Monday, June 23, 2008

Euro 2008: A Glimpse at the Future of Europe

It's often said that "art imitates life." Sometimes, so, too, does sport. In watching the 2008 European football championships, Macro Man has been struck how each of the four semifinalists in some way represent the future of Europe in a way that, for example, the host nations (Austria and Switzerland) never could. Consider the impact of the following four countries:

1) Germany. It's fitting that Germany's made the semifinals, as they have been, are, and will continue to be the most important country in the European Union. For the past several years, ECB monetary policy has been made for the primary benefit of the German economy; it's almost been like having the Bundesbank back again. Waiting for an ECB rate cut? When the German economy shows definitive signs of rolling over, you'll finally get one.

2) Russia. If Germany is the most important nation in the European Union, Russia may well be the most important country in the European continent. In a resource-hungry world, Russia's been blessed with an abundance of fuels and minerals that give it significant economic leverage. And Czar Vladimir I of the Chekist Empire is, by all accounts, not afraid to use this leverage. Much like their erstwhile Communist colleagues in China, the Russians have burst upon the global economy in the past half-decade in a less than subtle fashion. And while they've been happy to participate in organized multilateral events such as these Championships, in the economic sphere they've been mostly unilateral. How they choose to deploy their energy resources and manage their currency piss-taking could be vital to the European economy (and, potentially, security) in the coming years.

3. Turkey. Turkey represents a choice facing the European Union. Do they embrace multiculturalism and engage the world's most Western-facing large Muslim country? Or do they drive yet another barrier between the Islamic world and the West by denying the Turks membership to the EU? Certainly the latter option is favoured by certain xenophobic segments of the European population and the politicians who cater to them. Fortunately, by the time that Turkey has negotiated all the acquis chapters for EU membership, the time of the xenophobes may have passed. And while Turkey's importance may currently be more geopolitical than economic, in the fullness of time its large, youngish population may be just the thing to energize the European economy and support its ageing workforce.

4. Spain. Spain represents all those Eurozone economies harmed by the ECB's "one size fits all, as long as it's Germany" monetary policy regime. For years, ECB policy was too easy for the likes of Spain and Ireland, leading to substantial property bubbles. Now that those bubbles have popped, policy in those countries is arguably too tight (though perhaps not, given the rate of inflation.) What does seem clear is that as it approaches age 10, the single currency experiment is facing what may be one its largest challenge: a real disconnect amongst the constituent economies that cannot be solved with a single monetary policy. While the Spanish weren't allowed to vote on the Lisbon Treaty, Ireland (facing similar problems to Spain) rejected it, perhaps in part because of the suboptimal monetary policy that they've received. How Europe deals with dissonance between core and periphery will be vital in determining the future of the single currency.

Still, things could be worse. There was one team in the competition which represented the cynical pragmatism and, ahem, willingness to push the boundaries of both sportsmanship and the rules that has made the EU bureaucracy such a morass of corruption and waste. Macro Man refers, of course, to Italy, with their defensive catenaccio "eleven men behind the ball" tactics and their eagerness to dive at every opportunity. For those watching last night's quarterfinal against Spain, there was poetic justice in the fact that Antonio di Natale ("let me roll back onto the pitch with my 'injury' so the ref will be sure to stop play") missed the decisive penalty in the shoot-out which brought Spain victory.

Hey, perhaps there's hope for Europe yet.

A note to Italian readers: when your teams play football, they can be a pleasure to watch. Sadly, diving appears to have become an epidemic in the Italian game in recent years. Sort it out!

12 comments:

Bengt said...

Spooky, just like in politics/economy/whatever, my nation took part but were unable to influence the outcome. After winning the first game, raising hopes, we were crushed by the Russians. I hope that doesn't turn out to be a sign of things to come...

Richy Rich said...

None of this is as important as the news in the telegraph today.

Following on from Trichet kicking any euro doves in the teeth, then the stunning ONS release of UK retail sales last week we now wonder wether the same statisticians are responsible for the story which has just stunned a market that had been fully positioned the other way around.

