Europe news highlights | Week of 8 June 2015

Greece is Weakened  in its Austerity Challenge 

“There was a window of opportunity to change course,” said Paul De Grauwe, a professor at the London School of Economics and Political Science who is a critic of austerity. “But somehow the northern view — of Germany, Holland and Finland — has prevailed. Why was this? That is where the power is. The power of the purse.”

via Greece’s Alliances Fade in European Debate About Its Debt Crisis –

For Greece to Win is Game Theory the Plan?

It doesn’t seem like a coincidence that Yanis Varoufakis is an expert in game theory and a key negtiator in Greece’s efforts to overcome the financial pressures of austerity.

Virtually everyone agrees that a default by Greece is the least desirable outcome for both Greece and its creditors — among them Germany and France; the European Central Bank; and the I.M.F. Yet one of Dr. Nash’s critical insights is that there may be many possible outcomes — so-called Nash equilibriums — that produce suboptimal results. A Nash equilibrium exists when each side’s strategy is optimal given what they believe to be the others’ strategy.

For example, if Germany and other creditors don’t believe Greece’s threat to default, and underestimate the severity of such an outcome, they might see their optimal strategy as remaining firm in their demands for Greek fiscal austerity and structural reforms. If, on the other hand, Germany believes Mr. Varoufakis to be ideologically motivated to reject further austerity, it might well cave to Greek demands for leniency.

via In Greek Debt Puzzle, Game Theorists Have it

Can a Market Solution Solve the European Refugee Crisis?

A Yale University professor looks at European country incentives, sees a market-of-sorts already in place, and observes that the question is not whether refugees should be allowed to enter–but where.

via Creating a Market for Refugees in Europe –

Ask a Russian Major about Putin

Still can’t figure out what makes Russia’s top leader tick? In an article that is both literary analysis and intelligence brief, the Fletcher School of Law and Diplomacy’s dean lays out the psychology, historical mindset, and cultural underpinnings of Vladimir Putin and the Russian people that he leads.

Forget the NSA intercepts or spy satellite imagery. And drop the jargon-filled scholarly analysis from those political science journals.mInstead, get back to the richest literary gold mine in the Western world: Russian novels and poetry. Read Gogol, Dostoyevsky, Turgenev, Pushkin, Lermontov, Tolstoy, Solzhenitsyn, and Bulgakov. That’s where you’ll really find how Russians think. And it’s all unclassified!

via James Stavridis in

Nobody Likes the New U.S. Embassy in London

So the old location in Grosvenor Square was historic, elegantly designed, and yet susceptible to attacks and outdated. The NYT reports on much ado about thew new one–which solves the security problem with a LEED-certified technology-packed building but leaves others wanting more.

via With Move Across London, U.S. Embassy Can’t Please Everyone 

The Case Against the Bernanke-Obama Financial Rescue –

Good read on an alternative view on the cause of the US banking crisis:

Their research is now widely cited as demonstrating that the overhang of household debt contributed to the slow pace of the recovery; one such citation came in the 2012 Economic Report of the President. Alan Krueger, a Princeton economics professor who wrote the report and was then the chairman of the president’s Council of Economic Advisers, said he considered their work important for suggesting that in areas where the economic recovery was slow, “that weak demand was the source of their economic problems, not credit market failures.”

Mr. Sufi said he was delighted that policy makers were listening. “It was always the goal for me to write research that would be policy-relevant,” he said. “People asked me what I wanted to be when I grew up, and I’m pretty sure I just wanted to be right.”

via The Case Against the Bernanke-Obama Financial Rescue –

Meet Bradford Smith, the “Tech World’s Envoy”

A lawyer that you can like–and other compliments abound for this corporate leader who combines policy knowledge with negotiation skills.  Bradford Smith, Microsoft’s general counsel, plays a key role on both coasts and around the glob–much like a diplomat-in-chief for tech interests.

Coalition building isn’t just for diplomats:

And in the fall of 2013, Mr. Smith and Erika Rottenberg, the general counsel of LinkedIn, the social media company, organized a meeting of general counsels from a half dozen or so major technology companies to talk about further unifying their efforts to press for government change. The meeting, in a private dining room of a restaurant in Palo Alto, Calif., eventually led to the formation of the Reform Government Surveillance coalition, which counts Google, Facebook, Twitter, Apple, Microsoft and LinkedIn as members.

