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D u b l i n U n i v e r s i t y ’ s F i n a n c i a l N e w s pa p e r









The Olympic Games are about to open in Russia amongst controversy over human rights and calls for athletes to boycott the games. Despite being embroiled in a war with Islamic extremists, the Kremlin are keen to show off the new Russia. You could be mistaken in thinking this was referring to the Winter Olympics about to open in Sochi, but this is 1980 and the Summer Olympics in Moscow. Although since 1980 we have seen the collapse of communism and the breakup of the Soviet Union, there are striking similarities as the most expensive games in the Olympics’ history are about to open in Sochi. The southern city of Volgograd has been rocked by two suicide bombings carried out by Islamic extremists killing over 40 people. This battle with Islamic extremism has led to concerns just like in 1980 when the USSR was embroiled in a war with the Mujahedeen in Afghanistan. Security will be at a premium but the attacks on Volgograd shows that the terrorist don’t need to strike the games themselves to get their message across. There is also massive controversy over a controversial law that bans so called ‘homosexual propaganda’ which has led to concerns that the law is a homophobic attack on gay rights. Although athletes will be exempt from the law there have been calls for a boycott, including an open letter sent to Russian President Vladimir Putin from 27 Nobel Laureates. In 1980 there was no doubt that the Soviet Union was an authoritarian dictatorship but even with the fall of communism it is hard, if not impossible, to call the new Russia a democracy. At the last election the

2014 lawyer Magnitsky have shown that the government still meddles in the economy just like it did under communism. This is of potential concern to Russia since it has seen a number of successful businessmen flee out the country, such as Boris Berezovsky and Alexander Temerko

A NEW RUSSIA WITH OLD TRICKS Organisation for Security and Cooperation in Europe found widespread procedural violations, a lack of media impartiality, harassment of monitors and a lack of separation between party and state. The election saw the return to the Presidency of Vladimir Putin following a period as Prime Minister since the Russian constitution stopped him holding the Presidency for three consecutive terms. President Putin has tried to ease criticism by releasing political prisoners including billionaire business man Mikhail Khodorkovsky, protest band Pussy Riot and international Greenpeace activists arrested for piracy. However Mr Khodorkovsky, a former ally turned long-time rival, has not eased his criticism of the President, calling for the release of

the rest of those held for political reasons. Arrested for fraud in 2003, his imprisonment was widely seen as an example of the old Soviet practice of arresting defeated political rivals on trumped up charges. Old rivalries with America have also not died. Both countries supporting opposite sides in the Syrian Civil War just as they often did during the Cold War. America has also attacked Russian political repression with the Magnitsky Act. This is named for Sergei Magnitsky who died in prison under suspicious circumstances while investigating fraud amongst government tax officials. His death led to worldwide condemnation and the Magnitsky act bans officials alleged to be responsible for his death from entering the US, while also seizing their assets

held in the country. Russian Parliamentarians responded by banning US officials for alleged use of torture during the ‘War on Terror’. State control of the media have kept many of these stories from the Russian people just as under the Soviet Union. This may account for the widespread support Putin’s regime has amongst ordinary Russians. Reporters Without Borders ranked Russia 143rd for press freedom out of 168 countries. Assaults on opposition journalists have also become common place. The opening up of the economy to capitalism in the 1990s was supposed to lead to a free economy. However, we can see from the cases mentioned above that business men such as Khodorkovsky and

The Sochi Games have seen no expense spared as part of an attempt to show of the power of Russia and maintain its position as a major world power, perhaps even regaining the title of superpower. As part of this the country will also host the 2018 Football World Cup. These can perhaps be seen as similar to demonstrations of power under the Soviet Union such as the annual May Day Parade and indeed even the 1980 Moscow Olympics. Therefore, although much has happened since 1980, not much has changed in Russia. There may be a semblance of a democracy but it does not operate as openly as we in the West understand democracy. However, while the Moscow Games were marred by an American led boycott, it is unlikely that the Sochi Games will be remembered for anything other than the sport. This could signal the success of the government’s policy in showing off the ‘new’ Russia; however I would argue that the new Russia looks strikingly like the old one. .

by Callum Trimble-Jenkins .

“This could signal the success of the government’s policy in showing off the ‘new’ Russia, however much it resembles the old. “ 23rd JANUARY 2014 Issue 3 Vol 3


News & current affairs

The Bull 23.01.2014

vital indicators


Consumer Price Index


Unemployment rate


GDP percentage change (projected)


National debt as a percentage of gdp

€2.53bn Trade Surplus


B Ger Healy discusses the third Trinity Economic Forum being held this February


he third annual Trinity Economic Forum (TEF), which I am sure many of our economics students, and indeed those of us with an interest in economics, will attend, takes place on the 14th & 15th of February here in Trinity, uniting hundreds of students from colleges and universities across Ireland to engage themselves in the policy making process. Key themes for this year’s forum include such topics as: Re-thinking Long Term Solutions for Sustainable Banking in Ireland, How Economic History can inform future

growth-based policies and The Behavioural Revolution in Economics Following the Crisis. For those of you who would stay away due to economics being dry and boring, the diversification of topics into such areas as behavioural development and historical discourse means you have no reason not to go. It is perfectly understandable for Irish students to feel left out in the cold when ‘important’ people on the television start talking about the many ways in which we could, or indeed should, act to define the future

No longer Junk say Moody’s Ireland received a much needed boost last Friday as ratings agency Moody’s upgraded Ireland to investment grade. This is a welcome development for the Irish economy as our ‘junk’ status has been removed, rising from BA1 to BAA3 on Moody’s scale. Moody’s referenced Ireland’s access to the markets once more and the growth potential of the economy as being factors contributing to a positive outlook. The upgrade comes in recognition of the economy showing signs of improvement after two years of poor growth, with the unemployment rate falling to 12.8 percent

from a 2012 peak of 15.1 percent, increasing house prices and GDP growth of 2 percent expected this year. Much still needs to be done, but these figures show that we are taking steps in the right direction. In a statement made by Kristin Lindow, Moody’s analyst for Ireland, the positive measures taken towards correcting our unfavourable situation and the carrying out of structural reforms were highlighted as being central to the upgrade of our rating: “They undertook the fiscal consolidation and structural reforms in the (bailout) program with great seriousness. It really was their determina-

policy of our country. For those of us who claim to have a great idea, practical insight or even a potential solution to a problem, why wouldn’t we put our hands up and give our opinion when we have the opportunity to be heard? The real world is never going to take heed of a ranting student producing his / her monotone argument of “Labour sold us out” or “Sack the bankers”, so let’s take advantage of such an event as this to listen and to put forward some constructive arguments for the benefit of all of us.

angladesh’s ruling party has won one of the most violent elections in country’s history. The election was marred by street fighting, low turnout and a boycott by the opposition. The results a foregone conclusion, with the ruling Awami League winning 232 of the 300 elected seats, according to the election commission. 153 of those seats went uncontested, while some polling centres reported seeing no voters at all. The political feud in the nation of 160 million people can be traced back decades, as power has alternated between the prime

minister, Sheikh Hasina, and Khaleda Zia, the opposition leader, for over 22 years. Yet, the turning point came in 2011 when the Bangladeshi parliament overturned the requirement that general elections be overseen by non-partisan caretaker governments. While for many Bangladeshis the election does not give the government a democratic mandate to rule, the opposition has also been criticised for its role in inciting violence. It is estimated that around 500 people were killed last year alone.

