United Federation of Europe - Far from there yet: Towards a truly 'European' Union - by Zdzisław Krasnodębski

When one hears the ensuing speeches of past and present presidents of the European Commission, one is left with the impression EU policy has been a series of successful triumphs, that the Union is champion of the world and that Europe is flourishing.

It seems only the pandemic, global warming and the activity of 'Eurosceptics' or 'populists' attempting to halt the Union's progress, that do not fall in line with this optimistic, complacent self-portrait.

It is enough, however, to look around and see how much more detached from reality this image has become. In fact, we Europeans are now constantly confronted with a series of growing, unresolved problems and successive crises, which we handle only on an ad hoc basis.

Read more at: Towards a truly 'European' Union

World Soccer Cup: What France and Belgium’s World Cup success says about European immigration - by Afshin Molavi

While the World Cup has taken center stage of the sporting world this summer, the immigration debate has taken center stage in European politics. German Chancellor Angela Merkel’s government nearly collapsed over divisions among her coalition partners on immigration. In Britain, unease over large numbers of migrants helped fuel the vote to leave the European Union. And in France, the National Front’s Marine Le Pen put up a more formidable fight than her father during her 2017 loss to President Emmanuel Macron, capturing a third of the French electorate. She, too, famously lamented that “when I look at Les Bleus, I don’t recognize France or myself.”

Read more: What France and Belgium’s World Cup success says about European immigration - The Washington Post

The Netherlands: Local elections 2018: what the parties say about integration

Democracy In Action. Not only Dutch Armenians, but also Dutch Turks, Dutch Moroccans, Dutch Kurds, Dutch from Suriname and Antillean decent and many other nationalities, who immigrated to the Netherlands, will be running in the upcoming Dutch municipal elections on March 21.

In Amsterdam alone there are 28 parties participating in the municipal elections. The Dutch municipal elections of 2018 will be held in 335 municipalities in the Netherlands. This election will determine the composition of the municipal councils for the following four years.

Ahead of the March 21 local elections, Dutch News asked the main parties in the 10 Dutch cities with the biggest international populations to set out their position on three key issues: housing, integration and jobs.

Here are their answers to the question: ‘Local authorities have a key role to play in integrating new arrivals and ensuring they learn Dutch. How is your party planning to encourage the international community to integrate fully into local life?

Click here to read the complete report: Local elections 2018: what the parties say about integration DutchNews.nl

Insurance Industry: "The masters of deception are becoming vulnerable"

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Could the "happy days for the Insurance Industry be over?

Given a terrible customer service track record and bloated infrastructure, the global insurance industry stands poised to be disrupted.

Nimble, tech-driven firms are challenging the status quo, using behavioral economics and technologies like IoT and cloud to target inefficiencies in the insurance value chain ranging from customer acquisition to back-office processing.

In the fourth installment of PitchBook’s Fintech Analyst Report series, our emerging-tech analysts dive into the consequent segmentation of insurance, exploring how the industry’s value chain is being disrupted. Key points of discussion include:

• The burgeoning variety of niche products
• How conglomerates—especially in developing markets—are leveraging synergies to appeal to emerging masses of middle-class consumers
• Peer-to-peer insurers returning the industry to its roots

The report also profiles companies in each nascent insurance sector, drawing on the PitchBook Platform to lay out key data points on investment in the space.

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Given a terrible customer service track record and bloated infrastructure, the global insurance industry stands poised to be disrupted. Nimble, tech-driven firms are challenging the status quo, using behavioral economics and technologies like IoT and cloud to target inefficiencies in the insurance value chain ranging from customer acquisition to back-office processing.

In the fourth installment of PitchBook’s Fintech Analyst Report series, our emerging-tech analysts dive into the consequent segmentation of insurance, exploring how the industry’s value chain is being disrupted. Key points of discussion include:

• The burgeoning variety of niche products
• How conglomerates—especially in developing markets—are leveraging synergies to appeal to emerging masses of middle-class consumers
• Peer-to-peer insurers returning the industry to its roots

The report also profiles companies in each nascent insurance sector, drawing on the PitchBook Platform to lay out key data points on investment in the space.

The analog business processes still prevalent in the insurance sector suggests roots in antiquity. The fundamental function of insurance as the pooling and sharing of risk dates back to the ancient world. Maritime societies from the Greeks, to the medieval Genoese, to British merchants all employed schemes to pool resources in financing risky trading voyages.

The Romans formed funeral societies to pay for and conduct funeral rites for members from shared contributions. Sir Edmund Halley (of comet fame) compiled an early actuarial table of death rates in order to establish a fund for widows and orphans of Scottish clergy.

