Currency reform: Back in Cold War times that phrase always sent a cold shiver of fear down the spines of those living in the Communist Bloc. What seemed so reasonable in the government announcements – hey, too many zeroes have accumulated on the currency through inflation, let’s simplify things by knocking some of them off all prices! – all too often turned out to conceal hidden measures designed to punish earners of “black” wages (by forcing them to go to official offices to exchange the cash hoard they were holding that was about to become worthless) or even simply eliminate large swathes of purchasing power from the economy (e.g. by declaring notes of certain denomination to be no longer valid).

Citizens of what was then known as the “Free World” have by-and-large been spared such abuses. Indeed, here in the Eurozone we have the common European currency, a medium of exchange not subject to the whims of any one national government. What’s more, it was adopted on 1 January by yet another EU member-state, Estonia. Yet that was recognized by most observers as somewhat of a bittersweet occasion; taking up the euro does say important things about the extent of that country’s European integration, yet the sovereign debt financial crisis with which the EU has struggled for a little over a year has revealed several cogent reasons for a country to regret ever giving up its own national currency.

But I’m not out to talk about any of those here. Rather, let’s get back to the “currency reform” scam: it’s the damndest thing how prices seem to rise whenever a country adopts the euro! You see, all prices, wages, etc. have to be converted then by a fixed conversion-ratio – for example, it was 2.20371 for the Dutch guilder – and usually the new price that results is not a very round number. No, much better to make it so – and do you think that merchants then round it upwards or downwards?

Any of you out there over the age of twelve knows the answer quite well – strange, isn’t it, how wages and bank-account totals don’t benefit from a similar rounding? – and so the result inevitably is an otherwise uncalled-for bit of inflation. That’s what made the Germans nickname their new currency the Teuro (teuer is “expensive” in German); on a local note, I can remember how Amsterdam bars, in particular, raised their prices under the quite shameful assumption that their customers were not capable of doing elementary division with a calculator.*

Naturally, then, the same thing has come to Estonia, as we see in a pieces from the Polish national daily Gazeta Wyborcza: Inflation in Estonia highest for two years. Specifically, December’s inflation rate was 5.7% higher than it was in December, 2009. (And how much was that? Annoyingly, the article prefers to use differential rather than absolute inflation rates.) We do know that inflation was high there throughout the last part of the year, as last month’s rate was also only 0.5% higher than last November’s. The main commodities driving this are listed as mainly foodstuffs and non-alcoholic beverages. (Can we hope, then, that the owners of Estonian drinking establishments actually restrained themselves?)

Anyway: Welcome to the club!

*Interestingly, grocery-store prices were mainly converted in a straightforward manner – mainly because Dutch consumer-rights organizations promised to watch them like a hawk!

In her new commentary on the EU and Serbia in Die Zeit (Europe threatened by Humiliation), Andrea Böhm posits the sort of counterfactual you would expect:

Suppose there were relevant indications that the leader of an Islamic terror-group, responsible for the murder of several thousand people, were hiding himself in a high-rise apartment in a European capital. How long would it take before a multinational army of secret services and investigators would come swarming to observe every garbage-dumpster, illuminate every floor, and if necessary evacuate half the building? Two months? Three weeks? Ten days?

But what is really at issue is not Islamic terrorists at all, it’s rather the high Serbian government officials responsible for war crimes in the Yugoslav Wars of some 15 years ago, in particular General Ratko Mladic. According to Ms. Böhm, he’s clearly somewhere in Belgrade and it shouldn’t be too difficult to find out exactly where. Yet not only is no one going after him (nor after the other wanted Serbian official, one Goran Hadzic, former leader of Serbs in Croatia – him I did not know about), but there has just been alarming signs of weakening in what had been the EU’s insistence that Serbia would be allowed no further progress along the road to becoming an EU member-state until these two fugitives were delivered up to the UN Yugoslavia Tribunal in The Hague.

Granted, the Serbs are still far from EU membership, just as they seem equally far from agreeing to do anything to deliver up Mladic and Hadzic. Nonetheless, EU foreign ministers meeting in Luxembourg last Monday did agree to at least open Serbia’s formal application process. And that is the “humiliation” Ms. Böhm speaks of in her piece’s title – Europe once again exposing itself as a softy on the world stage by unilaterally climbing down from what had been it’s ironclad insistence on seeing the two fugitives in jail at The Hague (actually, at Scheveningen, if you want to be technical about it) before the Serb government would even be allowed inside the door. What happened to the Dutch? she wonders – they were the ones single-handedly (well, with occasional Belgian support) holding out on this insistence. She speculates that it all began to seem too much like some sort of Dutch “obsession” – an irrational thirst for revenge against the Serbs for the humiliation suffered by the “Dutchbat” troops who had been assigned to protect the civilians who were massacred at Srebrenica in 1995, so that the Netherlands government finally became self-conscious and too embarrassed to insist anymore.