The concept for the Forum, founded in 2011 by a group of students who were frustrated by the negative and often non-productive nature of Irish economic discourse, seeks to change our approach to the wider economic discussion and ensure a more informed Irish policy debate in the future. It is encouraging to note that such an event has successfully continued in its operation over the past few years, particularly when one considers that these gimmicky types of student run events often start out in a blaze of fury before whimpering into nothingness;

the embarrassment of last year’s student protest march being a sad representation of how a good idea can easily become stale and pointless over a number of years. The forum, though of course centred around lectures and talks, will also encompass those ever popular networking opportunities and the chance to really have your voice heard and your opinions acted on, with the department of finance policy development competition being run; ranting students, start your engines!

by Duncan Moss

tion to succeed that helped them to both regain and retain investor confidence.” While Ireland has a debt and budget deficit which is comparatively one of the highest in Europe fiscal targets have been continually met, providing confidence to wouldbe investors. It is hoped that Ireland’s upgraded status, as well as the positive measures taken by the government, will continue to provide the all-important confidence to investors. by Michael Alexander

CONTRIBUTORS Editor Edward Teggin Deputy Editor Sean Tong Layout & DESIGN EDITOR Mena Eskander Sch. MANAGEMENT Reuben Whelan

SUB-EDITORS Niall Casey Lara Connaughton Peter Martin Duncan Moss Timothy Munier Eoin O’Drisceoil Callum Trimble-Jenkins Patrick Vaughan

This publication is partly funded by a grant from DU Publications Committee. This publication claims no special rights or privileges. For advertising, please contact Serious complaints should be addressed to: The Editor, The Bull, Box 31, Regent House, Trinity College, Dublin 2.



The Bull 23.01.2014


Chris Davies reviews the most recent election in Egypt, democratically legitimasing the military’s recoup of control from the deeply unpopular Muslim Brotherhood Voting has taken place in Egypt over a new constitution. The document has been drawn up after the army removed the Muslim Brotherhood’s Mohammed Morsi from the Presidency. A yes vote would be seen as an endorsement of last July’s military coup. Voting has lasted over two days and so far nine people have died in clashes with security forces. The replacement of the constitution passed under Mr Morsi’s tenure has proved as divisive as his removal of power. President Morsi was removed from power by the army following weeks of protests at the alleged authoritarianism of his administration. However this sparked violent clashes between the supporters of the Muslim Brotherhood and security forces which still continue. It is estimated over 1,000 people have died in such clashes. He has since been arrested for the deaths that occurred during the protests which were his undoing. However, along with his co-defendants, he has refused to recognise the court’s right to try them. Mr Morsi was absent when his trial began earlier this month, with the state citing health reasons but leading to speculation that it was down to his refusal to accept the new government’s legitimacy. It is expected that the yes side will win, especially since the Brotherhood are boycotting the referendum as part of their continuing protests over the new government’s legitimacy. This could prove important as it might deny the govern-

First female head of US Federal Reserve Janet Yellen has been confirmed by the US Senate as the next head of the US Federal Reserve (Fed). Although the vote was marred with bad weather stopping many Senators attending, Ms Yellen won a comfortable 56-26 victory. She will become the first woman to head the US’ Central Bank. President Obama welcomed the passage of his candidate through

ment the ‘democratic ceremony’ they seek. The Brotherhood is an Islamic party and this played a role in their fall out with the secular and American backed military. Since the Coup they have been banned and considered as a terrorist organisation. It is believed that a yes vote will see a new presidential poll sometime in this year. It is also expected that current head of the army, Abdel Fattah al-Sisi, a key member of the coup will stand for the office. Increasingly Egypt looks like it is returning to the days of Hosni Mubarak, a former military commander who ruled Egypt from 1981 until he was overthrown as part of the Arab Spring. The former President was sentenced to life imprisonment for alleged abuses of his government but saw this overturned on appeal before being released as part of the army take over. The new constitution will seek to reduce the power of the President, restricting them to two terms of four years each. It also will make the President impeachable to the Egyptian Parliament. The army have also tried to secure their place of power by allowing themselves to pick the Minister of Defence for the next eight years. While Islam remains the state religion there is a ban on any political party based on religious belief, this is seen as targeting the Muslim Brotherhood and other Islamic groups that present a challenge to the power of the Army.

the Senate, which represented the last potential stumbling block before Ms Yellen takes office. President Obama has become the first Democrat to nominate a new Fed Chair since Jimmy Carter appointed Paul Volcker in 1979. He will be hoping for similar results as Mr Volcker was widely credited with ending the stagflation crisis of the 1970s. It is expected that Ms Yellen will continue current Chair Ben Bernanke policy of keeping interest rates low in an effort to boost the US economy. Indeed, as Vice-Chair she played an important role in implementing the Fed’s stimulus package. The biggest concern of Senators at the confirmation hearing was the estimated $4 Trillion in assets that

UPDATE OR DIE Facebook continued its expansion on Monday by acquiring Branch Media for its social conversation platform, Branch, and its little brother, the iPhone App Potluck. It has been reported that the transaction between Facebook and the social start-up amounted to $15 million. Furthermore, last month Facebook Inc. bought sports data aggregator SportStream as well as snapping up Little Eye Labs, a start-up based in India which focuses on performance analysis and also monitors tools for Android developers. Since the dawn of time, the biological imperative for the natural world has been ‘adapt or die’. This cautionary phrase has evolved into the maxim ‘update or die’ for social media networks. Websites such as MySpace and Friendster who did not abide by this became either comthe Fed has acquired since it began its stimulus package in the wake of the Financial Crisis. However this is only part of the challenging situation Ms Yellen now faces. She will have to weigh up the competing economic objectives of lowering unemployment while stopping any potential inflation. It is likely that this will mean that the Fed will begin to pull back its stimulus programme to curtail potential inflation. It will prove a careful balancing act for Ms Yellen, pulling back too early may see the US economy failing to fully complete its recovery. Ms Yellen will take up her post on the 1st of February having served as the Fed’s Vice-Chair since 2010. Prior to this she was President of the Federal Reserve Bank of San Francisco

placent or inert and perished as a result. One important facet which they overlooked was how critical the mobile industry has become; Facebook launched their iPhone app in August 2007. MySpace answered in July 2008 and during that interim roughly 12 million iPhones were purchased. Presence in the pockets of the public has been a game-changer in this industry. Through this vein of thought, Facebook realized that the future was not solely wrapped up in their website, but in establishing the Facebook brand as the plumbing of the Web. Facebook not only embraces change but also potential competitors; in April 2012 it bought Instagram for $1 billion. While the features of the aforementioned Branch media are reminiscent of the new functions attributed to Apple’s iOS7 software updates, Facebook seems

confident that its conversation application will be improved by this venture. These improvements seem to be in line with the affect that Instagram had on raising the standard not only of photos shared via Facebook but on the overall quality of its mobile app. The company founded by Mark Zuckerburg replaced The Williams Companies Inc. (an energy company which deals with the storage and transportation of fossil fuels) in the S&P 100, as well as Teradyne Inc. (a semiconductor equipment firm) in the S&P 500 in December. Facebook left its third quarter on the 30th of September with an excess of $9.3 billion in cash and has evidently been busy exercising this money as of late. by Lara Connaughton

where she notably warned against the house price bubble which caused the Financial Crisis. She also served as Chair of President Clinton’s Council of Economic Advisors. Ms Yellen was educated at Brown, followed by Yale and is married to Nobel Prize winning economist George Akerlof. Ms Yellen is considered to be a dove who is more concerned with unemployment than inflation. This is likely to have proved to have been the decisive factor in her nomination by a President who will want to leave the US economy in a stronger position than he found it in 2008. by Steven Cook