The industry began to take its modern form in 19th century Britain and America when large corporations emerged to insure against various forms of catastrophe, while government regulations popped up to both encourage the purchase of insurance policies and to prevent insurers from operating unscrupulously. Insurance operates assymetrically, with customers paying relatively small monthly premiums and insurers on the hook for large but irregular payouts. This creates the opportunity for unscrupulous businesses to promise terms that they can’t ultimately uphold. Insurers might be tempted to try and pull off cash-flow underwriting by selling insurance below cost and gambling that they will make up the difference with risky and/or speculative investments. The tactic drives sales in the short term, but becomes unsustainable when claims can no longer be paid out to policyholders and the insured are no longer covered against catastrophe.

Governments in many cases incentivize participation in insurance as well as other retirement benefit and pension schema such as 401ks in the US. Life insurance is used as a form of tax arbitrage in many jurisdictions in order to provide a defined benefit for survivors while making contributions tax deductible. Individuals choose to purchase insurance (or are compelled to by the government) due to natural risk aversion. Consumers pay more than statistically necessary in premiums, hedging against extreme tail risks while ensuring a profit for the insurer after deducting administrative costs. The price of premiums includes the not just the actuarial expected loss, but also the cost of running a business and the cost of capital, i.e. firms need to generate a return for investors.

In the US, private health insurance emerged first during the early 20th century as a way for hospitals to finance emerging pharmaceutical research and improved education by getting groups of people to pay in advance for medical care on a monthly basis through their employer. During the World War II-era economy, wages were fixed so employers began enticing workers with more generous health benefits.

In the high-tax postwar era, contributions became tax-deductible, further incentivizing employee plans. This system created a private system with a high degree of price opacity since patients would rarely see their full bill.

Fast forward to present day, insurance premiums alone make up 7% of US GDP. Sir Halley’s previously mentioned Scottish Widows fund grew into a corporation acquired by Lloyds Group for £7 billion in 1999. While insurance doesn’t always merit inclusion into the buzzy fintech vertical, the stubbornly analog nature of the industry makes it extremely exciting for venture capital investors. Globally, the insurance industry covers all manner of risks from life, disability, healthcare, fire, burglary, collision, and professional and business insurance including cybersecurity and medical torts. Government programs like Medicare and more recently The Affordable Care Act have added a further degree of complexity in the US due to the layering of public and private primary and secondary coverage.

Insurance also covers to a large degree the risks assumed by the financial and shadow banking sector, e.g. AIG’s role in the financial crisis and wealth management products in China. Insurers are incentivized to specialize in niche risks in order to find pockets of mispricing. Insurers typically hedge some of their own exposure via reinsurers which lend capital to rapidly growing direct insurers.

Reinsurers have played a key role in technology transfer to developing markets. Local governments are often wary of foreign entities yet local operators need foreign seed capital and expertise. Thus it makes sense to partner with foreign reinsurers who have the expertise and access to technology as well as the balance sheets to de-risk partner firms. The growth of emerging markets over the last several decades with billions of new middle class consumers around the world have played a prevalent role in insurance sector growth strategies.

While insurance largely remains an extremely analog industry, technology has begun to play a crucial and increasing role, impacting all facets of the insurance business. Improved data, often from connected devices, improves the pricing of risk. Thus, when companies know more about their customers, they are able to partner with insurers or insurance products directly to better serve consumers, building ecosystems around loyalty and trust. This puts pressure on incumbent insurers to improve their customer service both via online user experience, and by increased alignment of consumer interests. This comes both from the incorporation of new tools and data to calculate risk, but also a fundamental shift in business models within the insurance ecosystem.

Historically, the insurance value chain has been linked, with each company offering multiple lines of insurance and managing that business line from customer acquisition and marketing to underwriting and back office as well as other intermediate and related processes. The horizontally and vertically integrated insurance model will begin to be disrupted along both planes. The integration of digital-only players into the insurance ecosystem will only further vertically segment the entire insurance value chain. This segmentation will only align the interests of companies and consumers as players focus on the niche where they hold maximum comparative advantage without depending on cannibalizing other parts of the value chain to extract profits.

The increase in data utilization has facilitated alignment in stakeholder interests from across the insurance value chain such as removing the financial incentive to delay or deny legitimate claims. Companies have increased information on consumers throughout the marketing, sales and customer service processes. Players that leverage this information in novel ways will be able to generate sizable comparative advantage.

The bottom-line for the Insurance industry is that only the strong,who have been able to stay in step with innovation, coupled with an ability to integrate high-tech marketing information kin their sales efforts.

Insurance-Digest 

EU Refugee Crises: Germany has got their act together

Germany's push to integrate migrants - http://www.bbc.co.uk/news/world-europe-36382703

Read the complete report click here

Unity and Integration: Let's hear it for the US - the EU still has a long way to go on this - by RM

UNITY IS WHAT COUNTS

Yes indeed -This time let's hear it for the US. 

