A New Europe? : EI Weekend 2991
It’s the end of the EU as we know it but the grand coalition retains its majority. Whither EU?
Exchange Invest is a unique information resource combining the day’s stories in a newsletter for investors in exchanges/financial markets infrastructure.
Exchange Invest was founded by former exchange CEO and author of the first bestselling book of fintech (“Capital Market Revolution!” FT 1999) Patrick Young. Monday through Friday our daily paid subscriber email discusses the business of bourses of all kinds across the world.
On this day in 1844, Charles Goodyear (1800–1860) received patent #3633 for the vulcanization of rubber, his process to strengthen rubber. He had perfected the process in 1839 and never took out a European patent.
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MACRO THOUGHTS
When looking at the EU, the simple macro is this:
EU growth 2008–2023: 9% versus 86%
AKA The EU economy was at parity with USA as recently as 2008. Since then the EU has declined to being a third smaller than the USA.
We know the EU is in serious difficulty as even the Brussels Bugle itself, the FT (heavily reliant on subscription and advertising income from EU folks and EU related entities) has recently headlined:
Can Europe’s Economy Ever Hope To Rival The US Again?
FT
NB The ECB cut Euro interest rates (while other major central banks appear to be holding off) which took place for the first time in 5 years on the Thursday of the Euro election weekend — coincidence? I am unconvinced.
IN BIGWORLD
From Exchange Invest 2984: Friday, June 7th:
The recently published Allianz Pulse reveals
“We asked 6,000 people in the large member countries Germany, France, Italy, Spain, and Poland, as well as Austria, about their views on political and economic issues, and their outlook for the future. We found that only the Spanish (net percentage: +25.8%) and Austrian (+21.5%) respondents seem happy to be part of the EU. In Germany (which used to be “pro-European”), Italy and Austria, the opinions are almost evenly split, while French respondents remain firmly “anti-European” (-22.3%).”
Economic growth — 50.5% overall — was the most important topic in every country.
- “Indeed, most respondents are gloomy about the economy, albeit to different degrees. While French (net percentage¹: -45%) and latterly also German (-32.3%) respondents are very pessimistic about the current economic situation, Polish respondents are by far the most optimistic ones, though pessimists still dominate (-2.8%). In Italy, thanks to better economic performance in recent years, the sentiment has improved, though it remains rather gloomy (-17.6%). “
Will the EU listen to what Allianz term the “Cri de coeur?” They note bluntly:
- “Despite the divisions and concerns, Europe is not lost. The majority of respondents can rally behind one “simple” goal: economic growth.”
That 29% of Germans seeing the benefit of EU membership is a number that ought to drive fear into the heart of Brussels — more EUrope is not the answer, only economic growth can save the Bloc now.
NEXT TUESDAY: IPO-VID LIVESTREAM
Guest: Cees Vermaas
June 18th, 2024
1700 UK, 1800 CET, 1200 EST
Cees Vermass has been CEO of the Channel Islands’ based “The International Stock Exchange Group Limited,” since November 2020. He was formerly CEO of CME Europe Ltd, CEO of Euronext Amsterdam and Head of European Cash Markets for NYSE Euronext. Prior to that, he spent a decade working in IT and programme management roles within leading Netherlands based companies Philips and Delta Lloyd Group.
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EXCHANGE INVEST WEEKLY PODCAST
Texas Breaks Cover,
Weimer Jumps Out Of The Deutsche ‘Box’,
And FESE Appoint Brilliant New Director General
The Exchange Invest Weekly Podcast 249
BITCARNAGE
Strictly Mormonic?
I read the SEC shuttering their Salt Lake office and immediately presumed there were statistics inferring crime in Mormon majority areas is now insufficient to justify the presence then it became apparent it is all related to a conspicuous SEC failure:
SEC To Shutter Office Behind Failed DEBT Box Crypto Lawsuit
CoinDesk
SEC To Close Regional Office After Judge Dismisses DEBT Box Case
Cointelegraph
…And thus the smallest SEC office meets its demise. (QV EI 2978).
SEC To Close Salt Lake Regional Office
SEC
If you enjoyed this excerpt you may be interested to know that you can read Bitcarnage every day in Exchange Invest.
Alternatively, if you want to follow Bitcarnage — the daily update on happenings in the world of crypto and digital assets, then you can find Bitcarnage as a standalone on Substack.
OF INTEREST
As always, a review of interesting reading to provoke thoughts and consideration… Not sure we agree with much of it….but it’s thought-provoking!
