EP Elections: ‘Where Do You Go?’

7 06 2009

I admit: I have cast my vote in the elections to the European Parliament at about 10.40 am this morning. So, I am one of about 35 to 40 percent of the Austrian electorate – my estimation – that by the end of the day will have cast their vote for the 17 Austrian seats in the European Parliament. In 2004, 42.5% went to the polls.

There were a few novelties for me: For the first time, I made my way to the polling station without any idea who I am going to vote. As resident of Vienna’s most-populated district Favoriten, it is a five-minute walk to the primary school at Keplerplatz, right at the administrative center of Vienna’s 10th district, just off the underground station of the same name and the pedestrian Favoritenstrasse.

While attentatively walking through the streets at a humid but cloudy Sunday morning, I recall No Mercy’s 1996-hit ‘Where Do You Go?’ Indeed, where is Europe heading, I wonder.
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Healthy Euro-skepticism?

25 05 2009

020_19_Merritt

Photo: Giles Merritt (center) speaking at the Public Opinion and Europe symposium. Photo Credit: Matthias Wurz

“Reporting on EU Affairs is boring, and it’s not the journalists’ fault,” exclaimed Giles Merritt, Editor of the Brussels-based bi-lingual journal Europe’s World and Secretary General of the think-tank Friends of Europe, and paused. And while the audience of academics, diplomats, politicians, the occasional journalist and those interested in European affairs caught their breath, he added, with a twinkle in his eyes, “I used to be a journalist reporting on European Affairs.”

Merritt’s provocative remarks were part of an international symposium on ‘Public Opinion and Europe’ held at the Diplomatic Academy on May 6 – 7. Co-organized by the Austrian-French Centre for Rapprochement in Europe and the French Institut Français des Relations Internationales, the conference was chaired by the Centre’s director and former Austrian Foreign Minister Peter Jankowitsch.

In six panel sessions, high-ranking diplomats, civil servants and academics from Austria and a number of EU member states, sought answers to questions on how the public views the European institutions and what could be done about Euro-skepticism. Speakers included French Senator Hubert Haenel, who chairs the senatorial committee on European Affairs; former Director General of Austrian National Bank Heinz Kienzl or Christian Leffler from Sweden, currently Head of Cabinet for EU Commissioner for Institutional Relations and Communications Strategy, Margot Wallström.

The conference concluded at the palatial French Embassy, prominently located at the picturesque Schwarzenbergplatz, in eyesight of the Memorial of the Soviet Army across the large square with its spectacular fountain. As the some 100 participants enjoyed the delicious cuisine française – charmingly hosted by His Eminence Ambassador Phillippe Carré – Giles Merritt, former Brussels correspondent for the Financial Times and regular contributor to the International Herald Tribune, offered and in-depth view on Europe over a glass of exquisite French red wine. Read the rest of this entry »





Krugman Comment: Pröll versus Bankruptcy

3 05 2009

Pröll Budgetrede 21. April 2009Photos: Finance Minister Josef Pröll (standing) delivering the budgetary speech, Apr. 21, 2009. Photo Credit: Matthias Wurz

The plenary chamber of the Austrian parliament was packed by 9:00 on Apr. 21, just like the stands for the general public in anticipation of ÖVP Finance Minister Josef Pröll’s 63-minute presentation of the budget.

At 9:05, Pröll rose from his seat to deliver what was expected to be his most important speech of his career so far, presenting the budgets for 2009 and 2010, which was broadcast live by ORF Austrian Television.

Austria, along with much of the world, is in the worst economic crisis in recent memory and the financial outlook is gloomy. The country’s national debt will increase by 3.5% in 2009 and 4.7% in 2010, well above the permitted Maastricht level of 3%. Consequently, the total national debt will reach an alarming 78.5% of Austria’s GDP by 2013, up from 62.5% in 2008. The bank rescue package (Vienna Review reported, April 2009) weighs with EUR 9.3 billion heavily (2009).