JANET YELLEN The new head of the US Federal Reserve



The Bull 23.01.2014

A reformed republic? The Reform Alliance


n January 25th the Reform Alliance will hold its first conference at the RDS. The purpose of the conference, as outlined on its website, is to “open a national conversation on three key areas of reform”; these being: political reform, economic reform and reform of the health service. The Alliance states that these reforms are necessary in order to “rebuild trust, foster enterprise and encourage and inspire participation in the democratic institutions of the State”. Further details on the Reform Conference go on to say that the aim of this ‘monster meeting’ is to “give …citizens an opportunity to contribute to and engage with the debate on Ireland’s destiny…We welcome everyone. And everyone will be heard.” Lucinda Creighton, Peter Mathews, Billy Timmins and Terence Flanagan, all of whom are TD’s, as well as senators Paul Bradford and Fidelma Healy Eames were forced to leave Fine Gael last summer due to their opposition to parts of the Protection of Life During Pregnancy Act. The remaining member of the Reform Alliance, Denis Naughten, left the party in 2011 over his opposition to the closure of the A&E department at Roscommon Hospital. Whether you agree with the reasons why certain members of the Alliance left Fine Gael or not, the fact that they left their party over matters of moral principle and didn’t just go along with what was being implemented by Fine Gael at the time, I

think is a welcome departure from the ‘herd mentality’ which was and still is so prevalent in Irish politics. Admittedly, I did not know a great deal about the Alliance until I saw Lucinda Creighton, the former junior minister who many consider to be the unofficial leader of the group, being interviewed on Primetime. I have to say I was hugely impressed with what she had to say and subsequently went on to the group’s website to get a greater sense about what they stood for and what they hoped to achieve. During the interview Ms Creighton explained why she left the Fine Gael Parliamentary Party, saying: “For me, it’s about standing by… commitments that you make and promises that you make in political life and my party made a commitment, my party leader made a commitment and I made a commitment and it wasn’t honoured.” Wherever you stand in relation to the arguments surrounding abortion legislation, the fact that Ms Creighton spoke with such honesty and integrity on why she left the parliamentary party as well as her own party’s failure to honour promises they made to the public before the general election is pleasing to hear and a much needed, refreshing approach to doing politics in this country. The Reform Conference is widely seen as an opportunity for the group to ‘test the waters’ and to gauge the demand for a new political party in Ireland. Established in ber 2013, this is generally felt to be the first major

step the Alliance has made on the road to forming a new party. However, it has been insisted that the upcoming conference has not been organised for the reasons above with Ms Creighton claiming “it’s not a party political event.” Not much information has been disclosed in reference to who will speak at the event; one such person who will be speaking at the conference though is well known economist David McWilliams. It has been said that the attendance of established political figures would give more credibility to the event given that the formation of the group was originally based upon the conservative pro-life view of abortion shared by most of its members. This is understandably a major issue for some

people; indeed, this very point was raised by Trinity’s own educational officer on the Primetime programme. In a rather unwarranted attack, Independent TD Finian McGrath described the Reform Alliance as “…a group of disillusioned Fine Gael TD’s” even advising Shane Ross, a rumoured speaker at the conference, to “…steer clear of them…” During the aforementioned Primetime interview, Lucinda Creighton responded to Mr McGraths remarks, saying: “I think it’s bizarre that any democrat… would warn about a movement to try and engage people in political discourse…” Whatever the future intentions of the Reform Alliance, I can’t help but feel that this conference will mark

the beginning of a change in Irish politics; how big this change will be is still hard to tell. Referring again to Ms Creighton’s interview on Primetime she finished by saying this: “I think what we need is integrity in public life. I think what we need is honesty. I think we need people who go before the electorate and say they will do certain things and actually get into government and do them and are held to account.” Although it’s too early to say for sure, if this is what the Reform Alliance are striving for I don’t see why the upcoming Reform Conference and the future of the movement itself should not be a great success.

the capacity of schools to implement significant educational reform following more than five years of education cutbacks, the threat to education standards in schools and between schools, and the potential for the proposals to exacerbate inequality between schools and between students.” One might feel more comfortable ascribing to the above arguments if teachers’ unions weren’t quite so volatile when it comes to any proposed change or potential increase in their workload.

states that he is hopeful that a broad alliance of teachers, parents andofficials will work together to “roll-out the new JCSA in a careful and considered way”. Sounds to me like Minister Quinn is willing to talk and listen to the concerns put forward by teachers. All cynicism aside however, the reform of the junior cycle is a worthwhile cause and one which will hopefully lead to an end of doss-classes in which students listen sparsely and accomplish even less; let’s just hope ‘negotiations’ don’t lead to more teacher strikes, in which the only real losers are the students.

by Mark Hughes

A new Junior Cycle


or those of us who are capable of casting our memory back to the year of our Junior Cert, 2008 for me, one will probably remember a feeling of one of two things: a frantic fear of not getting ten A-grades or the general acceptance that the whole thing is a waste of time and school doesn’t really begin until fifth year when you’re staring down the barrels of the senior cycle. Perhaps such an apathetic feeling is what has spurred Education Minister Ruairí Quinn and his department to develop and propose the latest changes to the junior cycle of education in Ireland. These changes of course come under the heading of the Junior Cycle Student Award; celebrating junior cert results night will never be the same again. The motivation behind such a re-

invigoration of the junior education cycle is fairly straightforward in that the current syllabus is rather outdated and largely impractical for preparing students for the rigors of the senior cycle. You’d think that even a suggestion of reforming a slightly dated system would be greeted with at least some positivity, particularly from those who are charged with teaching the unfortunates who are still in school. This is however, by and large not the case. The main teachers’ unions in Ireland, the ASTI and TUI, have already discussed balloting to consider a course of non-cooperation with the department and the proposals, describing the minister’s actions as a ‘grave disappointment’. Quite what they can be disappointed in would seem to me a mystery, but there is perhaps some-

thing in the argument that such a shake-up in the system will take time to implement and should be conducted in a slow and methodical manner so as to get it right. This of course is fair enough; if we are going to reform something we might as well do it properly. ASTI General Secretary Pat King has indicated that second-level teachers would be in favour of reforming the junior cycle, though added the caveat that there remained issues with several ‘key aspects’. “These concerns include

It is claimed that there has been a general lack of communication between the department of education and teachers’ representative over the shake-up in the junior cycle; if that is the case it is indeed rather poor form from the minister and his department. On the flip side, Mr. Quinn has