To those of you who are sometimes critical of the US (including myself) it must also be noted there are still quite a few positive things happening there

This in spite of the steady progress made by Corporate America to get an ever stronger grip on the US political system and economic environment.

 Here is one of the developments that I believe is quite positive.

Even though not everyone might be impressed by the Presidential candidates running for office to replace President Obama, what is impressive, on the other hand, is that among the candidates running for the Presidency are, a woman, two Cuban Americans, a Socialist and a Fascist.

All hoping to replace a black President, with a Muslim father from Nigeria and a Christian mother from Kansas, USA

In a way, as Europeans, we can certainly learn from that, if we ever want to overcome our rampant religious, racial and cultural phobias, and achieve real unity.

EU-Digest

Eurozone: Merkel and Hollande devise a plan for the future of the eurozone

The two leaders are expected to unveil a joint proposal on the future of the eurozone by the end of 2016, once they have set aside their own differences over how to pursue integration. EurActiv France reports.

For Germany's Minister of Finance Wolfgang Schäuble, the situation is clear: whatever differences may exist, progress is vital. "Europe is currently facing major challenges. It is our shared responsibility to move Europe forward," he said.

Known as a strong advocate of tight monetary and fiscal policy, the minister spoke at the 48th French-German Economic and Financial Council, a biannual discussion forum held between the two countries.

"François Hollande and Angela Merkel will make a joint proposal on the integration of the Economic and Monetary Union by the end of the year," said Michel Sapin, the French minister of finance.

This proposal is likely to be a compromise between Hollande 's desire to create a real eurozone budget, along with a separate eurozone parliament, and Merkel's more cautious position.

Read more: Merkel and Hollande devise a plan for the future of the eurozone | EurActiv

A United EU is closer than you think - The people want it. The elites are the obstacle - by Miguel Otero-Iglesias

There is a strong consensus on the eurozone crisis among economists and political analysts both in Europe and the United States: for the eurozone to endure, it would need to develop into a fiscal union and, consequently, a political one. In the same breath, however, influential commentators argue that this is politically unfeasible in the current context of a heightened North-South divide within Europe.

And there seems to be a strong consensus among pundits that political union in Europe is a pipe dream.
The problem is that this oft-repeated assertion — usually invoked as if it were irrefutable — is thrown at audiences without a shred of evidence to back it. The naysayers simply point to the latest European parliamentary elections as clear evidence of a rising tide of Euroskepticism.

In doing so, they err, for they equate Eurocritics with Euroskeptics. The French National Front and UKIP are against the very concept of the EU; but they should not be confused with Spain’s Podemos, Syriza in Greece, and the Italian Five Star Movement, who are against this EU in particular.

There is a big difference. If you give Alexis Tsipras, Pablo Iglesias or Beppe Grillo the chance of having a federal and democratic union, with a Commission president directly elected by the peoples of Europe, they would very likely sign up to it. Give it to Nigel Farage or Marine Le Pen, however, and they would laugh in your face. That is the difference between Eurocritics and Euroskeptics.

Even among the Euroskeptics, the anti-EU rhetoric has a voting ceiling. Europe’s main political divide is not between those for or against the EU, but between those who are more cosmopolitan — and largely in favor of further integration under the principle of subsidiarity — and those who would like to withdraw behind their national borders.

That is why the National Front, UKIP and Alternative for Germany have switched from anti-EU rhetoric to anti-immigration discourse. They realize that their potential voters are not anti-European, but rather those who have lost out from globalization. Euroskeptics comprise no more than 15-20 percent of the electorate of any European country. In Germany, the EU’s largest member state, the figure is even lower.

That Euroskeptics are no more than 20 percent does not necessarily mean that the remaining 80 percent are keen to create a United States of Europe; far from it. However, the figure does call into question the widespread assertion that political union in Europe is impossible. There is little conclusive evidence on the subject. However, data from the Eurobarometer — the closest we have to a gauge for measuring public opinion in Europe — suggest that Europeans want more, not less, integration.

The difference is whether they live or not in the eurozone. While 67 percent of those within the zone are in favor of the euro, only 35 percent outside it are. In the UK the figure is 20 percent, but in Germany it rises to 74 percent. The same can be said about having a European identity. Up to 62 percent of those in the eurozone feel that they are European as well as their own nationality, but outside the eurozone the figure is 53 percent. Not surprisingly, only 39 percent of Britons feel European (compared with 64 percent of the French).

"For or against a European economic and monetary union with one single currency, the euro" 67% said yes,, 26 % said no, and 7% said they don't know.

"Do you see yourself as Nationality only; European and Nationality; European only; or Don't know;"-  61% considered themselves European and national, 34 % said they were more nationally oriented, 2 % said they considered themselves only European and 1% did not know./

Overall, the limited evidence available strongly suggests that Britons do not want further integration, but that all other Europeans, especially those in the eurozone, are more open to the idea. Fortunately, the Eurobarometer asks two more specific questions on the topic.