Economic Minister Reinhold Mitterlehner added in Der Standard of Apr. 25 that in order to consolidate the budget in the years to come “we also need new sources of income.” In other words, raise more taxes as the estimated tax income for the state drops by EUR 4.5 billion in 2010. Read the rest of this entry »





NATO passé – Austria’s NATO Strategy

3 05 2009

FRANCE-GERMANY-NATO-SUMMIT-DEFENCEPhoto: from left to right, (Former) NATO General Secretary Jaap de Hoop Scheffer, U.S. President Barack Obama, French President Nicholas Sarkozy and Germany’s Chancellor Angela Merkel at the NATO Summit 2009. Photo Credit: Getty Images

The North Atlantic Treaty Organization (NATO), found cause to celebrate this year: On Apr. 4, 1949, the collective defense alliance was founded in Brussels on the eve of the Cold War. Sixty years later and now with 28 member states – Croatia and Albania were formally accepted this year – the organization set out to redefine its role after the collapse of communism 20 years ago.

For the first time, the annual NATO Summit was jointly hosted by two member states, France and Germany, whose “close partnership during the course of NATO’s history symbolizes a vision of a Europe whole and free,” according to the NATO website. Following the Summit, member countries’ leaders called for a new doctrine, as the previous one of 1999 neither reflects the changes in Russia nor takes global terrorism – like the 9/11 – into account.

The 60th anniversary also marked the return of France to the allied command structure – a move hailed by members, though deeply controversial within France. French President Nicholas Sarkozy defended his decision by saying that now was time for change:
“Our strategy cannot remain stuck in the past,” he urged at a talk at France’s Strategic Research Foundation in mid-March, “when the conditions of our security have changed radically.” France, Sarkozy argued, will have more influence in NATO missions while the independence of the nuclear-equipped French military will remain untouched.

But all seems well without NATO for Austria, now surrounded by alliance members, except Liechtenstein and Switzerland. The dramatic NATO membership plea by news magazine profil journalists Gernot Bauer and Georg Hoffmann-Ostenhof in the article ‘Holt uns da rein!’ (‘Get us in there!’ Apr. 6 edition) did not, however, spark any further political debate. All political parties seem happy to remain neutral, including those who once argued for NATO membership. Read the rest of this entry »





Obama in Prague: The Speech at Hradcany Square – an Analysis

1 05 2009

About 30,000 people gathered at Hradčanské náměstí (Hradcany Square) on Prague Castle of Apr. 5 to hear U.S. President Barack Obama. The whole city seemed to have turned out to hear this most eloquent of politicians, waiting patiently in the chill morning.

Today, 20 years after the fall of the Soviet Union, Obama praised the role the Czechs had played through peaceful protest:

“The Sametová Revoluce – the Velvet Revolution taught us many things,” he said, pausing, to allow the applause to die off. Not only was his pronunciation nearly flawless, said Czechs in the audience, but it touched those who had taken to the streets so long ago.

“It showed us that small countries can play a pivotal role in the world events, and that young people can lead the way in overcoming conflicts.” As in 1989, “moral leadership is more powerful than any weapon.”

Obama’s visit to Prague came at a difficult time for the young democracy, with a deepening political conflict between President Václav Klaus, first post-Communist Prime Minister and architect of the Czech Republic’s economic success of the 1990s, the conservative minority government of Mirek Topolánek and the Social democratic opposition, led by former Prime Minister Jiří Paroubek

On Mar. 24, just days before Obama’s arrival and in the midst of the EU presidency, Topolanek’s government lost a no confidence vote in the Czech Parliament over whether to allow some of the controversial U.S. missile defense shield to be installed on Czech territory. Topolanek will step down by May 8 to make way for a transition government of technocrat Jan Fischer, head of the Czech Statistical Office, before interim elections in October. Read the rest of this entry »





Obama in Prague: The Ceremonial Act

30 04 2009

Barack Obama in PraguePhotos: Matthias Wurz

It was Apr. 2, early in the evening when I received the confirmation via email: an accreditation by the Czech Presidents Office for the visit of U.S. President Barack Obama with Czech President Vaclav Klaus on Palm Sunday, Apr. 5.

