“Trumpelling around”

Can you remember the “Shutdown”. That was in autumn 2013 when the Republicans voted to block the budget for 2013 in order to (amongst other things) derail Obamacare. In addition there was the risk of the global power USA going bankrupt because the right wing of the party, the so-called Tea Party, linked increasing the debt ceiling with the demand for delaying Obamacare. The US would no longer be creditworthy. A state bankruptcy threatened. 800,000 federal servants could temporarily not be paid. Washington shut down…..
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Politics as risk

2012 in Tokyo: at the annual meeting of the World Bank and the International Monetary Fund, the European debt crisis  (and risk) was the focus. ECB members sat on the podium. They defended the eurozone and spoke of the rescue of Greece with a correspondingly rigid austerity programme. And especially: keeping the state and the banks separate from each other.
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Damaging Public Office

“The more frequently a politician contradicts himself the bigger he becomes.” Friedrich Dürrenmatt

The question I have been asking myself for weeks now is: has public office been damaged by the developments of recent years such that politics in the near future will only be dominated by populists?

It is like it always has been: a change of government leaves some government members without a job, from one day to the next. This is a surprise to some of them and they have no way to prepare. Werner Faymann himself is said to have taken a taxi home after his resignation press conference because use of the official car had already been withdrawn from him.

This happened maliciously “thanks” to strong social media involvement. The slow dismantling of Werner Faymann was just like it was one and a half years before when Michael Spindelegger held office and was slowly dismantled in public. There was no one who protected the office itself, to protect it in its dignity and importance before the attacks on the person.

No follow up?

There is no legitimate follow-up for politicians who voluntarily leave office.

Jobs in the private sector are dismissed as jobs for the boys, having NO job is interpreted as being a proven failure, and for engaging entrepreneurial activity you get a dressing down and are accused of using networks that would not have been available to you without your previous job.

This scenario awaits every leading politician who takes public office. It is practically part of the political CV. That is why it is not surprising that fewer and fewer people are willing to voluntarily forego privacy and personal freedom for long periods of time and to immerse themselves knowingly in a kind of image damage operation.

Respect for public office?
In Germany there is a different political culture. Former presidents and former Chancellors are provided with an infrastructure for the period after they leave office. This is offered without malice of the population and out of respect for the fact that these people have given a certain period of their lives to public service. They are used as political observers and analysts for big events without a hint of this merely being jobs for the boys. They are like ambassadors of their country who are handed responsibility for a period of time by the voters. The opinions and the views of these “elder statesman” are desired and sought after. Former American presidents have made this a business model with related community service in the form of foundations.


The populists profit

It is clear nevertheless that tangible policy making is essential and necessary. This is because it has never been so easy – especially through social media – to scrutinize policy and its actors, to take them apart and criticize without much background knowledge. This is a great moment for populists who through their activities paradoxically cause damage to the office to which they aspire. They do this perhaps in the knowledge that they might never be able to fill and shape the public office as their predecessors have done. Therefore the public office itself will systematically be damaged. And not just from its attacker but also by its defenders. The current US election campaign is an example of this. And the European Commission President Jean Claude Juncker is still struggling to build a respectful relationship with his office and the European Commission. The reasons for this are varied and often even self-inflicted when you think of TTIP, Russia sanctions, the EU-Turkey Agreement, aid to Greece etc.
The consequence of this is a massive anti-EU stance within the EU population taken by populists.

Austrian presidential election: the most recent Austrian example
The media proclaimed it to be a “partisan campaign.” This has led both sides presenting the Office of the President in the Constitution completely inappropriately and to put it in an improper light. The two candidates have been interviewed on issues that have nothing to do with the office itself. They were pressed into media confrontations that were not only unworthy but also harmed the office.

Political education 4.0
To once again learn how to maintain a respectful relationship with the office requires a massive increase in civic education. At the same it requires training in how to carry out the discourse with political office holders in the social networks. The willingness of politicians to communicate directly with the voters in these networks also requires respectful interaction. Just as politicians need to accept the will of voters and their opinions, so voters need to understand the role of political office and to deal accordingly and respectfully again with the person they are engaging with. This respectful interaction must be carried out in both directions and in all the direct and indirect relationships that exist between each other.

 

Hoppe - Strategia.Politica. Media

Structural reforms – wake up Austria!

The conference organized by the Directorate-General for Economic and Financial Affairs in Brussels was exciting.  It dealt with structural reforms and the deepening of the economic and monetary union. Reforms! Said Draghi. Reforms! Demanded Dombrovskis. Reforms!  Summed up Moscovici.
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Van der Bellen

Alexander Van der Bellen and Independence

“The secret of freedom is courage.”

