Homepage / Currency / Op-Ed: Germans fearing China's world order? Worry about the EU instead
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Currency, United States Finance

Op-Ed: Germans fearing China's world order? Worry about the EU instead

Criticizing what he saw as Washington’s isolationist bent, German Finance Minister Wolfgang Schäuble voiced a concern in a speech earlier this month that the West could be threatened as China (and Russia) might fill the void. That, he feared, “would be the end of our liberal world order.”

He also said that the U.S. was no longer willing to act as a “guardian of global order,” apparently because Washington withdrew from the agreement on climate change, and it allegedly showed no interest for cooperative migration and security policies.

The U.S. Department of State has probably something to say about that, but I wish Schäuble were at least partly right. Arguably, the U.S. could cut back on some foreign engagements and pay more attention to pressing domestic problems.

That said, I wonder how the German minister fails to see that the U.S. is all over the map in active, proxy and hybrid warfare — Afghanistan, the Middle East and North Africa, Korean Peninsula, Central and Eastern Europe and the South China Sea.

What else would he want? A nuclear war with China and Russia?

Germany may wish to think about whether it is in its interest to fuel and broaden the points of friction with the United States. In my view, Berlin should leave the big power dealings alone.

Washington and Beijing are engaged on a broad range of issues to build a historically unique relationship between an established superpower and a runner-up that needs space to develop and contribute to the world in peace and harmony. In trying to do that, the two countries are blazing totally new trails of modern statecraft. Ubiquitous analogies of Sparta (an established power) and Athens (a rapidly developing strategic competitor), and their ensuing Peloponnesian War, are worthless in the case of countries with huge nuclear arsenals and ground, sea, air and airspace delivery vehicles.

So, yes, Germany should leave that alone and get over its fury at Washington’s decision to stop the hemorrhage of foreign trade accounts that are killing jobs, incomes and whatever is left of American manufacturing industries.

China got that message and is doing something about it. In the first four months of this year, American export sales to China soared 16.1 percent. By contrast, U.S. exports to the EU, which account for one-fifth of the total, barely eked out a 2.7 percent increase.

Apart from that, the U.S. did not create, or invent, the German and EU problems. Washington just issued a warning about (a) America’s systematic and unsustainable trade deficits with the EU ($165 billion in 2016), (b) free-loading on America’s military protection by ignoring financial obligations to the NATO alliance, (c) the EU serving as an instrument of German interests and (d) Brexit as an echo to British voices that they voted for U.K.’s accession to the EU in 1973, but did not expect to be governed by Germany.

Instead of taking counsel from Kantian rationality, Germans now seem overcome by anger in response to perfectly justified American warnings — and widely shared concerns about German economic policies throughout the EU, a house of peace and prosperity built by Schuman, Monnet, Adenauer ….

Indeed, a constant lashing out at America should not be a diversion from Germany’s inability to contribute to effective management of the EU’s existential problems.

Brexit, after all, did not happen overnight; it was a long time coming. And it just took an act of British democratic traditions to consult the people on issues of formally “shared sovereignty.” The response was clear: The British did not want to board up their revered Palace of Westminster, the cradle of modern parliamentary democracy.

In my view, Brexit was caused less by an original sin — i.e., admitting to the EU a country with free-trading traditions and a fierce attachment to national sovereignty — than by the EU’s French-German mismanagement and stubborn resistance to change.

Most British concerns were also shared by nearly half of the French electorate (Front National, La France insoumise and Debout la France) during the first round of presidential elections in April. Those problems are still there as witnessed by a spectacular — 57.36 percent — abstention in the second round of French parliamentary elections on June 18. The rate of abstention among people 35 or younger was 75 percent, with another 70 percent among the low-income people.

The new French president says that Europe will take care of all that. He is telling the skeptical French that the country’s problems can only be solved in a “Europe that protects (from unbridled free trade and a chaotic globalization)” and a “Europe that protects with safe borders.” (Guess who said that first, but lost the elections?)

Let’s see how that’s done … in a community of different national interests, traditions and values.

For example, the feisty Visegrad Group (Poland, Hungary, the Czech Republic and Slovakia) does not want Europe to intrude on its sovereign decisions about immigration and issues of culture and national identity, while the Scandinavians want untrammeled globalization and free trade.

That is what drove the U.K. out, but the French, with a German nod, are saying no to “Europe à la carte,” unless, of course, it’s a French-German menu du jour. Paris and Berlin are threatening sanctions and withholding of regional development funds to those disobeying their orders.

Again, let’s see how that is done in EU councils where decisions are taken with unanimous votes.

In the middle of all that, Italy and Greece are crying out for help in dealing every day with hundreds and thousands of migrants/refugees from the Middle East and North Africa.

So, before worrying about China’s feared domination of the world order, Germany should help solve the existential problems of a captive market where it collected last year a trade surplus of 162.8 billion euros — a whopping 65 percent of its total net exports.

Germany should also worry about an appearance of Paris and Berlin talking past each other. France, currently driven by a neophyte zeal, wants serious EU institutional innovations, even those involving treaty changes, while Germany keeps saying “yes, but…” And, in a sobering reminder, Germany also keeps repeating that France has to reform its labor markets and tax codes, and to have its budget deficit (3.4 percent of GDP) and public debt (96 percent of GDP) converging with Germany’s budget surplus (0.8 percent of GDP) and a much lower public debt (68.3 percent).

These are tough issues. They are political dynamite in France, where the government now says that it will be very difficult to keep the commitment of bringing the budget deficit down to 2.8 percent of GDP by the end of this year.

Berlin may wish to think about calmer and more constructive U.S.-German relations.

German unfair and disparaging remarks about China could be very costly mistakes. Siemens, Volkswagen, Daimler, BMW and large chunks of the Mittelstand may have something to say about that.

Germany has to make up its mind with regard to the European integration. Bullying the Visegrad Group (and Baltic States) — a task that Germany has subcontracted to France due to dark pages of its history — and pillorying Greece (a task Germany was eager to continue) won’t work.

These countries will run to the U.S. for cover, as some of them are doing now by demanding large contingents of U.S. armed forces on their soil. Also, the U.S. will not be indifferent to the mistreatment of the long suffering Greece. That is America’s key strategic base in the Mediterranean, and a location of new military installations on the island of Crete to monitor the Middle East.

Building on the excellent work of the European Central Bank (ECB), Germany and France can do a lot to advance the cause of peace and prosperity in Europe.

Let’s watch and give them a cautious benefit of the doubt.

Source: cnbc
Op-Ed: Germans fearing China's world order? Worry about the EU instead

Comments are closed.