Category Archives: Social Issues

Brazil: Corruption & Policy

12806176_1135618059805924_6812705826686326272_nEarly March 4, former Brazilian President Luiz Inacio Lula da Silva and his close friend and political ally, businessman Paulo Okamotto, were detained for questioning in the 24th phase of the country’s anti-corruption probe, known as Lava Jato.

Da Silva and Okamotto were both later released and did meet with leaders from the ruling Workers’ Party (PT) in Sao Paulo to discuss the detention, any possible future indictments, and the consequence for the party and for Brazilian President Dilma Rousseff.

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The new deal for Europe

The current banking crisis is an unintentional victim of a much deeper problem, that of the sovereign debt crisis. This debt crisis, and consequently that of the banks, is what must take priority over other issues.

These days, no-one seems to give a genuine thought to how we could solve the financial and banking crisis that is shaking up the old continent. Politicians seem to be taking their time, waiting for decisions to be made, neglecting to take into account that economic cycles often move much faster than political ones.

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The Parliamentary Elections In Turkey: Continuity Or Radicalisation?

The Parliamentary elections in Turkey on 12th June were historic and long-awaited by Turkish citizens, as well as by the international community and foreign investors.

Prime Minister Erdogan had in fact promised to revise the constitution during this third term of office, hoping to have an absolute majority in Parliament and at least 330 seats in order to do this.

He did not get them.

It is important to note that the number of women members of parliament rose from 50 to 77 and that the Kurdish language was used without restriction. Lastly, the issue of membership of the European Union was not included in the debates, although the majority of Turkish citizens still claim to be in favour of joining.

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Japan: the geo-political and geo-financial impacts

English version

JapanMore devastating than that of Hanshin in 1995, the Tohoku earthquake and the tsunami that followed represent the worst crisis of this type in the archipelago since the Second World War. But outside of relief and urgent humanitarian care, the place of Japan in the world must also be evaluated according to the foreseeable economic impact of the new disaster on the third world economy.

This catastrophe without precedent of human, economic and financial consequences threatens the country’s economy and thus important geo-political and financial equilibriums, internally, in the region, but also far beyond.

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Worrying activities on the Exchange rate market

 We are all witnessing today very strong activities on the monetary markets and an unprecedented appreciation of the Euro versus the Dollar.

Is this situation to stay? To answer this question, one must look at the current macro situation of our economies. The US FED has started an inflationary policy in an effort to deal with a series of urgent issues. The first is related to the job market where almost 17% of active Americans are either jobless or work on a part-time basis. The second is linked to the junk credits inherited from the real estate market and that were partly responsible for the world financial crisis. Those junk credits will simply never be reimbursed by any “regular” channels. Indeed, since no one had forecasted the magnitude of the problem, there were no organization put into place that had been foreseen to be in a position to act in case of a major failure such as the one we encountered. It will be therefore for the US Government to tackle that issue, by reimbursing those junk credits, and those are not small amounts. On an international level, one must note that other developing countries, since September 21st, that are known commercial partners with the USA, have also launched strategies of inflationary policies in order to keep the level of the exports aligned with the dollar therefore maintaining a lower level of their currencies. With the exception of China, another example is the one of Japan that intervened drastically on September 15th. , purchasing more than $ 25 billion on the exchange market. The reaction of the European Central Bank has been very different. The ECB decided pretty much to do nothing and did purchase very low levels of sovereign bounds recently. In effect, the ECB seems to believe that at a macro-economic level the European economy is not doing that bad with respect to the growth levels showed by a limited number of European countries such as the one of Germany that represent 35% of the European GDP. If we take a further example of the Gas consumption levels, the one of Europe increased by 10%, when it increased by 16% in Germany on the first semester of 2010 compared to the one of 2009. As a consequence, if the ECB was to over-evaluate the Euro, this could have catastrophic consequences since no countries apart from Germany and the Netherlands could be in a position to sustain such as situation. The result of such a behavior would be an immediate increase of unemployment that is not sustainable given Europe today’s unemployment rates and forecasts. Furthermore, the consequences of an over-evaluated Euro could simply be the destruction of the Euro zone. However, the position of the ECB might not be a sustainable one: the structural difficulties the Euro are linked to the crisis of public financing such as the ones of Greece, Ireland or Portugal and they are lasting. There are other fragile economies in Europe such as Italy or Spain that require a thorough monitoring. France situation is most likely to become central point at the time of the upcoming Presidential elections in 2012.

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France’s retirement age at 62 from now on

The French Senate recently voted on the legislation that makes the retirement age for French workers 62 years old instead of 60. Many strikes and unrests resulted from that new vote from the French Parliament. Social unrests still go on today, and France will be blocked again on October 12th. But does France has a choice? And, is that legislation the right one, or will it be again amended?
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Governments should work together to ensure stability of our nations

Very interesting and short presentation from Dominique Strauss-Kahn,  General Manager of the IMF prior from its meeting with the World International Organization in Oslo.

Social Welfare will be discussed in Oslo as a mean to prevent world social, economic and institutional instabilities.

This topic and related ones are of particular importance at a moment social unrest shake European countries (France September 23rd. and Spain September 27th.)

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