Even Pericles would have looked favourably upon Alexander Van der Bellen. Van der Bellen is courageous. His inner conviction has led him to stand as a candidate once again for the highest office in the land and to devote his life to public service for the Republic of Austria. He will stand as an independent coming from the Green Party. Or as I would put it as an independent spirit.

The reactions to Van der Bellen’s independent candidacy show once more how little digitization has entered public consciousness. Open innovation, which is increasingly gaining traction in the economy, remains foreign to realm of politics. The idea that someone has stature, is independent, has an inner freedom of spirit and can reach out to others across the political divide giving them courage and is a viable candidate for them, is something that is seldom recognized because of political ignorance. It is attractive to stay comfortably in the “mediocrity trap” (Hengstenschläger) and to risk nothing by putting your head above the parapet. Those people who are stuck in the analogue world of thought and of political unimaginativeness discredit independent candidates, who stand for a new form of society, throw traditional approaches overboard and take new and intellectually novel challenges upon themselves. Social Media reinforces old ways of thinking and behaving.

Van der Bellen’s candidacy: open innovation

The Van der Bellen candidacy represents a turning point:

  • Yes, it is supported by the Greens. Why should the Greens not set such a sign of solidarity?
  • Yes, the word “independent” was not the best one in this case because it was temporally occupied by Irmgard Griss. But how could a person like Alexander van der Bellen otherwise be described?
  • Van der Bellen has always demonstrated in the course of his political career that he is not an apparatchik. His attitude has repeatedly stirred up “his” party. He often made speeches in the National Assembly that support a strong parliamentary system and centre-liberal approaches. Liberalism is freedom and independence. A fact that many choose to ignore and also fear.
  • Van der Bellen is the first political candidate in the sense of open innovation. He is not obliged to follow classic party programmes and leaves much content and many ideas as they are. This approach is immediately attacked as fickleness rather than being seen as Van der Bellen’s open innovation approach.
  • The most important thing for me is that Van der Bellen makes the classic zoon politikon, modelled on Plato and Aristotle, once again  acceptable to the Imperial Palace where the Austrian president resides. Not because President Fischer and his predecessors did also not ascribe to this but because this has completely been lost in the policy making of recent years. This is although it must be said that Van der Bellen does not identify himself as a dedicated follower of Plato in his book “The Art of Freedom”.

His independent spirit, his intellect, his experience in the National Parliament, his support for the European Union, his commitment to parliamentarianism and to the eco-social market economy in his role as farsighted economist have prompted me to join his support committee. This is also because I can once again outwardly be my independent self.

Alexander van der Bellen is the first politician who heads an open innovation campaign and also has a corresponding vision for it. Perhaps he calls open innovation by another name but it stands for change.

Freedom and independence of mind and thinking are essential in such a process. Alexander van der Bellen will accompany us “courageously into these new times.” I trust him and believe that he will make something great out of the change. 

Hoppe - Strategia.Politica. Media.

EU – a fleeting moment in time?

The EU is hogging the headlines – not because it is such an amazing construct with a strong and stable foothold in the global political framework, but paradoxically in connection with national and nationalistic ways of thinking. Diversified rather than united…
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Nina Hoppe - Strategia. Politica. Media.

Europe – to a greater or lesser extent? 

Recent events have uncovered a startling truth: the European Union always fails when it comes to preserving its Enlightenment legacy – that of civil liberties, defence of those freedoms and an open society. The question of how to protect our security, defence and freedoms is an important issue for which the European Union has no answers. Does this raise the threat of renationalisation and spell an end to the tremendous vision of Spinelli, Schuman & Co?

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Nina Hoppe Strategia.Politica. Media, aussenpolitische Beraterin "Public Affairs"

Europe, Europe. 

I didn’t really want to say anything about the current debate over the refugee/political asylum issue: the unqualified, self-satisfied comments on social media, the helplessness of national and EU governments and the blindness to global connections and goings-on. But I have decided to give free rein to my emotions – in my own way.
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Banking separation: separate for the purpose of unity

The current situation in Greece yet again makes it abundantly clear that a European-wide banking separation system is long overdue. It was not until the early summer of 2015 that the lame draft of the EU Economic Committee (ECON) within the European Parliament died a natural death. Yet banking separation is essential to the stability of monetary union and has a strong precedent in the Glass Steagall Act, which is well worth emulating.