In point of fact, the situation seems quite a bit more subtle than all that, as explained in a recent entry on the Economist’s “Charlemagne” weblog (in English, of course). Why did the EU foreign ministers budge in the first place? Because they wanted to reward the Serbian government for recently agreeing to meet with leaders of Kosovo, which ordinarily Serbia regards as a renegade break-away province (much as the People’s Republic of China views Taiwan). More to the point, it seems that they made that concession yet at the same time they didn’t: at least according to the Economist analysis, unanimity among governments (meaning the renewed potential for a Dutch veto) will be necessary again soon for Serbia to make any further forward progress.

EU officials are skillful at this sort of sleigh-of-hand, whereby they seem to give something away while in reality doing nothing of the sort (while still retaining the option of giving it away again sometime in the future, should that be viewed as necessary). But all this is hardly to Ms. Böhm’s taste. The EU needs to remember, she writes, that it bears a share of the blame for the horrors of the Yugoslav War; it happened in its own backyard, it was Europe’s big geopolitical test – and, of course, it failed it, having to rely in the end on American diplomacy and military power to rein in both Serb depredations in Bosnia and Croatia and the Milosevic government’s attempt to ethnically cleanse Kosovo. So fancy procedural games for her won’t cut it – much better a full-court military/police press, as if tracking down some Islamic terrorist-leader were what was at issue.

Today’s foreign-press reference comes courtesy of the New York Times Sunday editorial page, which cites a recent interview I missed in France’s Le Figaro of Cardinal Joseph Ratzinger, Vatican prefect of the Congregation for the Doctrine of the Faith. The Times editors condemn Cardinal Ratzinger – who can accurately be termed the Vatican’s ideologue-in-chief, and so is certainly close to Pope John Paul II – as a “meddlesome cleric” for offering his view that Turkey is “in permanent contrast to Europe” and so does not belong as a member-state of the European Union. Perhaps mid-August is a slow period to find things to comment on, or perhaps those Times editors really are so enthusiastic about seeing Turkey join the EU, but it’s at least curious that they want to offer comment on a piece which the vast majority of their own readers cannot read themselves – readable, in fact, only by ipso facto traitorous John F. Kerry-types who know French! – and so who are dependent on the quotes and extracts that those editors are willing to reproduce for them in English. A prime case, one could think, for EuroSavant to go take a look. (more…)

As the May 1, 2004, date for the accession of the ten new EU member-states approached, most current EU members started to get cold feet about the Union’s “free labor mobility” aspect, which is supposed to mean that any EU citizen can go work freely in any other EU state than his own. For the Spanish or Portuguese moving to, say, Austria or Germany, that’s OK – studies show that in fact European workers are generally to little inclined to leave the home and culture they are used to to make use of this facility anyway. But then all those Czechs, Hungarians, and especially Poles? – who could even triple the value of their current wages at home by moving into their new brother EU countries, and/or who would be eligible for the much more generous social welfare programs over there if their job-search did not pan out? That was something else again; in the face of this, that “free labor mobility” would simply have to be suspended for a while, and most current EU member-states accordingly took advantage of provisions gained in accession negotiations with the ten entering states to set up various (temporary) restrictions on those nationals being able to come to their countries to gain work or social welfare benefits.

Ireland was the exception, imposing no such restrictions. And well it would not, since Ireland has continued to be the “Celtic Tiger” high-growth economy – at least relative to other pre-May, 2004, EU members – that attracted so much attention from international observers in the late 1990s. Today unemployment is still under 4% there, meaning that labor is in short supply, and foreigners are flocking to supply it – particularly foreigners from Ireland’s new fraternal EU member-states, and particularly Poles. This phenomenon is described in the article Promised Green Island by Jedrzej Bielecki in the mainstream Polish daily Rzeczpospolita. (more…)

You would really think the Czechs would be looking forward to 2004. After all, this is the year when, on May 1, they finally enter the European Union. True, there’s no new-and-improved Constitutional Treaty in place yet to adjust the EU to the reality of ten new members, but that’s (hopefully) just a matter of time; in any case, at least Vladimir Spidla’s government (no matter what the opinions of President Václav Klaus may be) can’t really be blamed for the constitutional hold-up.

But that’s not the case, as a pair of articles by Petr Holub in today’s Hospodárské noviny reveals. As Holub points out at the beginning of one (The More the Union Approaches, the More Czechs Are Afraid), “Half of the people think that they will have it worse [in the coming year], and the cause is what they themselves approved in a referendum – May’s accession into the European Union.” (more…)

Today I’m on enforced exile from my reporting and commentary upon parochial Netherlands concerns. Still, not all the important things that are happening have to do with Iraq. An important case in point is the EU Athens summit, at which the fifteen current EU member-states and all ten candidate states yesterday signed the Accession Treaty. (Recall that only three of those states – Malta, Slovenia, and Hungary, in that order – have yet held the national referenda authorizing actually joining the EU in a year’s time. And Cyprus, due to its special circumstances, will hold no referendum at all.) (more…)