One is whether more decisions should be taken at the EU level. In that respect, ‘only’ 48 percent of Europeans are in favor, so enthusiasm about giving more power to Brussels is tepid. However, there are still more in favor than against (40 percent). Yet again there is a difference between the percentages within the eurozone — 50 percent — and those outside — 43 percent. 

The second, and more important question, is whether the EU should develop into a federation of nation states. Here, only 41 percent are in favor, but, again, those against are even fewer, at 34 percent. A whopping 25 percent just do not know. 

It may well be that the peoples of Europe (especially in the eurozone) want more integration, but that it is their national governmental elites that are holding back because they stand to lose the most from a greater degree of union.

For the latest  EU Barometer polls click here 

EU politicians should take their head out of the sand and start smelling the roses - by RM

It's decision time for the EU

Europe must stop waffling in its attempts to move ahead towards more political and economic integration. It needs to do so if if it wants to project an image of a more credible and united entity.

Turning the clock back to individual statehood status, with every nation its own  borders and currency would mean instant suicide in today's world of Super Powers, including, China, the USA, and to a certain extend also Russia. These countries are all lying at the doorstep of EU's "weakling countries", ready to "gobble" them up.

If the EU falls apart, so would the present influence of each member state which they presently have under the powerful combined "nations umbrella" of the EU. Prosperity as EU citizen's now have enjoyed for many years would end not only abruptly, but also in a brutal fashion.

A solution, to solidify and further strengthen the European Union as a major world power, and to create even more economic prosperity for its citizens will require, not only for some of the member nation states politicians to abandon nationalistic pipe-dreams and look at the "big picture", but also to encourage them into making some dramatic changes to the structure of the EU. This would also include abolishing policies and treaties which have been unproductive, costly and caused more harm than good.

These changes could be achieved based on the following outline:

1) By referendum on a new EU constitution, which incorporates the following provisions:

a) establish the EU citizen as a full partner and decission-maker in all matters of government - by increasing the powers of the EU parliament, giving them the political authority to appoint the EU commission, based on the outcome of election results of the European parliamentary elections.

b) establishing a second chamber in the European parliament where all chairmen of local member state parliaments would be represented, having the power by majority vote to approve or oppose any resolution or proposal submitted by the EU Parliament or EU President.

c) the election of a EU President by universal vote, covering every member state of the European Union.

2) establishment of a permanent and strong European defense force

a) the defense force budget based on the proportional contribution in money and manpower (GDP and population) of all EU member states

b) review of all present military alliances by the EU (including those of individual member states) and establish a common EU defense force policy

3) establishing a common EU foreign policy based on:

a) the EU's economic and political interests and alliances with countries supporting EU's policies

b)  the projection of a neutral position in relation to the geopolitical policies and interests of other nations

c) seeking economic alliances instead of military alliances

It is high time European politicians take their head out of the sand and start smelling the roses.

EU-Digest

France: Many French Muslims Find Lives Of Integration, Not Separation - by Eleanor Beardsley

Excited children shout out the answers during a Sunday afternoon Arabic class at the grand mosque in the Paris suburb of Argenteuil. The mosque has thousands of worshipers and is one of the largest in Western Europe.

Aboubakar Sabri is a part-time imam there. During the week he runs a successful elevator-construction firm in Paris. Sabri came to France from Morocco in 1980 for doctoral studies at the Sorbonne, then stayed and raised three daughters.

He says Muslims can live perfectly well in French secular society.

"We've succeeded in France, and we are totally integrated," he says. "Our kids attend the public schools. We love France. On Friday we say prayers for France, because if France is in good shape so are we. We are all in the same boat."

These days there is a lot of talk about the couple hundred Muslims suspected of being involved in extremist activities — and about those who feel excluded from French society.

But the fact remains that France has the largest Muslim population in Western Europe — a number estimated to be anywhere between 5 million and 8 million — and the vast majority are integrated into French society and helping shape the future of the country.

Read more: Many French Muslims Find Lives Of Integration, Not Separation : Parallels : NPR

USA - The Racial Devide: How Racists and Partisans Exploit the Age of Obama - Norm Ornstein

One of my fondest memories was spending four days in February 1977 as a staffer sitting on the Senate floor, mostly wedged between Gaylord Nelson and Russell Long as the Senate debated a resolution to reform its committee system. They were good friends, lovely people, and great storytellers, and I mostly sat there taking their conversation in, occasionally earning my pay by letting them know what a particular provision of the resolution did or what an amendment would do.

At my request, Long opened up his Senate desk so I could see the signatures of all the senators who had used the same desk over many previous decades. The signature of Theodore Bilbo just jumped out at me. Bilbo was a legend—and not in a good way. In his two Senate terms representing Mississippi, from 1935 to 1947, he stood out as a mean and vicious racist, not shy about spouting ugly bile on the floor or elsewhere.

