging and supporting better racial integration. Burnley is bucking the trend in terms of high-skilled industry, with big companies such as Aircelle bringing new jobs and contracts to the town.
But social change cannot just take place at government level. People on both sides of the community must find out more about the cultures and religions that make Burnley such a vibrant place. Projects across the town have engaged with communities to help this change happen. Burnley has the potential to be a flagship for urban regeneration and social cohesion and I look forward to being part of that change.
Gordon Birtwistle MP for Burnley
The drugs do work
What Anna Blundy (July) saw in the psychiatric units she visited was immeasurably better than much of what I saw working as a clinical psychologist in the 1950s and 1960s. But only a minority of sufferers from mental illnesses are found in these units: the majority are in prison. Psychiatric services were drastically cut a half-century ago, largely because the government thought “community care” would be cheaper. Quite apart from the inhumanity of this approach, it neglected the ways in which psychiatric services could have been improved—without the cost of prison building and maintenance.
Hellmut KarleAddress withheld
We need alternative energy
Dieter Helm’s overview of global energy (April) skirted the core issue. Fossil fuels are plentiful, yes; but the “easy oil” that wells cheaply out of the ground when we drill a hole is not. There’s lots of gas, but most new developments require huge investment, or derive from shale gas, which despite all the fanfare is not a panacea. Many questions remain about its scale, environmental impacts and costs.
Fossil fuels, renewable energy and uranium are all plentiful. Renewables and nuclear require more capital investment than oil and gas—but relying on oil and gas exposes us to the inherent volatility of fossil fuel markets. To avoid exacerbating climate risks, the fossil fuel path also requires huge retrofit of carbon capture and storage: the most uncertain and unproven of the low-carbon technologies. Fossil fuels are cheaper in the short run. But abandoning Britain’s commitment to alternative sources would lock us into dependence on oil and gas: a gamble with unknowable long-term costs and risks.
Professor Michael GrubbFaculty of Economics, Cambridge University
An expensive game
Lionel Shriver and Geoff Dyer (June) may be right that tennis is a wonderful game, but it is very costly. My son is learning it and I can tell you I am struggling to pay tuition fees.
Veena SinghVia the Prospect website
Overestimating Wagner
No performance of Wagner’s Die Meistersinger ever lasted six hours, as Michael Coveney (July) claims, unless one includes the intervals. The slowest performance in my experience was Reginald Goodall’s at the English National Opera in 1967, which lasted five hours with a 20-minute cut. The average timing for the Bayreuth Festival is four hours 20 minutes. Further proof lies in the fact that the opera always fits onto four CDs.
John HornsbyFrance
Have your say: letters@prospect-magazine.co.uk
The eurozone’s debt crisis that Wolfgang Münchau (July) writes about is really an issue of structure, governance and leadership. As large as Greek debt is—some $500bn—it is less than 5 per cent of the whole area’s GDP. The average debt-to-GDP ratio of eurozone countries is around 80 per cent: slightly higher than Britain’s, but less than in the US—and less than half of Japan’s. None of those countries has yet seen the bond buyers strike experienced in the eurozone. Why? Because European monetary union is delivering what it says on the tin.
To join the euro, countries were supposed to have budget deficits of less than 3 per cent of GDP and run debt at or towards a maximum of 60 per cent. Currently, Finland is the only member that satisfies this criteria. All four Bric countries (Brazil, Russia, India, China) would be better members than many existing ones. European leaders must be bold and decide what they want the eurozone to be. Instead of playing games about who should be in or not, they should introduce a truly common bond denominated in euros for the 60 per cent debt-to-GDP ratio that they are all, in principle, allowed to have. This would demonstrate true European solidarity.
Without such leadership, the euro troubles will run and run. There is much more at stake here than Greek debt refinancing.
Jim O’NeillGoldman Sachs Asset Management
Wolfgang Münchau is right that a new generation of European leaders must sort out Europe’s financial mess. No country needs this more than Italy. Despite the relatively good recent management of Italy’s sovereign debt, and despite a banking sector with no property bubbles to fear, the markets were rightly concerned that political games might water down the €40bn austerity package now being hurried through parliament. This temptation will not be gone until a new political class replaces the old one, convincing the markets that Italy can credibly combine austerity and reforms. As shown by the appointment of Mario Draghi as the new governor of the European Central Bank, Italy can provide Europe with credible leaders. It is time it gave itself some too.
Ferdinando GiuglianoPembroke College, University of Oxford
As someone who still believes in European unification, it dismays me that there remains one enduring, and undeniable, deficit at every level: democratic accountability.
Bureaucrats, politicians and business leaders seem blighted by myopia. They equate their interests with the whole European project. That myopia has caused the EU to focus on the rescue of international bond holders, not the survival of the Greek economy, not Greek sovereign dignity and certainly not ordinary Greek citizens.
Edward HarkinsVia the Prospect website
Are we serious about Libya?
Are we really serious about Libya? I ask that question because there is a crucial missing dimension to the UN-sanctioned attacks on Colonel Gaddafi’s military machine. That is the element of psychology.
Every day 150 attack sorties are launched against the Gaddafi forces (although the plan was for 300), and gradually the Colonel’s capacity to attack and destroy his rebellious countrymen and women is weakened. But our forces have an arm tied behind their back.