A banking separation system was on the agenda of the last EU Commission as part of its central regulation measures. The system is very simple. The principle is that customer business should be separate from high-risk investment banking. The champion of UK banking separation, John Vickers, referred to this as “ring-fencing”. He spoke of protecting the sheep (commercial banking) from the wolves (investment banking) by ring-fencing them. Yet in that very market, representatives of the “too big to fail” banks have succeeded in distancing themselves from any effective banking separation system by a process of constant lobbying.
Michel Barnier, Internal EU Market Commissioner of the Barroso Commission, gave former head of the Finnish National Bank, Erkki Liikanen, the task of investigating possible structural reforms within the EU banking sector. The so-called Liikanen Report on the subject duly appeared in 2012. This was followed by EU member nations agreeing on a two-step approach (full details here), which was then brought to its knees by the Economic Committee of the European Parliament in the early summer of 2015.

Universal rather than separate banks
The reason for this failure was that the draft submitted by Swedish rapporteur Gunnar Hökmark (EPP) highlighted and indeed underlined the importance of universal banks and the need to prevent any strict separation of financial institutions into investment and commercial banks. This runs contrary, for instance, to the German Banking Separation Act, which requires that from 1 July 2015, investment banking and commercial business be divided into separate subsidiaries. If the EU law were to take a laxer stance, German banks would be at a competitive disadvantage within the EU (which would probably be no bad thing from a UK point of view).

Jeremy Corbeyn, a left-wing representative of the Labour Party, has recently re-ignited the Glass Steagall debate. He advocates implementing that particular banking separation model. Corbeyn is predicted to have a good chance of winning election as Leader of the Labour Party. Glass Steagall is a ready-made banking separation model that could be incorporated within the European legislative framework relatively easily.

Glass Steagall in the US election campaign
The Dodd Frank Act, only recently cited by President Barack Obama as a successful example of financial market regulation, has come under heavy fire during the current US primaries, within Obama’s party in particular. Apart from Hillary Clinton, who is thought to have a close relationship with the major Wall Street banks, in terms of financing her election campaign, all other Democratic Presidential candidates like Bernie Sanders and Martin O’Malley advocate re-implementation of Glass Steagall. (It was rescinded under Bill Clinton with disastrous and well-documented consequences for the global financial industry).

The “Glass Steagall Act” was brought before the House of Representatives in 1933 as H.R. 5661 by Henry B. Steagall, approved by the U.S. House Committee on Banking and Currency and enshrined in law on 16 June 1933 by President Franklin D. Roosevelt. The “Glass Steagall Act” provided for the introduction of a banking separation system, or institutional separation of a bank’s deposit and lending operations from its securities business. Banks had to decide whether to operate as business banks, offering classic deposit and lending products and services, such as account management and payment transactions, (commercial banking), or as investment banks dealing in securities (investment banking).  

Following the world economic crisis or Great Depression in the period between 1929 and 1933, banks had to contend with massive losses, thanks to strong integration and networking between investment and commercial banking, both on the securities side (stock exchange falls) and on the lending side (defaults on loans). The idea of separating the two segments was to ensure that such events did not repeat themselves.

Fintechs an example of banking separation in action
Proponents of the banking separation system, and the Glass Steagall model within the European Parliament in particular, led primarily by Philippe Lamberts of the European Greens, Fabio de Mesi of The Left and Jakob von Weizsäcker of the SPD, believe in the merits of a joint trans-Atlantic initiative to implement the Glass Steagall model of banking separation system in both the US and Europe. The latest developments in Greece, (bank suspensions, capital market controls due to the fact that purchase of state assets = domino effect), as well as the increasing threat of a financial collapse from China should give added impetus to this idea of sustainable separation of commercial banking from investment banking.

Not only that, since the current Turkish G20 presidency is focusing on the issue of “Financing SMEs”, a worldwide initiative to implement Glass Steagall or similar models would also be advisable. SMEs are a key economic, employment and economic stability factor, not only in Europe – in many emerging economies (including incidentally Russia and Brazil, as well as members of the BRICS) EMUs form the backbone of the economy. And, as their financial partners, customer banks are essential – whether analogue or digital. Furthermore, thanks to the Fintechs, systems are emerging in the digital world that follow the banking separation model. Fintechs are not universal banks but customer-focused digital banks. They generally offer a service geared to a particular target market, and so far they tend to be targeting classic “bank” customers.

However it will be a great political challenge to integrate this project into the major EU Commission project of Capital Market Union – particularly given the fact that a “Brexit” must be avoided or is undesirable in any event. This takes us right back to the start of my deliberations. We are in for some exciting political times. Stay tuned.

Nina Hoppe´s plea for the bank secrecy, transparent people and the role of digitalisation

Transparent people

The Austrian Federal Government is in the process of giving Austrians a new identity: that of being transparent people – a classic sign of a totalitarian state.

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