Daily Archives: June 20, 2013

Tony Barber

Nigel Farage at the European parliament (Getty)

In the crystal balls of the European Union’s political and bureaucratic establishments looms a mortifying vision: voters in next year’s European parliament elections punish mainstream parties and vote en masse for their populist, radical right and anti-EU nemeses.

The humiliation of such a result would be compounded if, as has happened in every ballot for the EU assembly since direct elections began 34 years ago, turnout were to sink to a record low. Between 1979 and 2009 turnout fell from 62 to 43 per cent, a trend cited by the EU’s critics to reinforce the argument that the bloc’s shortcomings are not just economic but democratic in nature.

Eurosceptic, anti-establishment and ultra-right parties certainly have their tails up at the moment. To varying degrees, voters in many of the EU’s 27 countries are fed up with economic recession, mass unemployment, the erosion of the welfare state, political corruption and perceived high levels of immigration. A Gallup poll conducted last month in six member-states – Denmark, France, Germany, the Netherlands, Poland and the UK – showed that absolute or relative majorities in every country agreed that the EU was “going in the wrong direction”.  

When we look back on the FOMC meeting on June 19 2013, it will probably be seen as the moment when the Fed signalled that it was beginning the long and gradual exit from its programme of unconventional monetary easing. The reason for this was clear in the committee’s statement, which said that the downside risks to economic activity had diminished since last autumn, presumably because the US economy had navigated the fiscal tightening better than expected and the risks surrounding the euro had abated.

This was the smoking gun in the statement. With downside risks declining, the need for an emergency programme of monetary easing was no longer so compelling. The Fed has been the unequivocal friend of the markets for much of the time since 2009, and certainly ever since last September. That comfortable assumption no longer applies.

 

♦ The BBC visits two Goodyear-owned tyre factories in Amiens, north France, to look at how the country is getting to grips with labour reform.
♦ The nuclear stand-off with Iran can be resolved now that Hassan Rohani has been elected, writes Ayatollah Seyed Salman Safavi.
♦ Thousands of mainland Chinese have permanent residency in The Gambia – as the fastest and cheapest way for a Chinese citizen to gain right of residency in Hong Kong is to first gain permanent residency in mainland Africa’s smallest country.
♦ For the first time in human history, overweight people outnumber the underfed, and obesity is widespread in wealthy and poor nations alike.
♦ The US scrambles to save Taliban talks after an Afghan backlash. Also, take a look at the Taliban’s new Doha office.
♦ With protests continuing in Brazil, it’s a good time to take a read through our São Paulo correspondent’s feature on BBQ activists.