The coalition participating in the NATO operation gets slimmer every day. The Italian decision to withdraw their aircraft carrier was just the latest bit of backsliding after the initially unanimous adoption of the exercise.
A UN Security Council resolution, an Arab League resolution, a clear threat by Gaddafi of retribution against his opposition, an alternative government operating with popular support from Benghazi—yet the democracies of western Europe seem half-hearted at best.
It is time for British and French leaders to get on planes and remind fellow Nato allies that we don’t do failure, and precisely what a Gaddafi victory would mean for vast numbers of Libyans. It’s time to look the Gaddafi henchmen in the eye and remind them that there is no hiding place for them now that their leader faces trial at the Hague. It is also time to use the press, radio, and TV—and clandestine channels too—to get over the massage that we will use all means in our power to protect the civilian Libyans whom Gaddafi has terrorised for forty years.
Only with a sense of urgency and resolution will success be guaranteed.
George RobertsonFormer secretary general of Nato
Bringing the war home
The recent defence review failed to sufficiently underline how much defence policy is blighted by a toxic inter-service rivalry. The fight for jobs and service survival is fought endlessly by senior officers.
Few outside the army doubt the generals saw Helmand as “their” war. What the Falklands did for the navy, Helmand would do for the army. It hasn’t worked out like that—and we continue to see the appalling consequences.
Frank Ledwidge Author of “Losing Small Wars” (Yale)
Obama’s real opponent
Adam Haslett (July) is right that there is an anti-government sentiment among Republicans, and that the party needs to attract moderates. But this is also true for Democrats. President Obama took office on a wave of promises, but he has not been able to curb mass unemployment, and the 2010 midterms were proof that Americans are not happy with the nation’s trajectory
While the attendees of the cruise Haslett went on are an element of the conservative vote, the wider field of Republican supporters are just like the rest of the country: disgruntled at a Congress constantly trying to win political points, and disgruntled at a president who has quadrupled the deficit.
The Presidential race in 2012 is Obama’s to lose, but his biggest opponent will not come from the right—it is the economy.
Stacy M HilliardVice chairman, Republicans Abroad UK
Science matters
Despite being an engineer, I agree with Rolf-Dieter Heuer (July) that “targeted” scientific research cannot substitute the sort of research that Cern does: the kind that is done to satiate curiosity. If we only spent money on inventing things for an immediate need, we would not have the internet or the microwave oven, we would never have discovered cosmic rays—the list goes on.
Viren BhanotVia the Prospect website
In defence of Burnley
David Goodhart (July) has been too harsh on Burnley. Since 2001 we have seen new schools, two new universities and millions of pounds of private investment in our manufacturing industries, all encouraging and supporting better racial integration. Burnley is bucking the trend in terms of high-skilled industry, with big companies such as Aircelle bringing new jobs and contracts to the town.
But social change cannot just take place at government level. People on both sides of the community must find out more about the cultures and religions that make Burnley such a vibrant place. Projects across the town have engaged with communities to help this change happen. Burnley has the potential to be a flagship for urban regeneration and social cohesion and I look forward to being part of that change.
Gordon Birtwistle MP for Burnley
The drugs do work
What Anna Blundy (July) saw in the psychiatric units she visited was immeasurably better than much of what I saw working as a clinical psychologist in the 1950s and 1960s. But only a minority of sufferers from mental illnesses are found in these units: the majority are in prison. Psychiatric services were drastically cut a half-century ago, largely because the government thought “community care” would be cheaper. Quite apart from the inhumanity of this approach, it neglected the ways in which psychiatric services could have been improved—without the cost of prison building and maintenance.
Hellmut KarleAddress withheld
We need alternative energy
Dieter Helm’s overview of global energy (April) skirted the core issue. Fossil fuels are plentiful, yes; but the “easy oil” that wells cheaply out of the ground when we drill a hole is not. There’s lots of gas, but most new developments require huge investment, or derive from shale gas, which despite all the fanfare is not a panacea. Many questions remain about its scale, environmental impacts and costs.
Fossil fuels, renewable energy and uranium are all plentiful. Renewables and nuclear require more capital investment than oil and gas—but relying on oil and gas exposes us to the inherent volatility of fossil fuel markets. To avoid exacerbating climate risks, the fossil fuel path also requires huge retrofit of carbon capture and storage: the most uncertain and unproven of the low-carbon technologies. Fossil fuels are cheaper in the short run. But abandoning Britain’s commitment to alternative sources would lock us into dependence on oil and gas: a gamble with unknowable long-term costs and risks.
Professor Michael GrubbFaculty of Economics, Cambridge University
An expensive game
Lionel Shriver and Geoff Dyer (June) may be right that tennis is a wonderful game, but it is very costly. My son is learning it and I can tell you I am struggling to pay tuition fees.
Veena SinghVia the Prospect website
Overestimating Wagner
No performance of Wagner’s Die Meistersinger ever lasted six hours, as Michael Coveney (July) claims, unless one includes the intervals. The slowest performance in my experience was Reginald Goodall’s at the English National Opera in 1967, which lasted five hours with a 20-minute cut. The average timing for the Bayreuth Festival is four hours 20 minutes. Further proof lies in the fact that the opera always fits onto four CDs.
John HornsbyFrance
Have your say: letters@prospect-magazine.co.uk
