ECB Rate Cut

The Economist takes a look at the European Central Bank's recent rate cut and the state of the European economy (hint: it's dismal).

The Celtic Tiger of yesteryear seems to have its tail between its legs these days; the article notes that Ireland and Spain are seeing the fastest retreats in consumer spending. Germany has seen dramatic falls in its exports, a large source of the nation's GDP.

Czech in Charge

Czech Prime Minister Mirek Topolanek, who took the rotating EU presidency on January 1, gave a policy speech today. Most noted were his remarks, described by France24 as "lukewarm", on the future of the Lisbon treaty.

the Czech parliament is scheduled to vote on the treaty Feb. 3 but "euroskeptic" Czech president Vaclav Claus says he will delay signing the treaty as long as possible.

The Future of Capitalism

French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel welcomed financial experts in Paris to discuss "the future of capitalism," seeking to create a new system of international financial governance and institutions.  

Merkel suggested a "powerful new economic council at the UN," reports France24.com.  Both urged the US not to stand in the way of tighter financial regulation, which they blame the current crisis on -- a good sign for those of us eager to get past the Reagan-Thatcher era.  

The goal, said European leaders involved in the two-day event dubbed "New World, New Capitalism," was not to end capitalism or finance as we know it, but to foster the "return of the state" as a regulator.  

Tony Blair, chairing the event, told attendees -- Amartya Sen, Pascal Lamy and Joseph Stiglitz, among other notables -- that the current system of seven powerful economies making global financial decisions is an "absurdity" in these times, calling for the inclusion of a wide array of emerging economies and interested parties.  

"We have mid-20th century international institutions governing a 21st century world," he said, calling for the reformation of the IMF and the World Bank.  

Who Passed Gas?

Gas shortages continue throughout Europe stemming from the Russia-Ukraine dispute, this in the middle of winter, while Russia and the Ukraine continue to bicker like two sorority sisters fighting over the only blow dryer in the house. Aside from disputes over prices and claimed thefts, Ukraine says Russia is trying to weaken the Ukrainian government as it seeks NATO membership and closer ties to the West, while Russia claims Ukraine is trying to curry anti-Russia fervor in the West. (Washington Post.)

Obviously, East and Central Europe have been crippled the most, with some industries shutting down completely, but shortages are felt all over.

Just to recap, The EU gets 25% of its gas from Russia, and 80% of that via Ukraine.

Mild winters and previous scuffles have prepared much of Europe with a two week surplus stockpile, which should help until matters are resolved. Times Online says that throughout Europe, blame has fallen on both parties.

Also telling is that some countries are turning to Iran for increased supply.