I am shocked and stunned.
http://www.telegraph.co.uk/news/newstopics/celebritynews/2175496/Blue-Peter's-Valerie-Singleton-'I-had-a-fling-with-Peter-Purves'.html

Macro Man said...

Bengt, I can only assume that you're from Sweden....which, on the basis of this analysis, makes your nation more relevant to the future of Europe than, oh, the UK, which went oh-for-four in terms of qualifying for the tournament...

Charles Butler said...

Why not extend the analogy?

Italy played it 'business as usual' - let Spain dominate the game and we'll play the counter attack, because they're in the end undisciplined and have no defense. Que sorpresa! Spain, looking ever so much like Russian hockey teams of the 70's, stuck to their plan and were otherworldly when it came to keeping Iker out of trouble. Hmm?

On the other hand, the preference displayed by the ref vis a vis a potential finalist against Germany was a little much. Especially the cheesy yellow given to Cazorla for disputing a call in the dying moments of OT2.

CB

Anonymous said...

Wonderful analogy MM! I too have been dismayed at the incessant diving of Italian sides of late and the constant complaints of Italian soccer officials and even Silvio when an official's call goes against them (as happens to every side). How did it come to this, after the class of Zoff, Baresi, Baggio, and Maldini? Is this not a precursor of things to come in terms of its sagging productivity, crumbling infrastructure, and bloated welfare state after a glorious past?

Macro Trading Ideas said...

Yes, a lot of italian soccer player seems "hard" as their nice top-model-showgirl girlfriends.. what a sadness!!!At least we have "snarl" Gattuso to counterbalance them..
Italy results are a reflection of reality, not a precursor of things to come (rather they're better...)

Hubert said...

reg Turkey,

2 nice Turks born in Germany play for the Turkish national team.

Germans vaguely tried to "integrate" turkish people, not understanding how much more difficult this would be compared to former "Gastarbeiter" from Portugal, Italy., Greece and Spain.
The result could be worse, but still is poor. Turks cluster and keep their way of doing things notwithstanding German legal and cultural rules.

Looking at demographics, the upside of full Turkish integration into EU is a peaceful "bicultural" society in Germany within 2-3 generations.

The downside is less peaceful.
Why should Germany run the risk considering it is substantial?
Macroman, as you won´t share in the downside from London, please cut the other side some some slack.

RebelEconomist said...

Apt analogy MM. Written off as "old", the Germans quietly live within their means, producing saleable goods and becoming increasingly competitive in a fixed exchange rate regime, while others indulge themselves, become uncompetitive and then demand that the constraints be eased. The English replace a competent leader with a fool who does something stupid to show how hard he is and are eliminated. Meanwhile, the Americans ignore the rest of the world and play their own games in competitions which they call "world series".

In short, globalisation is simple: countries pass goods, services and capital, and at the end, the Germans win.

hubert said...

Rebeleconomist,

and the winnings they give to the Landesbanks, Daimler and Siemens. Those institutions buy Wall Street products, US car companies and pay billions in fines for the few, stupid ways of corruption still not legalized in the US.

The money then is back in the US and the game can start again.......

unsecured debt consolidation loans said...

Anaylisis can be based on Sweden's figures and facts but it certainly can come across any European nation.

Anonymous said...

MM, just to add on the diving theme. Thats the single biggest reason why i stopped watching soccer in general unless something really big such as the Euro cup or so... i.e. this dreadful habit of acting is not reserved to Italians only... its disgusting really seeing even stars such as Ronaldo the other day falling after a challenge, wait till the ref looks his way and then suddenly starts the act of agony only to perform the equivalent of 100m dash in about 9.5 seconds in less than a minute after that incident. Hello! something doesnt add up here! how much longer this is gonna be tolerated??? Cheers, Bitr

Macro Man said...

Bitr, you're right, and the diving is one of the things that prevented me from paying attention to soccer before I moved to Europe. Sadly, "simulation" has worked its way into every part of the game; if Steven Gerrard were not playing for Liverpool, for example, I'm sure he could do a job for the GB Olympic Diving team.

Given the choice between watching footballers tumble like bowling pins or watching Bryan 'Copa' Habana racing down the wing for a try, I can see why you might favour the latter...