He wanted pure segregation and ultimately to send black Americans to Africa. He said, "The experiences and history of thousands of years prove that whenever and wherever the white and black man have tried to live side by side, the result has been mongrelization, which has destroyed both races and left a brown mongrel people." When he filibustered an antilynching bill in 1938, he called its supporters "mulattoes, octoroons, and quadroons." He use the "N" word incessantly, in and out of the Senate. Among a large collection of segregationists, he stood out for his ugly rhetoric and incitement of white Southerners to violence. As I sat on the Senate floor 37 years ago, I thought, "Well, we have at least come a long way."

Read How Racists and Partisans Exploit the Age of Obama - The Atlantic

Integration With A New Twist: "The Nederlandse Bruid" - Standing Europe’s Muslim integration debate on its head

Sometimes a novel can get across what others’ lives are like more indelibly than the best-written news story. That’s certainly the case for the Turkish-Dutch marriage at the heart of Jessica J.J. Lutz’s new novel “De Nederlandse bruid” (De Geus, 2014)

Like good non-fiction, the confident handling of a faraway culture has clearly been years in the making and draws on decades of experience. But a well-told tale transports the reader more completely to the heart of a normally inaccessible group of characters. And at a time when Europe is struggling with questions of Muslim, Turkish and other integration, it neatly flips the debate on its head by following a European migrant into Muslim lands.

The story of “The Bride from Holland” is that of a young Dutchwoman, Emma, an under-employed recent university graduate who decides to follow love and the star of her fate. When her fellow-student boyfriend has to wrap up his studies in Holland suddenly and take over his dying father’s business, she leaves her homeland behind and travels east to stand at his side in his new job: Clan lord of a remote Euphrates mountain valley in Turkey’s Kurdish borderlands.

Despite her privileges, Emma soon finds she has exchanged the middle-class comforts of north Europe for hard work, chronic feuding, codes of family honor, everyday deaths, loves, jealousies, suffocating traditions and lies that live for generations -- the kind of all-or-nothing society that Shakespeare had to go to mediaeval Italy to find. For days after finishing the story, I couldn’t shake this completely convincing world out of my head and wished that I could have stayed a part of it for longer.

The tightly woven plot is seamlessly sustained -- a wedding, a murder, a suicide, adultery, treachery, ancient gold, a road, a mountain insurgents’ war and more -- without losing for a moment a sense of Turkey’s intimate, audio-visual reality. People live vividly in the present tense but are unable to cut themselves off from their past. And along the way, a first-disoriented Emma is forced to grow up, find herself and discover that even today, eastern-marcher lords and their ladies, like everyone else, have many a dragon to slay before they can hope to secure their realm or riches.

Lucky Dutch readers, who are already able to devour this book: Buy it now! And producers of Turkish sitcoms, you need look no further for your next dramatic story. 

As for those worried Europeans who struggle to make sense of how their societies are becoming ever further intertwined with those of their Muslim countries to the east, 

I hope one day you will get the chance to read “The Bride from Holland.” Europeans are right to be worried by the problems of slow development in their eastern neighborhood. But there’s a lot Europeans may not know and above all do not feel about their neighbors. When they finish a rare book like this, truly and elegantly able to reflect the inner dynamics of Anatolian society, they’ll find that they are a lot less scared.

Note EU-Digest: Not only every European, but certainly more inward and nationalistically inclined European politicians like Mr. Wilders should be reading this fantastically impressively written book.

Read more:  The EU Way: Standing Europe’s Muslim integration debate on its head

European Integration: Why Brussels Needs To Read Karl Polanyi - by Kurt Huebner

The project of European integration is going to run into walls. In political terms, it has become evident that its active as well as its passive support is decreasing. To some degree this loss in faith is tied to the social implications of years of austerity policies that were imposed to many nation-states in the EU. 

Persistently high rates of unemployment and a reduction of real household incomes are no reasons to be supportive of a project that is widely seen as elite-driven as well as mainly in the interest of export-sectors.

Electorates in relatively better-off member states, on tbe other side, are no longer willing to act as guarantors of crisis-ridden neighbors.

 Moreover, and at least as relevant, is the rise of political parties and movements across Europe that see the return to the nation state as a recipe for all kinds of problems, also for the ones that are not in any way tied to the EU. In economic terms, the project of European Integration is facing a long-run period of stagnation or at least of very low economic growth. 

Neither Brussels nor the member states seem to be prepared to work against such a path or to be prepared for dealing with the underlying forces of shifty towards a low growth path. The investment initiative of the Juncker Commission can, at best, be a drop in an empty bucket. In terms of legitimacy, 

European Integration has lost a lot of its appeal, and this is not only reflected in decreasing participation rates in European elections but more so in the emerging new form of economic governance that contradicts basic rules of democratic self-control by potentially taking away significant political sovereignty in the budget process.