By Graham Davies



The Bull 23.01.2014


he late Dr John Garang, the iconic former leader of the Sudan People’s Liberation Movement (or Army) and father of the independence movement, once called for a New Sudan, but his dream, of making Sudan the peaceful and successful unity of all its wonderfully diverse peoples, was always met with challenge. In January 2005 he reiterated this at the signing ceremony of the Comprehensive Peace Agreement in Nairobi, in a deal which ended the devastating civil war which had plagued Sudan for decades, between the Sudanese government and the SPLM rebels of which Garang was chief. In his speech, he said to 20,000 Sudanese onlookers and the 15 African heads of state who had gathered for the occasion: “This peace agreement signals the beginning of one Sudan regardless of race, religion or tribe.” Yet Garang’s vision of a ‘New Sudan’ was never popular with his people. Secession appeared to many to be a far more achievable goal, whereas overthrowing the shackles of Sudanese President Omar al-Bashir was a far greater challenge. After centuries of oppression from northern rules, southerners were entitled to feel aggrieved enough to call and advocate complete independence. Even within his own party, Garang had to push hard for unity. It was out of his death that an internal conflict within the Sudan People’s Liberation Movement (SPLM) has now threatened to drag the fledgling country back into a civil war, but one that is now sharply di-

vided along ethnic lines. An atmosphere of rumour and paranoia had been festering since July when Mr Salva Kiir, the South Sudanese President, sacked his entire government in a bid to limit the power of the ambitious former president, Mr Riek Machar. The violence erupted on December 15th when Mr Kiir had 11 men detained amid fears of a coup d’état whom he accused Mr Machar of organising. The tension has culminated with the rebels, under the leadership of Mr Machar, now at the time of going to print, having taken control of parts of Jonglei and the oil-rich Unity state, as well as parts of the Upper Nile, South Sudan’s other main oil producing state. Mr Kiir’s forces still hold most of the country’s other seven states, and his forces seem to be better prepared for a drawn out conflict should the need arise, as they have more supplies, arms and international support. But, should Mr Machar strike up a series of early victories, for instance by seizing and holding the strategic city of Bo, the capital of Jonglei state, he may be able to hold the country’s oil industry to ransom. So far about 200,000 people have fled from their homes in an attempt to escape the violence. Tens of thousands are gathered in the Lake States in the north, and the 5 United Nations (UN) bases in the country are numbered at 80,000 civilians. At the Dzaipi transit centre in Uganda, more than 20,000 South Sudanese are now crammed into a camp meant for only 400. The UN has responded by call-

ing for an additional 5,000 troops to bolster the 7,500 troops previously deployed. But the obstacles facing those like the UN, and NGOs such as The International Committee of the Red Cross (ICRC) and Médecins Sans Frontières (MSF) are vast. “South Sudan is facing a serious crisis that comes on top of a situation that was already difficult,” ICRC president Peter Maurer said, after his three day visit to the country. According to MSF, even before December’s armed clashes over 80% of the country’s healthcare was carried out by NGOs. Hopes that regional leaders might broker a ceasefire so far appear to be forlorn, as calls for such a ceasefire from the international community so far sound more like an ultimatum for Mr Machar. Ugandan troops control the airport in Juba, and Ugandan aircraft have allegedly bombed Mr Machar’s rebels in Jonglei. Mr Museveni, the Ugandan president, is set to send more troops to Mr Kiir’s aid. It has been suggested that he may have spotted an opportunity to have oil transported south through Uganda rather than north though Sudan whose president, Omar al-Bashir, he has long since despised. Yet so far, Mr Bashir has warily kept his distance from the conflict. Sudan’s economy depends on the royalties it earns for taking the south’s oil to market via a pipeline to the Red Sea, but if the conflict worsens he could be tempted to intervene to protect his own country’s profit margins, and to protect Sudan’s oil which lies perilously close to the South Sudanese border. The lack of any progress in the

peace talks in Addis Ababa, Ethiopia, has worried the international community, who warn of descent into another all-out civil war. Negotiations are deadlocked over the release of the 11 detainees Mr Kiir has accused of plotting the coup, with neither side appearing willing to compromise or find agreement. China, the biggest importer of oil from both Sudans, along with the United States and key European countries with an interest in the area such as Norway and Britain, have all called heavily for peace talks between the two factions. They desire to broker a ceasefire but it is difficult to imagine that any ceasefire would be of lasting merit. The status quo that was appears unlikely to be restored soon, if ever, as even with Ugandan military aid for the pro-Government forces, both sides have decades of experience fighting bush guerrilla warfare. The worst fear now for the civilians of the region, and for the world at large, is that the conflict continues to take on an ethnically based character. The Dinkas - one of the two largest ethnic groups in South Sudan, the other being the Nuer - in the presidential guard sought to disarm their Nuer counterparts after the allegations against 11 men were made by Mr Kiir, causing fighting between the two tribes to break out. Once fighting erupted in the presidential guard, Dinkas started ruthlessly attacking Nuer civilians in Juba, going from house to house searching for victims, and killing dozens of them. At senior level, support for both parties is more mixed, on the ground

the reality is different, and is lethally divided between South Sudan’s two main tribes. There were always fears of what an independent South Sudan would bring. With its development stunted by five decades of civil war, few functioning institutions beyond the army, and little semblance of infrastructure left by withdrawing British and Egyptian powers when Sudan gained independence in 1956, William Wallis in the Financial Times argues that “the new state was born with all the makings of a crisis”. Perhaps a unified Sudan, without sanctions, and with its oil income sensibly invested in the proper health, education and infrastructure programmes, would be more effective than the current sum of its parts. Now, as The Bull goes to print, the South Sudanese Army is only 16 miles away from Bentiu, the capital of the oil rich Unity state and one of the two main cities under rebel control, and approaching by the minute, with the dark cloud of renewed civil war looming on the horizon. The world is watching. Dr Garang once said that “If we cannot rise to the challenge and move to the New Sudan, it is better that the Sudan breaks up before it breaks down.” Six months later, his helicopter crashed, amidst circumstances which continue to fuel conspiracy theories. Garang was dead, and with him, any hope of the New Sudan being how he envisaged.



The Bull 23.01.2014

India and Ireland More similar than you think


he similarities between Indian and Irish history postindependence are striking. Both countries were former British colonies which, owing to communal divisions, were divided on independence. Both countries were led for much of the early post-independence period by a single party that represented the majority religion – the Congress party in India and Fianna Fail in Ireland. The leaders of both parties, Nehru and De Valera dominated the political scene until their deaths and both held somewhat mystical views of their country’s history. In economics, both countries pursued initially pursued protectionist, import-substituting policies before liberalisation and opening up to globalisation, although India reformed later than Ireland. However, the take-off period of economic growth occurred at the same time, in the early 1990s with the IT industry prominent in both countries. Not only are there coincidences between the histories of Ireland and India. De Valera may have had a part in a decision crucial to the

political system of India, the world’s largest democracy. When visited in 1947 by one of the officials charged with writing India’s constitution, De Valera urged him to opt for ‘strong government’ and implement the British first-past-the-post system as opposed to Ireland’s proportional representation system. This decision ensured continuous rule by the Congress party for decades with very weak opposition. Unity is a concept that has held totemic power in both countries since independence. Ireland laid claim to the entire island in the 1937 constitution, making it impossible to assuage Unionist fears of ‘Dublin rule’. However, India took things a step further by making the questioning of the territorial integrity of India punishable by law in 1961. Jawaharlal Nehru, who held the post of Prime Minister from independence in 1947 to his death in 1964, held an intransigent and almost mythical view of India’s unity and was not afraid to use force to maintain the borders negotiated during the British Raj. When China was discovered to be building a road in a disputed border region

in 1962 Nehru demanded complete withdrawal and refused to negotiate. War and a disastrous defeat for India followed. The overwhelming desire of India’s leaders to maintain unity and territorial integrity has contributed to the conflicts in Kashmir and in the North East region. The Kashmir conflict is very complex and loyalties differ in the various parts of the Kashmir region. Nevertheless, it remains the case that the promise of a referendum made in 1947 has yet to be fulfilled. Meanwhile Kashmir remains one of the most militarised areas on the planet. In 2011 it was reported that the number of troops in the Indian controlled region was between 300,000 and half a million. This is in a territory with a population of 4.5 million. An insurgency continues and tens of thousands have died since 1947. The Indian government has used the Armed Forced Special Powers Act, which allows troops to deal with civilians with impunity, to retain control of Nagaland in the North-East. This economically impoverished region is connected to ‘mainland’ India

by a strip of land that is at one point only twelve miles wide. The on-going war between Indian soldiers and Naga independence movements has cost the lives of 200,000 people. In 1952 Ireland and India cosponsored a draft UN resolution to ban nuclear tests. However the Chinese threat led India to accelerate its nascent nuclear programme and nuclear tests were carried out in 1974 and in 1998, after which the United States imposed military and economic sanctions on India. These were lifted and a comprehensive agreement on nuclear co-operation was made in 2004. However, India’s continued importation of Iranian oil continues to cause tension with the US. The need to counter the Chinese threat pushed India towards closer ties with the Soviet Union while the United States drew closer to Pakistan during their co-operation in opposing the Soviet invasion of Afghanistan. The loss of markets in Easter Europe and the economic effects of the Gulf War caused an economic crisis in the early 1990s, and India started on the path of liberalisation.