There was only one catch: I could only go as a photographer for the Welcoming Ceremony at the castle, also a chance for getting closer to the man. For Obama’s long-expected speech on his vision of peace and non-proliferation at Hradcany Square, I had to take a pass.

My train journey from Vienna to Prague on Saturday evening was uneventful, and the city itself did not seem to be ‘under siege,’ as in June 2006 when former U.S. President George W. Bush came to Vienna.

But that changed the next morning, just hours ahead of the presidents’ meeting. Following advice from the hotel staff, I took public transport to the castle. When I boarded the No. 12 tram near my hotel at about 6:00, every American in the city seemed to be going the same way.

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Paul Krugman: “Stating the Obvious”

15 04 2009

“Absolutely absurd,“ stated Josef Pröll, Austria’s Finance Minister of the conservative ÖVP on Apr. 15 when confronted with the controversial remark by 2008 Nobel Prize Laureate and Princeton University economics professor Paul Krugman with regards to the possibility of Austria’s bankruptcy.

Krugman’s provocative statement with regards to the impact of the financial crisis on Central and Eastern European countries (CEE) at the Foreign Press Club in New York on Apr. 13 sparked high-profile responses and anger in Austria.

When responding to the question of high exposure of Eastern European debt by Austrian banks, and whether that might lead the country into bankruptcy, Krugman responded directly.

“Now it’s a tiny one, it’s Iceland, but that just shows that it can happen, even to advanced countries. Ireland looks pretty bad because of large financial exposure. And Austria would probably be my third candidate in those leads.”

And the New York Times columnist delights himself in his blog two days later of having created a stir by just stating the obvious.

Evidently, Krugman’s comment has revived a debate of the past month when media reports, such as by the Austrian daily Die Presse (‘When, exactly, will Austria go into bankruptcy?’), circulated, sparked by concerns of high account deficits in the CEE countries.

Austria’s banks (not including Bank Austria and Hypo Alpe Adria as foreign-owned), Pröll clarified, have lending exposures in the CEE area of about EUR 200bn – approx. 70% of Austria’s GDP – but they are apposed to savings deposited of 85% of that amount.

The Finance Minister also dismissed the scenario of a complete deficiency of lending, but rather estimates that 10% might have to be bailed-out. The latter seems inevitable, as the European Bank for Reconstruction and Development (EBRD) estimated already in February 2009, that bad debts are likely to exceed 10% of lending in the CEE countries.

Indeed, the severe financial troubles of Austria’s neighbours highlights the huge investment Austria’s banks did since the 1990s in the CEE countries. They are the exposed of all financial institutions invested in the area, led by Raiffeisen with 54% of its risk-weighted assets, and Erste Bank Group (38%).

Evidently Josef Pröll set off for a ‘face-list’ trip to Bulgaria, Romania, Croatia and the Ukraine in mid-February promoting the Austrian government’s proposal for a financial stability pact for the CEE countries.

However, Pröll’s good-will tour sparked fresh concerns for the Austrian financial sector. The Romanian online business magazine Wall-Street consequently titled on Feb. 17 ‘Romania can drive Austria to meltdown.‘ At the same time, Austria’s daily Der Standard estimated that 10% failure of CEE lending would lead to crash of the Austrian financial sector.

Not surprisingly, the rescue plan failed to convince the other EU members, as it seemed motivated by Austria’s self-interest only.

Krugman’s pointed comment therefore, might be exaggerated as Austria’s bankruptcy seems unlikely at this stage, but has a valuable point: The European governments should not dismiss nor underestimate the effect a widespread financial collapse of financial institutions inevitably has when the CEE countries are not stabilized.

If this part of the financial crisis is mishandled, Daily Telegraph columnist Ambrose Evans-Pritchard predicts a “debacle (that) is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung.”

Austria would then certainly play the leading role.