Why Brussels Needs To Read Karl Polanyi

The Berlin Wall: Twenty-five years on

Since 1789 pieces of the Bastille have been sought-after decorations on mantelpieces in France. Two centuries later, bits of the Berlin Wall have travelled all around the globe. It is “the only monument that exists on all continents,” except possibly Antarctica, says Axel Klausmeier, the boss of a Berlin foundation for its remembrance.

That says a lot about what Germans call their “peaceful revolution”, which climaxed with the breaching of the wall on November 9th 1989. This weekend Germans will mark its 25th anniversary with a celebratory bash.

As the first successful liberal revolution in German history, 1989 ranks in importance with 1789, says Rainer Eppelmann, head of a foundation studying the East German dictatorship. Even better, unlike that French revolution 200 years earlier, the German one was non-violent. Because the Berlin Wall divided not just a city but also a country, a continent and the world, its fall implied a global promise of liberty. In geopolitics the “end of history” seemed possible, though it later gave way to a “clash of civilisations”, as duelling book titles put it in the 1990s.

German expectations were highest. “Now what belongs together will grow together,” predicted Willy Brandt, a former chancellor and mayor of divided Berlin, the day after the wall fell. Contemplating the environmental and economic dereliction of 45 years of communist rule, Helmut Kohl, then chancellor, envisaged “blooming landscapes” in the east.

A generation on, Germans still debate whether they have grown together and to what extent the east has bloomed. In terms of motorways and other infrastructure, the east sparkles today. In certain social indicators, such as women’s participation in the workforce or the enrolment of toddlers in crèches, it even leads the west. But overall, according to polls, eastern Germans are still less content than westerners.

After years of net migration from east to west (which only recently abated), parts of the east are depopulated, especially in rural areas. Eastern Germany’s GDP per head is still only 67% of that in western Germany. Its productivity is 76% of the western figure and the number of patents filed just 29%. Its unemployment rate is 9.7% to the west’s 5.9%. Apart from a few industrial clusters, the east has hardly any large companies (see article).

Yet a closer look reveals that the differences within eastern and western Germany are now greater than those between them. Saxony in the east, especially around Dresden and Leipzig, is comparable to Bavaria and Baden-Württemberg, two vibrant regions in western Germany. Parts of Lower Saxony and Westphalia, in the west, are as downtrodden as Brandenburg or Mecklenburg, in the east.

Read more: The Berlin Wall: Twenty-five years on | The Economist

The European Economy Spring 2014 - by Andrew Watt

The main message for European policymakers from the IMK economic forecast last week – available in German here – is that while there are strong grounds to hope for the best, concrete steps need to be taken to avoid the worst. Let us start with the good news and then ponder the risks, before recommending appropriate policies.

The European economy appears finally to have turned the corner. In the euro area the recession was overcome in the course of last year and employment has bottomed out. The IMK expects growth of 1% and 1.7% in the euro area in the current and coming year respectively. Thanks to faster growth in the UK, Poland and some smaller economies outside the common currency area, the EU as a whole will grow rather faster.

 Even in the crisis countries the signs are at last encouraging. Greece will continue to contract, on annual averages, this year but a substantial rebound is expected in 2015 (3.2%). Spain and Portugal will grow slightly below and rather above the euro area averages this and next year; unemployment is already falling, in Portugal rapidly. Meanwhile Italy continues to lag, stagnating this year and with sub-par growth in 2015 (0.8%).

Read more: The European Economy Spring 2014

The Great European Battle Between Necessity and Identity - by Jan Techau

Not less but more Unity

The EU has always attempted to square the circle between what’s needed and what’s possible. That has never been easy, but the bloc is now facing the most terrible—if not existential—dilemma of its six-decade history. If Europeans want to retain the great life they have, they will need a lot more European integration. At the same time, more integration would almost certainly destroy the EU.

In terms of necessities, most people agree that the EU needs to improve greatly. It is suffering from a lack of democratic participation. It must protect the economic and security interests of its member states in a globalized world. It must make its currency work, or abandon it. And it must do more to be a strong and credible partner for the United States in the global competition over who defines and enforces international norms and values.

Each of these agenda items will require more cooperation among EU countries. Taken together, these issues make a formidable case for “more Europe.” Of course, more cooperation does not automatically mean more integration. Often, cooperation can be done intergovernmentally, without integration.

But cooperation at the level required to tackle Europeans’ needs will demand significantly more integration, at least in some crucial fields. Cooperation is also a whole lot easier when member states share their sovereign rights through common, treaty-based organizations. Look at the EU today. The parts that work best are, by and large, those that are integrated, such as the single market and trade policy.