A final similarity between Ireland and India may be how sensitive and prone to over-reactions we both are when it comes to ‘snubs’. India was understandably very upset when one of its diplomatic officials was arrested on charges of visa-fraud and paying her maid below the minimum wage. The punitive measures taken by India in response included removing external security from America’s Indian embassy. Ireland has exhibited the same hypersensitivity. There was furore online over The Daily Telegraph’s entirely forgivable mistake of calling Katie Taylor British. Diplomatically, Ireland should still be making amends for De Valera’s shameful offer of condolences to the German Embassy on Hitler’s death in 1945. The history and conflicts of Ireland and India since independence should be a lesson in the influence and consequences of myth in politics.

have moved towards the construction of luxury cruise liners such as the RMS Queen Mary 2 which was built at the Chantiers de l’Atlantique shipyard in France. Following on from this, another important niche area for European shipbuilders is the construction of yachts and in particular the construction of mega yachts. Although the output in this area is still relatively small in comparison to that of the container and cruise ship sectors, mega yachts represent a clear opportunity for European shipbuilders to cement their place in the shipbuilding industry in the 21st century. The construction of dredging vessels require the application of the latest technologies and the input of a highly skill workforce. The Netherlands and Belgium are today the market leaders when it comes to the construction of these vessels. Dredging is an important preparatory step in the construction of bridges and harbours and has many other uses such as ensuring that rivers remain navigable and land reclamation.

Projects such as the “Palm Island” in Dubai contributed significantly to an increase in demand for dredging vessels over the course of the last decade. As highlighted by a report in 2009 by the European Union on the competitiveness of the European shipbuilding industry, the marine equipment industry and the shipping repair industry are both integral parts of the European shipbuilding industry. The marine equipment industry is largely made up of small and medium sized enterprises scattered across Europe. These SMEs by and large tend to specialise in the production of electrical equipment and the supply of mechanical engineering products such as engines. In this vein, it is clear that their expertise is of particular importance for the manufacturers of yachts, cruise ships and dredgers. The ship repair industry is of crucial importance for the future of shipping in Europe. In this area, the UK, Malta and Greece have to a large

degree moved towards solely specialising in the repair of ships. This is largely due to the fact that these countries are in the path of some of the main shipping routes in Europe and so by specialising in repair, ship owners are guaranteed ease of access to ship repair specialists. It is therefore clear that although Europe may no longer be a major player when it comes to the construction of large container ships, there is a still a place for European shipbuilders when it comes to the construction of vessels which require a more advanced level of labour and technology than may be the case when it comes to container ships. This in turn will help to ensure that corollary industries such as the marine equipment sector can further develop, and it is to be hoped help support the growth of employment in this industry across Europe.

by James Prendergast

Shipbuilding in the EU


ince the Industrial Revolution shipbuilding has been a major part of many European nations’ industrial outputs. Indeed, when one thinks of certain cities such as Belfast, images of shipyards immediately come to mind. However, like many other heavy industries, shipbuilding in Europe is now but a shadow of its former self. This is largely the result of the increased cost of shipbuilding in Europe coupled with the rise of more competitive Asian shipbuilding hubs such as Japan and South Korea, and more recently China. The Meyer Werft shipyard in Germany is the largest shipyard in Europe by order-book and yet even it does not even feature in the top 30 biggest shipyards in the world by order-book. This puts into perspective the greatly reduced weight of the European shipbuilding industry in the 21st century. Moreover, further weight could be added to the argument that the days of shipbuilding in Europe are numbered having regard to the fact

that whereas at the start of the 20th century Europe accounted for 80% of global orders, today China, South Korea and Japan account for 80% of global orders for new ships. However, as will be seen, there is still a place for European shipbuilders in certain niche areas of the shipbuilding industry. If properly encouraged such as through the provision of skilled labour and the latest technologies, as well as ensuring that there is an adequate regulatory framework in place, these niche areas could thrive and therefore ensure that the shipbuilding industry would continue to be a major part of Europe’s industrial and social fabric. In recent years shipbuilders across Europe have expanded and diversified their product ranges in order to ensure their continued viability. This has involved specialising in the construction of certain high value and often highly complex vessels such as cruise ships, ferries and dredging vessels. In Italy, Germany, France and Finland shipbuilders

by Niall Fitzgerald


The Bull 23.01.2014

PLUS ÇA CHANGE I t’s been quite a year for President Hollande. His second year in office saw him anointed with the moniker ‘Least popular President’, and 2013 seemed to bring wave after wave of crises both domestically and internationally. It was also a year of huge turbulence concerning Franco-African relations. With mounting violence in several former French colonial states, and the rise of islamic fundamentalism triggering a number of grave terrorist attacks across sub-Saharan Africa, the Quai d’Orsay (Ministry of Foreign Affairs) and the Elysée were kept busy.

December saw the escalation of conflicts in the Central African Republic (CAR), and the authorisation of an extra 1000 French soldiers, adding to the 400 French troops currently stationed outside Bangui, the capital. The crisis in the CAR marks the second high profile intervention by France in Africa in a few short months. In fact, since taking office in May last year, Mr. Hollande has ordered fresh or continuing military operations in the Cote d’Ivoire, Somalia, Mali and now the CAR. Naturally, a dull muttering hinting of neocolonialism has begun to hum across the airwaves. Is the French gendarme returning to Africa? And if so, what are his motives? But the temptation to return to such clichés should be resisted; France has changed, and so has Africa. No longer is the French Republic interested in Empire, where colonialism is a dirty word, and the realpolitik in Paris has become increasingly insular. The nature of French military engagement has been evolving for almost 20 years, to a point now that wherever possible, France has sought to operate in Africa as part of a UN or EU task force. History leaves its mark, and the French are keen to turn the page on their colonial chapter. Accordingly, from the moment he came into office, Mr. Hollande has taken pains to project an image of cooperation and mutual respect in all dealings with sub-Saharan Africa. He has gone out of his way to consult African leaders on Franco-African policy in an effort to put space between his administration and the previous one. This desire was heavily reflected in his speeches at the

France-African Peace Summit, held in Paris last November. Hardliners assert that Mr. Hollande is using the time-old political manouevre: focusing attention on foreign affairs to distract from domestic disappointments. The more generous among the French public point out that France is the only Western country to fulfill its moral obligation to alleviate human suffering in these regions, too often ignored by the other so-called economic giants.

