No matter if and when the Bund-BTP spread will narrow, there is another one which is even more meaningful:

8.9% – 5.5% = 3.4% this is the real spread. Unemployment.

Unemployment in Italy vs unemployment in Germany. Understated. Because who does not work in Germany gets access to Harz IV and for this reason is visible to the job market. Whereas in Italy there are many unemployed who, for lack of formal welfare, do not even show up in the stats.

This spread won’t go away just because a few hedge funds change their mind. It’s structural and it needs structural solutions. But we’ve been talking so much about this theme. It becomes boring, right?

Knowledge, training, investing in skills, languages…always the same mantra. Things that Italian companies don’t do. And that the Italian society does not reward. It rewards free riding. Something that you cannot export, actually.

But now, it’s the moment of truth: o mangi ‘sta minestra, o salti la finestra…

Photo: reblogged from E.Guerra

Suggested outfit for tomorrow’s summit on the new fiscal compact.

The news of the weekend put Germany in the limelight again, with its request that EU has a say in the way Greece spends the monies which are given by Europe.

Seen from here, tout se tient. It’s the Harz IV-isation of Greece. Harz IV being the law which regulates the payment of welfare benefits to the unemployed in Germany.

As you may have seen even in the movie 24h Berlin, Harz IV officers have a say in the personal budgets of recipients. If the recipients have kids, they receive more money. Rent payments have to be secured, and a single recipient is allowed to rent up to 53 square meters. In the movie there was a case of a recipient, with a family, who wanted to buy a dog for the son. The officer explained him that the Eur 200 for the purchase of the dog were not the problem: it was the rest of the budget for the ongoing care of the dog – pet food, vaccination, microchip, regular vet visits (and I suppose also the dog tax) which put the budget out of reach of the recipient. Also, the officer explained that too many dogs get abandoned because owners all of a sudden realise that a proper care is financially incompatible with the welfare benefits.

Now one may think it is heartless to deprive a family of a dog. But if the result is that the dog (or the family!) is underfed, the animal abandoned, well probably it’s not wrong. True, the State is getting into the nitty gritty of one’s life. Still, the State is providing life support and money. Hopefully until the rough patch is bypassed and a new job is looming at the horizon.

Now, I am not surprised if the same State thinks that, before bailing out Greece, EU should have a say on how the money is spent – especially if the track record is one of non-responsible spending. A friend of us recently toured Greece. Old people having to find little jobs, a new breed of poverty. If the State did not spend responsibly, well, it should be observed because in the end it is not acting in the best interest of its citizens, apparently.

A few months ago Envoyé Spécial, the French reportage by Françoise Joly and Guilaine Chenu, showed in its “Les pompiers de la crise” how the EU task force had to fight to make Greece’s ministers understand that no, they did not need spend absurde amounts of money, in November 2011, for asking consultants how to save money!! The EU negotiator, a kind but appalled lady, was without words. If some welfare, because this is what we’re talking about, needs to be paid to Greece to bridge the rough patch, well, as any welfare recipient the country has to bear the burden of a nosy Harz IV officer. And has to go to the training course for a new job.

PS

I never bought greek bonds. Interest rates were high and attractive, yes. But at school I learnt that risk and return are two faces of the same coin. The banks who found greek bonds so attractive should take the loss on their teeth and claw back the bonuses of those who took the bright decisions, bonuses paid in 2007, 2008, 2009, 2010, 2011…

Source: Der Spiegel (Oslo Opera)

I campaign for a cap on the production of powerpoint. There’s just too much of it in our lives, like air conditioned draughts on planes, LCD screens in Italian railway stations, CO2 in cities, balsamico on soups, rucola in sandwiches. It’s a dangerous form of pollution. It may be necessary but sometimes it’s bordering on overdose. And: it is bad for your brain.

In German board rooms there’s a lot of iPadding, in meetings in London or Frankfurt some clients take notes on their tablets (wonder how they do). Paperless meetings are on every corporate agenda.

So you can imagine my happyness the other day when a colleague in research came in the meeting room with his laptop, switched it on and then switched off the projector and started to do its presentation using a blackboard. Not an electronic one: a black one. And he used chalk.

I must say that I remember every concept he explained. He resorted to the use of his laptop only for showing a video at the end. Maybe there are some receptors in my 1960s-produced brain who are particularly sensible to blackboard and go in overdrive (like supercar) when the chalk handwriting arabesque start forming on a black and rough surface. And when those characters are crafted by mathematicians, with a self-contained and rounded writing, bingo…the well-being factor of seing maths on a blackboard without an Econometrics exam approaching release all my memorization endorphines.

I wonder what happened to the APP party, the anti-power point party that our friend Paolo the other day recalled in one of our e-mail conversations. They should campaign at the Nespresso coffeemachines in any corporation. They would find acolytes galore.