PLY: Let’s start with a fabulous podcast where John Hulsman deconstructs the EU with his typical acute accuracy (trigger warning if you are a Brussels true believer but you need to hear this:)
Macron And The Rest Of The European Elite Are Living On Borrowed Time: They Haven’t Even Begun To Understand Why They Are So Unpopular
John Hulsman Substack
Now that’s the macro and if you’re harumphing right now, here’s the Brussels Bugle, the home paper of the Eurocracy:
European Leaders Need To Wake Up — The World Has Changed
FT
Of course there was an election last week and this was — as we know from the meeja — a meltdown where the EuroParl leapt to a massive right wing meltdown. Except, not so fast, here’s some excellent perspective from the Spectator editor Fraser Nelson:
The Truth About The Rise Of The ‘Far Right’ In Europe
The Spectator
“Look closely and the results are a lot more nuanced.” Indeed.
That said, there are clear pointers here that cynicism (see Bigworld above) about the European project is in the ascendant. Equally the Spectator even has authors worried their editor is too benign and there are greater issues ahead e.g. The EU May Struggle To Find Its Way Out Of This Election Crisis.
There are also those who lump together anybody not in the dire mainstream of failed Euro-politics and clump them all as “right wing populists” as is the case with this frankly lazy analysis from Unherd: The New Populist Map Of Europe — UnHerd. Even they note the incompatibility of many of the newly elected groups with others in the EuroParl, precisely because Conservative traditionalism with big socialist spending and high taxes is not remotely right wing, even if they may be legally authoritarian. This is as dull and dumb a trope as the (especially acute in Germany) rant of the mainstream against neoliberalism — which is a term of abuse for endorsing anything that is not socialism). At least Thomas Fazi notes elsewhere in Unherd: Europe’s Insurgent Right Won’t Change Anything, although again the lazy right wing trope is ubiquitous.
FWIW, my position remains the problem with the EU is essentially just two things:
- The precautionary principle — which means, for example, the EU has led the world with legislation to control AI …which will have the result of AI development taking place anywhere but in the EU.
- Vast over regulation of everything in a hideously prescriptive manner qv this complaint: EU Ill-Prepared To Implement Its Own Deforestation Law, Says Grain Trade Association reported by Reuters.
John Hulsman is wont to note the old Gilet jaune one liner referring to the EU elites:
“They are worried about the end of the world, we’re worried about the end of the week.”
…The result of this is the serious loser of the EuroParl elections was the Green Party. 2019 looks like a high water mark of the eco movement, back in the day when folk still eulogised the Swedish Doom Goblin whereas now an ‘adult’ Greta Thunberg appears to be busy wearing a Keffiyeh and being arrested for supporting Hamas at demos.
The precise results are here 2024 European election results and will be further updating after we go to press, so if this editorial is a seat of two wrong here, that’s why! However the greens lost hugely (-19 seats now holding 52) and the Liberals (“Renew”) lost 22 seats to end with 80. Von Der Leyen still has a chance of renewing her Presidency as her party the EPP did best and actually gained 8 seats
However as can be seen in this graphic from Jabberwocking:
The big winners are “non aligned.” The issue is that what the meeja calls “far right” are often anything but and moreover they come in a variety of genres. Thus Meloni is essentially Scrutonite Conservative but the factionalism as we go across the ‘right’ spectrum (besides I find the idea of protectionist traditionalist nationalists like the Socialist PiS being labelled even “right’ is absurd). There is a fair bit of horse trading to come as these folk will seek to create political groups and thus gain all manner of subsidies while if the 2019–2024 Parliament is a guide, EU officials will try to clip the wings of anybody who is not for ‘le projet.’ How that amounts to ‘democracy in action?’ Well go figure.
Let’s finish with the Telegraph — I know the UK is melting down and the awful Labour government to come may get closer to the EU just when Brussels needs to renew itself but it’s an instructive discussion from Matthew Lynn including talk about the recent outburst where we found out — shock! — that rarely seen outside Frankfurt DB1 CEO Teodor Weimer the epitome of the grey many in a suit has even had enough of Germany’s ongoing political disorganisation:
Germany Is Descending Into Chaos — And It Will Take The Rest Of The Eurozone Down With It
The Telegraph
IPO-VID LIVESTREAM PODCAST
In this episode, we chat with the former CEO of the Botswana Stock Exchange, Thapelo Tsheole, about this dynamic economy and its financial markets.
Thapelo recently transitioned to a new role as the CEO of the Rwanda Capital Markets Authority. We discuss his insights on both markets and the exciting developments happening in Southern Africa.
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Books worth reading:
FINANCE BOOK OF THE WEEK
“Where Are the Customers’ Yachts?: or A Good Hard Look at Wall Street” by Fred Schwed jr is a fascinating look at sell side and buy side first published in 1940 which remains an evergreen read about the business of investing.
Get the book here.
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VICTORY OR DEATH
Victory Or Death” is a must-read book for anyone interested in the intersection of Blockchain, Cryptocurrency and FinTech giving a holistic view of the future of markets.
Available worldwide.
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LAST WORD
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