If the EU wants to tackle its democratic deficit, it needs two things. The first is subsidiarity, which means making decisions at the lowest level possible. If done right, subsidiarity is a powerful tool that can avoid the need for more integration. But there are some parts of the EU in which subsidiarity is not an option.

In those fields, the EU needs a second instrument: more democratic legitimacy. Shared markets, external policies, fighting crime, consumer rights, energy grids, and environmental standards all require top-level decisionmaking. In such cases, those making the decisions need a democratic mandate. Where law making exceeds the remit of member states, national constituencies are not sufficient to authorize such legislation.

Truly democratic decisionmaking on common European policies needs a common European electorate. In other words: making the EU more democratic will require a European body politic. And that means more integration.

On foreign policy, if the EU wants to protect its global interests, defend itself against external threats, and shape its neighborhood, it cannot do so with atomized external policies. Less and less national glory can be gained in the international market by comparatively small nations. If Europe wants to make its voice heard, it will have to become a more unified—and integrated—foreign policy player. The limits of intergovernmental cooperation have become all too obvious, especially in recent months.

The same goes for economic growth. Reform efforts are still primarily national issues, yet on closer inspection, reform agendas look strikingly similar across the EU. More open markets, smarter tax and spending policies, and better investment are among the priorities of many member states. In a system of closely integrated economies, business is about more than just free trade. Economic upswings and downswings are a shared fate. And that fate makes it desirable to adopt shared fiscal and social policies—and perhaps even shared taxation.

National reform plans have proven ineffectual. Germany violated the EU’s Stability and Growth Pact; Spain failed to regulate its banking system; Greece cheated its way into the euro; and Italy shunned labor market deregulation. The bottom line is that more prosperity in an aging continent will likely mean more economic integration.

The list goes on. No matter how one twists and turns the needs of Europeans in the twenty-first century, it is hard to avoid more integration—not across the board toward an ever closer union, but in select policy fields.


 Read more: The Great European Battle Between Necessity and Identity - Carnegie Euro

Islam and Social Democrats: Integrating Europe’s Muslim Minorities - by Jonathan Laurence

The Niqab (Al-Ahzab 33:59)

The first serious divergences between Muslims and the left in Europe began with the fatwa issued by Iranian Ayatollah Khomeini against Salman Rushdie in 1989 and religious demands to censor his novel, The Satanic Verses. The split widened later that year, when France began to restrict the wearing of girls’ headscarves in schools.

Until then, parties on the left had embraced the mostly working-class minority as a natural ally. Migrants from Muslim majority countries first began settling permanently in Western Europe in the 1970s and ’80s. The unexpected transformation of receiving countries into “immigration societies” provoked nationalist and racist reactions on the right, while parties on the left appeared the likely beneficiary of the influx of future voters.

As right-wing rhetoric about Islam becomes increasingly toxic, there is political space on the left for a more robust and liberal defense of Muslims’ religious rights. With demographic projections showing continued growth of the Muslim population in Western Europe before leveling off at 25 to 30 million people (or 7–8 percent of the population) in 2030, political parties have no choice but to look upon Muslim voters as Benjamin Disraeli was said to view the nineteenth century working classes: like angels imprisoned in a block of marble. If Muslims’ religious identity isn’t welcome on the left, then Muslims for whom practicing Islam is an important part of their lives will try to carve out a tolerant space elsewhere—whether by retreating from broader European societies or forming new identity-based parties.

If left-wing parties want to appeal to this electorate over the long term, it is crucial they discover the meaning of state neutrality in the complex institutional settings of European nation-states. The Princeton philosopher Kwame Anthony Appiah recently wrote that countering extremism requires “an alliance of those of all faiths and none who can live with and tolerate cultural difference against those, wherever they live and whatever their religion, who cannot.” This basic plaidoyer to get on the right side of that battle for toleration is still necessary, and still too uncommon. Paradoxically, in order to keep religion out of politics and to overcome the boundaries of Muslim community, the left needs to take an active, engaged role in shaping the contours of this minority’s religious interactions with state and society.

Timothy Garton Ash’s “liberal pentagram” (inclusion, clarity, consistency, firmness, and liberality) provides the kind of ambitious but critical policy framework needed to encourage different faith communities to arrive at the same indispensable conclusion: the law of the land is the law. This cannot happen unless the institutions that deal with religion engage with Muslim religious organizations and leadership—including the least progressive groups—to create analogous ties to those the state already maintains with all other major faith communities.

This will require acknowledging that long-term progressive goals may supersede short-term progressive values: a headscarf ban in public school classrooms might seem like great political theory to some, but what if the parents of girls most in need of “integration” simply send them to segregated schools as a result? And if gender-segregated swimming hours at the local municipal pool are generally granted to women who want to swim alone, what business is it of the state whether they do that for “feminist” or “Islamist” reasons?