Either way, these actions are not without political fallout. The escalation of jihadi violence across Mali last January pushed France to an emergency deployment of troops, swiftly executed as a result of existing French military presence in neighbouring countries Chad and Burkina Faso. The influx of weapons that followed the toppling of Gaddafi’s Libya allowed the two dominant fundamentalist Islamist groups to gain control of most of the country, leading the interim Malian president to call upon the Elysée for help. The intervention was initially welcomed by the majority of Malians, and indeed the African Union. However, almost a year on and there is no clear exit strategy: the conflict has not abated, and the French government are bleeding political support with attacks on French journalists and citizens. On December 5th the UN Security Council authorised a peacekeeping operation in the Central African Republic, led by 1,000 French soldiers. Their mandate is to break a cycle of violence in the former colony that has been described as “pre-genocidal”. The CAR intervention will be a big test. News reports have exposed horrific violence, and the situation has deteriorated into a grave humanitarian crisis; refugees flooding



Will the French far-right party, the Front National, be first past the post in 2014?

into neighbouring states, a death toll rapidly mounting, and an uncontrollable swath of rebel youths feeding a rabid instability. The situation has become a powder keg sitting in the middle of a region of immense importance - a history of instability, vast mineral resources and grave humanitarian issues coupled with a rising fundamentalism creating the potential for exponential growth of jihadists. French President Francois Hollande has repeatedly called on the United Nations and the European Union to play

a bigger role in the strife-ridden CAR. France insists that its efforts in the CAR amount to nothing more than a temporary measure to assist the African forces. However, almost a year after initial deployment and 2,800 soldiers still on the ground in Mali, it remains to be seen whether France will be able to cross the river without getting wet. by Anna Brennan

2014 will be a busy electoral year in France. In March, municipal elections take place across the country and in May the French will choose 74 new MEPs to represent them in the European Parliament. The quick succession of these elections is not the only thing that makes them intriguing. Mainstream French party politics appears to be in disarray. The Socialist Party cannot be too hopeful of success in 2014. Under the presidency of Francois Hollande, the economy has nose-dived along with Hollande’s popularity. Opinion polls place Hollande’s job approval rating somewhere around 20%, suggesting that the French people

blame t h e Socialist leadership for their economic woes. Similarly, the mainstream right, the UMP, cannot be too expectant of electoral successes in 2014. They have failed to replace Nicholas Sarkozy with a viable and popular leader. With two leadership elections in as many years they have been subject to party in fighting and much disharmony as tensions rise between opposing ideological factions. Against this back drop of decline for France’s wwmainstream has been the surge in prominence of the controversial, extreme right wing party, the Front National. The FN, under Marine Le Pen, has resurrected, rebranded and reinvigorated the far right in France. The FN has emerged from the shadows and is now seen by many as a viable alternative in the poll booths. This rise was dramatically captured in an opinion poll last October that predicted that the FN will receive 24% of the vote in the May European elections, making it

France’s most popular party. The FN is attracting support from groups previously averse to far right voting. Polls would suggest that as many as 55% of students would consider voting for Le Pen’s party. Riding this wave of popular support, Le Pen has boldly claimed she will be in the Élysée within a decade. Considering the evidence, who is to say she is wrong? Well, quite a few people actually and with good reason. Renaud Dély, Editor of the left leaning Le Nouvel Observatour, has denounced the rise of the FN as a symptom of the state of the French party politics, its supporters simply casting protest votes against the mainstream. Similarly, in early January, Le Parisien newspaper published several articles sceptical of the true strength of the FN, citing its obvious lack of parliamentary power and experience (possessing only 2 members of 577 in the national assembly) as its primary weakness. These points may seem somewhat naive and based in wishful thing. However, deeper flaws lie within the FN that may stall its meteoric rise, one such being its bank balance; the party is bereft of campaign funds. Party treasurer Wallerand Saint-Just has stated that the party needs €30 million for the upcoming municipal and European elections, of which the FN has only been able to raise €8million. Coupled with this practical problem, the party is in need of some ideological pruning. Should she walk up the steps of the Élysée Palace, Le Pen promises to reduce legal immigration from 200,000 per annum to 10,000. She wishes to return the retirement age to 60 and, most drastically, leave the Euro. These policies are not only unobtainable but, particularly in the case of exiting the Euro, extremely ill-advised. Furthermore, much to Marine’s chagrin certain party members have been prone to relapses into the racist, anti-Semitic rhetoric associated with the days of her father, Jean-Marie. Most recently, Bruno Gollnisch, long standing FN member, blogged that ‘the Afrikaner regime was a lesser evil,’ and sang the praises of Apartheid on the day of Nelson Mandela’s passing. Such relapses may deter some possible FN voters. The party’s unrealistic economic policy and financial limitations may also hinder their predicted success. Despite this, their October poll position cannot be denied, similarly the weakness of the Socialists and the UMP means 2014 may well be a promising year for France’s extreme right. The Front National may yet be winners in 2014. by Conor Thompson



The Bull 23.01.2014

Funding Mars: Mankind’s next giant leap


resident John F. Kennedy announced in 1961 that “we choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard”. The ideology was applauded but never really taken seriously. Yet, just 8 years later, Neil Armstrong and his ‘one small step for man, one giant leap for mankind’ quote became immortalised in history. It was July 20th 1969 and the world’s attention was focused on the Apollo 11 mission. The impossible had become possible and a generation was inspired to see what other boundaries could be tested. Thus began 3 decades of fastest set of technological advances the world had ever seen. 55 years later and we’ve been presented with another impossible feat, to once again expand our horizons and challenge the boundaries of what humans can do. Branded

as ‘the next giant leap for mankind’, the goal of the Mars-One project is nothing short of incredible. By 2024 the project aims to start colonizing another planet, to have humans inhabit the planet Mars. The challenges are enormous but the plans in place seem, at least in theory, very workable. Training of the astronauts will begin next year with a test mission launched in 2018. This same year will see the launch of a communications satellite to go into orbit around the red planet. 2020 will see a Rover sent to Mars to begin preparations for human habitation. Due to the orbital paths of the Earth and Mars it will also be necessary in this same year to launch a second communications satellite to Orbit the Sun. This will ensure constant communication even when the Sun passes between Earth and Mars. In 2022 a cargo mission will leave Earth, guided to our planet’s first Martian settlement by the Rover. By

2023 the settlement will be ready for inhabitation. Then, all going to plan, a team of 4 will leave Earth in 2024 destined for a permanent life on Mars arriving in 2025 after a 255 million kilometre journey across space. Contracts have been established with companies who already supply NASA and other space agencies for some of the mission, costs estimates gathered for other parts and, rather surprisingly, they aren’t all that out of this world. The first mission is budgeted at only $6bn or €4.3billon. A practical steal when you compare it to the costs of the now shelved DART Underground (€2bn) and Metro North (€3bn+) projects, or even to the €30bn bailout of the former Anglo Irish Bank. The mission is surprising not only for what it aims to achieve but for how it aims to achieve its goals. In the past such exploits to the stars have been funded either by governments big enough to invest in the

technology or by billionaires with cash to burn. Mars-One is different in this aspect. Mankind’s first permanent settlement on another planet will be funded primarily by us. The Mars-One mission aims to taps the discretionary income of the world through crowdfunding and has already raised over $200,000. By pulling us in with the dreams of going where no human has gone before the mission is getting us to invest in its success and what could be our future. As the project moves further towards reality the second stage of funding will involve the branding and advertising of the entire event. Not only will the communication satellites be used to keep in contact with those on the mission they will enable a 24/7 live stream following the history that will be the creation of mankind’s first out-of-Earth colony. The mission will create what would undoubtedly be the biggest

media event in history and, more likely than not, the defining event of this century. By using crowd-funding, and asking the whole world to donate, we will literally invest in its success. By launching satellites to orbit Mars and relay live feeds to earth it will tap our insatiable need to connect. By even attempting this feat in the first place it reawakens our intrigue for exploration. Throughout history mankind has always sought to find answers, some of which led to questions not previously contemplated. From once we take our first steps we explore our surroundings, we ask questions, we long to understand, to learn and in doing so we constantly strive to be better. We have no idea what Mars may hold, but aren’t you just a tad curious to find out. by Marc Denair