“He’s good glue for those kinds of groups because of his policy skills and general intelligence,” Bruce Sewell, the general counsel of Apple, said of Mr. Smith.

via Microsoft’s Top Lawyer Is the Tech World’s Envoy –

Booklist | Josef Joffe, ‘The Myth of America’s Decline,’

Is this the end of American supremacy? The publisher-editor of German Die Zeit argues against Fareed Zakaria, Parag Khanna, and others that despite political gridlock and a host of problems, the US is still no. 1 for the foreseeable future.

Joffe, an eager neologist, calls these models “modernitarianism.” He grants that China has advantages that Japan and earlier “tiger” economies lacked. Its reserve army of labor is bigger. And it has a large military. But Joffe is not impressed. Demographically, China is at risk of stagnation, with ever more dependent retirees and ever fewer people of working age. And the United States, with a war budget of around $700 billion (excluding spending on veterans), still accounts for over 40 percent of world military spending. Even if we assume a doubling of China’s $100 billion military budget, slow demographic growth “will not soon enable the Middle Kingdom to unseat the greatest military power the world has ever seen.”

Nor can China match the United States in education. It can send its promising young scientists to top American universities. But most foreigners who get Ph.D.’s in science and engineering in this country tend to stay at least five years, Joffe says, including 92 percent of Chinese and 81 percent of Indians (a striking statistic that helps explain this book’s strong pro-immigration bias). Whether you measure by entrepreneurship or by research and development, China has been unable to develop a free-standing tech culture. Contrary to predictions of government-led innovation being a “way station” on the road to a free-­market economy, the share of state enterprises in the Chinese economy has grown in recent decades. Meanwhile, the share of Chinese-built parts in the high-tech products it assembles and exports has fallen.

via ‘The Myth of America’s Decline,’ by Josef Joffe –

Playing Chicken in Kiev

Where is Ukraine?

Why you should pay attention to Ukraine–and the surprising resolve of protesters–who have been resolute in the largest protest there since the Orange Revolution:

The true surprise — and one that should inspire democrats around the world — is the spontaneous and spirited resistance of Ukrainian civil society to this about-face. For more than a week, Ukrainians have been protesting in the Euromaidan, and in front of government buildings throughout the capital and across the country. They have done so in miserable winter weather and in the face of police brutality.

What is important about the demonstrators is their certainty that democracy matters, and that it can be made to work. That’s remarkable, because this is 2013, not 1991, or even 2004, when the Ukrainian Orange Revolution prevailed, and then sputtered.

Democracy and independence are no longer shiny imports. Ukrainians have enjoyed some version of both for more than two decades; nine years ago, starting with protests in the same square, they succeeded in getting the democracy and the independence-minded president they wanted.

via In Kiev, High Stakes for Democracy –

At the same time, by forcing Ukraine to chose between Russia and Europe, Nicolai Petro argues that this essential country weakens its ability to play the “bridging” role that it inherently possesses and has performed in the past.

Most corrupt? Afghanistan, North Korea, and Somalia Lead in this Category

The annual list of is out and a two-thirds majority scored poorly:

So which countries are the most graft-ridden? According to Berlin-based Transparency International’s Corruption Perception Index for 2013, Afghanistan, North Korea and Somalia are tied for that dubious distinction.

The global corruption-fighting organization notes that more than two-thirds of the 177 countries surveyed scored below 50. That’s on a scale from zero, or perceived to be highly corrupt, to 100, or perceived to be very clean. (The three worst countries all got an 8, and Ukraine, now racked by protests, got a measly 25). “The abuse of power, secret dealings and bribery continue to ravage societies around the world,” says Transparency’s Dec. 3 press release for the index.

via Afghanistan, North Korea, and Somalia Are the World’s Most Corrupt Countries, With China in the Middle – Businessweek.

See the real thing here–including past reports back to 2001–at the NGO website: Corruption Perceptions Index.

Switzerland’s Proposal to Pay People for Being Alive –

The kernel idea behind the basic-income movement, described as stimmig, a German word that could be translated to be “coherent and harmonious”:

This fall, a truck dumped eight million coins outside the Parliament building in Bern, one for every Swiss citizen. It was a publicity stunt for advocates of an audacious social policy that just might become reality in the tiny, rich country. Along with the coins, activists delivered 125,000 signatures — enough to trigger a Swiss public referendum, this time on providing a monthly income to every citizen, no strings attached. Every month, every Swiss person would receive a check from the government, no matter how rich or poor, how hardworking or lazy, how old or young. Poverty would disappear. Economists, needless to say, are sharply divided on what would reappear in its place — and whether such a basic-income scheme might have some appeal for other, less socialist countries too.

via Switzerland’s Proposal to Pay People for Being Alive –