Back to the company, I must say that here limits apply. There is always a limit to the number of slides. Regulations – we’re in Germany, remember! – for contributions in Committee discussions say that your slides should be in American English (pity – I prefer British), maximum 5 slides. And this is already a big achievement. Still there are ways to get around regulations (also in Germany, yesss). There always BackUp Slides, and god knows how many of those (small) presentations are prepared!

On my first day of school I got punished. I was talking too much and the teacher sent me “behind the blackboard”. I advocate the same punishment now for those committing powerpoint abuse. Catholic-style: re-customize a 90-slide presentation 17 times without any help by assistants, on your iPad (screen keyboard only) between 19.45 and 8.30.

We love the Astor Film Lounge. Can’t wait to spend an evening with aperitivo and movie…We love the 1950s architecture!! Quelle bombonnière!!

Berlin!!! Two weeks…and we will be there!! Can’t wait to take in the Berliner Luft and the Berlinale atmosphere…

Since December 6th, 72,133 readers answered.

Source: The Economist

Fabulous video (from Pino) with Tom Hanks philosophying on Germany, Berlin and Eisenhüttenstadt…and Autobahn!

Well done…since 2 months I see this stupid campaign “don’t be a maybe” at my Stadtbahn stop. Now an Unknown Artist, blogged on FB by Street Art Hamburg  did this fabulous détournement. Thanks Pino for sharing!!

This is Berlin. Better a Polish cigarette than these tired tricks, innovative among Mad Men fifty years ago.

I don’t know…to me what Merkel says makes a lot of sense. Is it so hard to understand that in its selfish dreams Germany also needs demand and growth in the Rest of Europe in order to be able to power ahead with its exports, and not a weaker Europe? And that a growth fuelled by printing banknotes or bailing out ships threading water by writing white cheques would be a catastrophe, especially for the weakest economies?

Budget discipline means collecting taxes from those who should pay them, spending on the right projects with have something similar to a ROI and not idiot infrastructure like the Ponte sullo Stretto or decorative kerbs in Spain, supporting the right kind of welfare: the one that enables workers in declining industries to acquire new skills, not nepotist public (or private) low productivity sector jobs. And the unions’ objective should be to negotiate good terms without putting the country on its knees on one side and becoming themselves a protected kast on the other side?

But everybody knows that the nations’ daddies are those who promise gifts, play football and masquerade as Santa. And good moms are those who enforce math homework, room cleaning and spinach eating. There are still gender stereotypes in Europe, and women are the ones which make things work in 80% of cases. More balanced roles would be preferable, but the math exams are tomorrow, the vitamine count is low, kids are panicking and distracted, so someone’s got to keep the pieces together. You’ll get the ice cream, but first eat your greens.

More on Davos here.

Davos-Klosters, Switzerland, 25 January 2012– Europe needs to move forward with structural political reforms if it is to resolve its sovereign debt crisis and put to rest doubts about its unity and viability, German Chancellor Angela Merkel said in an address to participants in the opening plenary session of the World Economic Forum’s 42nd Annual Meeting. At the core of the crisis are weaknesses in the competitiveness of many European countries, she remarked, noting that deficits have accrued over the years. “There is a clear lack of political structures and underpinnings to make this work,” Merkel acknowledged. “We are not going to become faint of heart. But we will not be able to wave a magic wand to address this. Yet at some point in time we have to do something about these weaknesses.” Concluded the German leader: “The question is: Do we dare to have more ‘Europe’? In the year 2012, yes, we do dare.”

In her speech, Merkel called for structural reforms that would allow for genuine labour mobility in Europe so that people can move to where jobs are and be able to take their pension rights and insurance with them. She said that, while Germany strongly supports the single European currency, it is not prepared to make any guarantees. “It is not that we don’t wish to show solidarity and have binding commitments. But what we don’t want is to promise something that we can’t fulfil.” Merkel added that she would like to see the G20 pursue the agenda for growth and employment set out by Mexico, the chair this year. G20 countries will also need to work on financial market regulation and securing free trade against increasing signs of protectionism, she said.

Prior to Merkel’s speech, Eveline Widmer-Schlumpf, the President of the Swiss Confederation and Federal Councillor of the Federal Department of Finance of the Swiss Confederation, welcomed participants. She stressed that countries have to address the long-term challenges of chronic fiscal imbalances and climate change. “Both of these issues will affect future generations,” Widmer-Schlumpf declared. “We must not burden the young with the problems that we have created.”

With record participation of over 2,600 leaders from government, academia, business and civil society, the theme of this year’s Annual Meeting is The Great Transformation: Shaping New Models. “We have a vision gap in the world,” Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said in his opening remarks. “My wish is threefold – that we build by searching for constructive new solutions and models, that we bond by looking for long-term vision, and that we bind by creating the necessary underpinning framework of shared values.”

Source: WEF, CNN and FT