Trinity’s WiSe initiative Heather Lang discusses Trinity’s new initiative, WiSer (Centre for Women in Science and Engineering research) and their work in improving career progression for women in education and research institutions. WiSER, the Trinity based Centre for Women in Science and Engineering Research, held an event in Trinity last November as part of their INTEGER project, which aims to improve the career progression of women in education and research institutions. The Institutional Transformation for Effecting Gender Equality in Research is a European Union supported framework Programme 7 project and has partners is France, Germany and Lithuania. Vice Provost Linda Hogan, who works closely with WiSER, introduced Dame Jocelyn Bell-Burnell. Originally from Belfast, she was one of the first girls allowed to study science in her secondary school in Lurgan and went on to essentially invent a new field of research, radio astronomy, through her discovery of pulsars during her PhD programme. Her supervisor won a Nobel Prize as a result. Professor Bell Burnell went on to become the first female president of the open University of Physics and last year was named in BBC4s Top

100 Most Powerful Women in the UK, among many other accolades. Therefore she is in a unique position to provide insight into why such a gender balance exists in the sciences and how it may be combated. Professor Bell-Burnell presented the findings of ‘An Enquiry into Women in STEM (Science, Technology, Engineering and Maths) in Scotland’, initiated by the Royal Society of Edinburgh and chaired by her, which focused on the postgraduate employment of women in science. The compiled statistics are particular to Scotland but Burnell suspects that they tell a more general story. She describes the pathway of girls from primary level education to beyond third level as a ‘leaky pipeline’. While girls make up about 68% of those studying biology at second level, women make up only 20% of biology professors. The worst numbers are to be found in maths, where girls make up 50% of those in secondary school classes, yet they account for under 10% of mathematics profes-

sors. Once they graduate from third level, 73% of women studying STEM leave those fields in comparison to 48% of men. It is important to note that the question of advancement is not one of concern to only women of child bearing age, “Single women do not progress as quickly as men. There are more subtle issues than caring responsibilities at play”. While the numbers of women in academia has glacially improved over the years, Professor Bell-Burnell had a number of suggestions that could really make a difference. First and foremost, there must be a shift from programmes that support individual women towards a real commitment to institutional change, “Don’t assume that women are the problem, that they don’t put themselves forward. The way that scientific society works is probably part of the problem”. In order to have greater number of women hired there needs to be a commitment from Human Resources departments as well as transparent procedures.

Bell-Burnell strongly suggested that everyone who is involved in hiring staff should be trained to be aware of unconscious bias. In order to keep women in science research and academia at the highest level institutions need to ensure that they have good harassment procedures in place and programmes where women mentor and help support other female colleagues. The most important and universal point that Bell-Burnell made during her presentation was that not only STEM but all institutions, companies, work places need to embrace diversity. Being aware of unconscious bias will not only increase the number of women in science but also members of minority groups. This is good not only for groups who are not white males but good for businesses themselves. Bell-Burnell asserted that those with

the most diverse workforces weathered the recession years the best. The only way to really ensure these kinds of systems are put in place is to provide financial incentive. A good start is being made in Britain where, as of next year, any medical department who wants to apply for funding must hold an Athena-SWAN Silver Award, presented to institutions which demonstrate a woman friendly working environment. Since the announcement Athena-SWAN, a charter for women in science, have been inundated with applications to be considered for an award. If this proves successful, hopefully other governments across Europe will follow suit.



The Bull 23.01.2014

The dawn of a right wing Europe?


t is rare that the myriad electoral systems across Europe articulate a common narrative. 2013 saw the advent of the centre left in Italy where centre right politics had held a stranglehold on politics for nigh on a generation. It saw the centre right government of Angela Merkel’s Christian Democrats achieve a third consecutive term on a wave of popular enthusiasm. It saw the vote of the Social Democratic party of Portuguese Prime Minister Coelho collapse to the benefit of Socialists. The diversity of cultures, historical contexts and political systems mean that political trends in one side of Europe rarely have any bearing on what happens on the other. It is therefore all the more significant when a coherent narrative can be gleaned from elections across Europe. The past few years have seen the fortunes of incumbent governments, of the centre right and of the centre left vary hugely from EU state to EU state. However, one common trend has been apparent. European voters, be they from Finland or Britain or Austria, are increasingly turning to populist right wing politics.

Dissatisfaction with the handling of economic crisis by mainstream European politics has encouraged the emergence and consolidation of right wing populist parties in almost every European state. Right wing populist parties now have parliamentary representation in twelve of the twenty seven European Union member states, most prominently in Poland, the Netherlands and Finland. The extreme right, neo Nazi, Golden Dawn has become a major player in the Greek parliament and while UKIP has thus far failed to win Westminister representation it has enjoyed continued electoral success at a local and European level in the United Kingdom. Even in Germany, which had seemed almost immune to right wing demagoguery post World War II, the Alternative for Germany party only narrowly missed out on the 5% electoral threshold required to be represented in the Bundestag in elections last year. They were only 200,000 votes behind the Free Democrats who have served more years in post WWI German government than any other party. These parties exploit the failings

Nazism Resurgent? The National Democratic Party of Germany

of establishment politics across Europe. They claim to represent the common man against the “other”. They are of the people against political élites. They are of the nation against the foreigner. They tirade against governments they claim are deaf to the interests of their people. They target immigrants, historically typical scapegoat targets, as threatening their states national identity. And they have utter contempt for European governance by foreign élites in Brussels that has championed open borders and liberal immigration regimes. It is the European dimension of Europe’s right wing populists that has captured the minds of a sizeable bloc of voters across the continent. The economic crisis unleashed by the financial crash of 2008 has allowed these sentiments espoused by right wing populists to gain sizeable constituencies. In states that have been hard hit by the economic crisis the European Union is easily blamed as a source of economic woe. The single currency and conditions set by the ECB on crisis lending have been sources of


he National Democratic Party of Germany (NPD) does not conform to common right wing populist trends across Europe.

Although it has received increased media attention over the last three years the NPD is not really a populist party in the common definition: it is not a movement that champions the common person. Rather, it is a right wing extremist group based on Nazi-ideology which has attempted to publicly espouse populist ideals while actively attempting to undermine German democracy through the political use of fear. This “democratic mimicry” can be seen in the NPD election pamphlet for the 2013 General Election. In this document the NPD have exploited anti-immigration sentiments amongst the German population and attempted to brand German non-nationals as criminals, as well as calling from their exclusion from the German Welfare State and labour market. More worryingly, considering modern German history, the NPD have broadcast a number of antiSemitic messages through their posters. For example, posters were printed with the words “Gas geben” colloquially meaning to “go fast” or “get things done”. However, the literal meaning of these posters is “give gas” and the displaying of one

particular ire. On the reverse end of things, states that have fared best economically and sailed reasonably smoothly through the economic crisis such as Germany and Finland have seen increasing reluctance of their people to, in their view, foot the bill of poor economic governance of others. The 2012 Fiscal Stability Treaty referendum in Ireland bore evidence of the pan European consolidarity of vision that exists within these right wing populist parties. We saw UKIP leaflets decrying the treaty delivered to every Irish household and we saw True Finn leader Timo Soini rail against the European establishment on Vincent Browne. Many of Europe’s citizens feel increasingly removed from decision making in Brussels and there is a growing belief that the 2008 economic crash represented the failure of European governance. Such sentiments seriously threaten the stability of the European Union. A stark example of the effects of this growth in right wing euro scepticism can be seen in the UK where even without gaining parliamentary representa-

of these posters directly outside a Berlin synagogue had obvious and disturbing anti-Semitic allusions. It is thus that the ideas of the NPD are communicated on a fine line between populist and criminal in the sense of being anti-democratic. The criminality of this party can clearly be seen in its connections to a series of terror attacks against foreigners conducted by the National Socialist Underground. While the official line of the NPD is to distance itself from this series (maintaining its “democratic mimicry”) some members of the terrorist organisation were also members of the NPD and were (according to Der Spiegel), with high probability, aided by the NPD-politician Ralf Wohlleben.