Rather than defending liberal order, left parties have become so worried about losing votes that they feel compelled to cater to populist temptations about Islam and immigration more generally. Even British Labour leader Ed Miliband recently returned to the old saw that “migrant workers” are an inherent threat: “It’s not prejudiced when people worry about immigration. It’s understandable. And we were wrong in the past when we dismissed people’s concerns.” However concerned politicians may be about losing the Muslim vote, they are more worried about the potential wrath of anti-Muslim voters in their own ranks.

This may be the reason parties on the left have tried hard to emphasize non-religious collective identities. But when the left “bets against God,” as the Italian intellectual Giancarlo Bosetti has put it, it simplifies everything as a battle for power between the secular state and religious authorities—and forgoes potential alliances with faith communities that share common moral, economic, and social ground.

Without the basic integration of Muslim religious communities into existing state-religion structures, the religion issue will remain a grievance that unites this minority in feeling Muslim—regardless of how religious they are otherwise—in response to the hysteria over halal, hijabs, minarets, and niqabs. If the parties of the left don’t want to lose voters to new religious formations, they must create the conditions for people of faith to feel more comfortable in national institutions. There is room for more complex answers than those offered so far.

Read more: Islam and Social Democrats: Integrating Europe’s Muslim Minorities | Dissent Magazine

Britain's drift from Europe: The Stone Raft?

In “A Jangada de Pedra” (The Stone Raft) the Portuguese writer José Saramago imagines Iberia literally breaking off from the rest of Europe. The earth trembles, the Pyrenees split and the peninsula floats across the open Atlantic. The novel dramatizes Spanish and Portuguese insecurities about their place in “Europe”, a term that they—like Britons—tend to use in the third person.

Talk of such an option betrays the real difficulty: Westminster struggles to understand the vast political project creaking into life across the English Channel. For Britain, the relationship with the EU is transactional. For those nations at the core of Europe, a sense of shared destiny oils the wheels of compromise. The French-German partnership, reaffirmed today in Berlin, rests on intense, regular deal making, a habit honed through cohabitation and coalition-building in domestic politics. It transcends ideological differences (such as those between Angela Merkel and François Hollande) in a way that befuddles Britons. The next burst of political and economic integration, likely to begin in earnest after September’s German election, will advance it much further.

Hence the bafflement amongst Britain’s neighbours. The notion of outright, near-unilateral demands—a “shopping list” is the term used by the London press—is about as far removed from the agenda in Paris, Berlin and Brussels as it is possible to be. Yet it lies at the heart of Mr Cameron’s plan to keep Britain in the EU. Small wonder, then, that the plan looks shaky

In parts of London tonight a slight smell of rotten eggs hangs in the air; evidence of a fire at a chemical factory in Rouen, in northern France, earlier today. Evidence, too, that the “continent”—still—lies a few dozen miles off the south coast of England. Politically, though, Britain increasingly resembles a stone raft. The content of yesterday’s speech may decide whether the institutional partnerships that tether it to the mainland will still be there in five years.

Read more: Britain's drift from Europe: The Stone Raft? | The Economist

Future of Europe Group plans closer EU integration

Closer integration

Eleven EU countries have drawn up a plan to strengthen the 27-nation bloc and make it a bigger global player.

German Foreign Minister Guido Westerwelle headed the "Future of Europe Group", which met in Poland's capital Warsaw on Monday.

The group, which does not include the UK, says the eurozone crisis has caused a "crisis of confidence" in the EU.

It says the European Commission - the EU's executive arm - must be stronger and its head could be directly elected.

The Commission has already acquired more powers of oversight in the crisis, scrutinising national budgets to ensure compliance with EU targets. The new controls are considered necessary to prevent any reckless accumulation of debt in future.

Besides Mr Westerwelle, the Warsaw meeting brought together the foreign ministers of Austria, Belgium, Denmark, France, Italy, Luxembourg, the Netherlands, Poland, Portugal and Spain.

Read more: BBC News - Future of Europe Group plans closer EU integration

London Olympics: Netherlands' Kromowidjojo wins 100m freestyle

 Dutch flyer Ranomi Kromowidjojo led from the blocks to win the women's 100m freestyle swimming gold medal on Thursday.

The Netherlands' newest Olympic swimming star went into the Olympic final as the fastest woman in the world this year and confirmed her ranking with victory in the pressure of a Games final.

The 21-year-old covered the first 50m in 27.24secs before hitting the wall in an Olympic record of exactly 53sec to land her country's second gold in the event in the last 12 years.
  
Kromowidjojo, whose father is from Surinam and paternal grandparents from Indonesia, was a member of the Dutch team that won gold in the 4x100m freestyle relay in Beijing.

Note EU-Digest: Another example that immigration and integration does have its benefits.
 

Read more: London Olympics: Netherlands' Kromowidjojo wins 100m freestyle - The Times of India