Falling like dominoes in Europe

The market upheavals in Europe, where political inaction has led Italy and Greece to the brink, have barely raised a ripple on the local election campaign.

The candidates are still outbidding each other with ways to spend taxes – and you can add to that with the extra borrowing involved.

Do voters not care about this? Or has the political environment been made so cancerous by the need for entitlements that it no longer matters?

I would have liked, as an academic exercise, to see how the Greeks would have responded in a referendum on the EU and IMF’s €130 billion bailout.

With Silvio Berlusconi’s exit, and the probable defeat of the Spanish socialist government in a week or so’s time, the unfolding debt crisis has brought leadership change in all the PIIGS states.

A key issue, as in New Zealand, is how the Left plays on the emotional pull of state ownership, as well as maintaining generous welfare payments and pensions that cannot be covered by tax revenue.

Greek economist Athanasios Papandropoulos has told the story many times to the international business press. His description sounds just like how a Labour government would react to any crisis here:

"The present government has done absolutely nothing during the past 12 months to speed up privatisations, reduce the public sector or open up closed professions. In these 12 months it has not fired even one civil servant. The only thing it is doing is trying to tax the private sector out of existence. Why should we believe that they will do something different now?"

Another commentator, writing in Ekathimerini, made the point even more forcefully:

"Whereas more than 1000 Greeks were losing their jobs in the private sector every day in August, the government was assuring civil servants with lifetime tenure that their job privileges were not in danger."

There is plenty more of this in Ekathimerini’s comment pages.

Arrevederci, Il Cavaliere
The downfall of Mr Berlusconi will disappoint journalists around the world. Over nearly two decades he has provided the serious and tabloid media, even this modest weekly effort, with a constant flow of material,

After he won his second election in 2001, he backed America when it most needed allies. By 2008, after ousting a socialist-led government in another election, he looked to be a potential statesman. Even his sharpest critics in the western media, including The Economist, credited him with stabilising a notoriously fractious political system. Spiegel Online puts it this way:

Between the end of World War II and 1994, when Berlusconi was first elected as prime minister, Italy had almost five dozen governments, few of which survived much longer than a year and many much shorter than that. Political chaos was long an Italian trademark before Il Cavaliere was able to impose some order.

Now, some are regretting his imminent departure – mainly because of fears of what will come next. There's plenty of time for much more mayhem from the collapse of his coalition this week to the elections next February.

Meanwhile, many will remain puzzled why he failed to grasp the enormity of Italy’s plight and do something about it when he – much more than all his rivals – was in a position to do so.

This would have enabled some forgiveness for his corrupt ways and sexual shenanigans.

Russia joins free-trade community
New Zealand is about to steal another march on the world trade scene.

It is out front in negotiating a free trade with Russia just as that country has finally removed the final obstacle of it joining the World Trade Organisation.

Membership was conditional on it signing a pact with Georgia, with which it had waged a short war in 2008 and as a result had imposed trade bans on Georgian wine and mineral water.

Russia has been talking to the WTO since 1993 and it is the only G20 nation that is not a member.

But each time Russia has got close, it has pulled away. The latest move, reported in Moscow, has been welcomed by westerners there.

“It’s going to normalise Russia as an investment destination market,” the Amcham head in Russia has told the Wall Street Journal. “Over time, Russian companies will be forced to be more efficient and competitive.”

Of course, joining the WTO won’t mean the rules in Russia will be changed overnight, as any New Zealander doing business there will attest.

But with our trade negotiators’ experience in dealing with China, whose market credentials are still not recognised by the EU, among others, Russia should be brought up to speed on WTO behaviour.

Even today, Russia imposes sudden trade bans and charges fees for aircraft over its air space ¬– practices that aren’t allowed under WTO rules.

WTO ministers will consider the membership application next month and that should mean tariffs and other trade barriers start falling early next year.

Fishy business at Greenpeace
In an unusual move, the heads of the world’s three largest tuna canning companies have challenged their long-time opponent, Greenpeace, to put up or shut up.

Chris Lischewski, president and CEO of Bumble Bee Foods, Chue Wing Chan, president and CEO of Chicken of the Sea, and In-Soo Cho, president and CEO of StarKist, say they have discovered the Greenpeace formula and its motivation:

Target something that's easily recognisable (like tuna), make some scary claims in the media, parade around in funny costumes—and start raking in the donations. It's a recipe that Greenpeace has perfected over the past two decades.

They go on to say that rather than helping to conserve the world's tuna stocks, Greenpeace is, in fact, the doing just the opposite.

It has become a sideshow that is trying to sabotage a serious sustainability partnership between dedicated conservationists and the fishing community.

The trio then explain moves that have been taken to create a sustainable fishery and the international organisations entrusted to ensure it happens.

Local company Cottonsoft has also gone on the offensive against Greenpeace over false allegations that imported tissue paper in its products is made from native rainforests in Indonesia and this endagers rare wildlife such as orang-utans.

Cottonsoft's supplier APP has now received information from a third party the discredits Greenpeace’s allegation.

It quotes a US company called Integrated Paper Services that was commissioned by Greenpeace to test APP-supplied materials, It says:

“IPS is only able to determine the types of fibres present in such samples. We have not, and are unable to identify country of origin of the samples. This type of assertion would need to be based on data outside of our findings. Therefore we are unable to comment on the credibility of the statements Greenpeace has made regarding country of origin.”

Cottonsoft says this backs its evidence, through its certification by PEFC, the world’s largest independent forest certification programme, that its products are sourced ethically by APP and contain no high conservation value wood.