“The danger of the NPD can not only be seen through its connections to criminality” The danger of the NPD can not only be seen through its connections to criminality, but also in the

tion UKIP has been able to dictate the political agenda with regards the European Union. The UK exiting the EU through a 2017 referendum is now a distinct possibility and Europe bashing is the craze of the year in Westminister. European leaders must listen to what its citizens are telling them. It must look at the root cause of the disquiet. European decision making must be brought closer to the people. More of an effort must be made to engage Europe’s citizens with Brussels’ decision making institutions. More importantly, European governments must work more effectively together to steer their states out of economic crisis and address the weaknesses inherent in the current design of the Euro. If European leaders do not listen, right wing populist parties will be here to stay but the European solidarity responsible for creating the world’s largest single economy and fostering living standards that are the envy of the rest of the world may not. by Eoin O’Driscoll

way in which it acts at the local level. Currently it is not represented in the national parliament (due to the 5% threshold) but the party is a member of the parliaments of two federal states (Sachsen and Mecklenburg-Vorpommern) and also holds around 300 communal mandates. It got these positions by populist actions and making politics for “hopeless areas” with high unemployment by seeming approachable for the people in such regions. While mainstream politicians have noticed the problem of the NPD and taken action upon it by filing a petition trying to ban the party, the root of the problem also needs to be addressed. People are voting for the NPD out of hope that they will address the problems in German society that mainstream parties have failed to. Politicians need to recognise people need hope, they need opportunities. If those who live in these “hopeless areas” continue to be onset by countless societal problems with little hope of address by mainstream politics, people will continue to turn to extremist groups like the NPD and the very stability of the democratic state will be questioned. The recent rise of the right wing Alternative for Germany suggests that a sizeable section of the German electorate continues to be isolated from mainstream politics and is turning to the political right as an alternative. by Anja Schoen


features - special report

The Bull 23.01.2014

EUROPE EURO E v ropa E ora



he founding of the coal and steel community in 1951 marked the beginning of what was soon to become a tradition in Europe: the process of European growth and enlargement. By 1957 a small economic community had been established and soon evolved into what we now know as the European Union (established in 1992). Even in this brief snapshot of the EU’s evolution, it is apparent that a successful policy of enlargement has been embedded in the EU from the offset.

Constitutional and Moral Obligation

The Treaties of the European Union state the EU membership is open to “any European state which respects

the values referred to in Article 2 and is committed to promoting them”. These values include respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities (based on the 1993 Copenhagen criteria). It seems quite obvious that any article, treaty or process that demands and stimulates the implementation of such values is something to be encouraged. Even if we are to disregard the fact that the European Union is morally and constitutionally obliged to grant membership to applicant countries who succeed in enforcing these values, we cannot ignore the political and international benefits of spreading and developing the ex-

istence of functioning democracies and human rights. From its birth the EU has aimed to defend the values outlined in article 2, so shutting the door on European nations that share a commitment to these values is not only somewhat politically amoral but could also prove to detrimental foreign policy decision that damages the credibility of the Union as it may be seen as hypocritical move.


Political theorists and EU politicians have continuously declared enlargement to be the best foreign policy implemented by the EU to date. It allows for the exportation of stability (along with economic well-being) and can be seen as a means of keeping less developed states on the path


With Latvia having joined the euro area this month, and Lithuania enthusiastic about following them in 2015, Patrick Vaughan looks into the pros of expansion of the Eurozone.


n economic terms, the idea of expanding the European Monetary Union certainly has its nonbelievers. Yet I would like to raise several points, which defend the expansion of the Eurozone, and highlight why I think there may yet be hope for the single currency bloc. Up until recently, many had written off the euro area and thus saw breakup as a certainty. They saw debt and budget crises in peripheral countries like Spain and Portugal as deadweight, holding back the Eurozone, as it was hit by wave after wave of reduced investor confidence. Yet all has changed over the past year. Italy may just elect a set of politicians that can agree with one another on certain policies, Ireland has successfully exited its Troika bailout program and, more importantly, its fellow peripheral members also seem to be on the mend as a result. Evidence of this recovery came last week when the Irish economy easily raised €3.75bn from private debt markets, an action that pushed Irish and its fellow PIIGS economies’ borrowing costs down due to expected lower probabilities of debt default. Clearly, austerity-led bailouts, which are easier to carry out with the help of fellow members of a large currency union like the Eurozone, are more

effective than initially believed. Yet bailouts are not the only example of where being part of a large currency bloc with access to massive liquidity can be beneficial. The European Central Bank has long since expanded its initial role of stabilizing the European economy by providing liquidity to its member states where needed. It now plays a large role in resolving all banking and sovereign crises across Europe; it has played a large role in calming markets through creating its Outright Monetary Transactions insurance program, and in recent years it has even contemplated obscure market involvement like setting negative interest rates. Through all this extra responsibility, the ECB has helped Europe emerge from the crisis; with the outlook actually being quite positive as of late (there was no real debt crisis in Europe in 2013). Yet more action may be required, as December Eurozone inflation data of 0.7% rebooted the debate about the need for quantitative easing in Europe. One thing is for sure, the larger the Eurozone (and thus more resources available to it), the larger and more effective these policies can be.

of democracy and peace, preventing old historical demons from re-appearing, as well as improving international security. Rejecting states such as the Balkans, Ukraine, Turkey and others in the east has the potential to create an area of unrest on the periphery of Europe. The security and balance of power issues that could arise can easily be seen if we look at the relationship developing between Russia and Ukraine. Russia has offered to provide Ukraine with a low interest loan of $6billion to help develop its atomic energy industry. Ukraine is estimated to owe Russia around $28million already and the acceptance of such a loan would be step away from integration with Europe and a deepening of Ukrainian economic and political dependence

on Russia. Not only could this alliance hinder the democratic development of Ukraine but it could also prove to be a blow to Europe in that they would lose a state key to maintaining a global balance of power. Successive enlargements have enriched and invigorated the EU. Nordics brought traditions of openness and social justice and environmental awareness; newly free nations in southern Eastern Europe reminded jaded older members of the value of democracy. For the EU to remain dynamic it must remain open. Enlargement adds to the cultural diversity that is one of Europe’s greatest treasures. by Lauren Henshaw

The Eurozone

wish to join the euro must reach many economic goals in terms of debt, inflation and budget requirements; Lithuania was rejected in 2007 due to their high inflation. In an indirect way, the action of entering the Eurozone is itself good for each individual country, as they must improve their public finances in order to be eligible for entry. Despite many predictions of its demise, the euro area has been extremely resilient. As president of the European Commission, José Manuel Barroso said last year “[some people] feared the disintegration of the euro area. Now, we can give a clear reply to those fears: no one has left or has been forced to leave the euro. Next year the euro area will grow from 17 to 18.” His confidence may radiate elsewhere. One must not be naïve, but some hope certainly exists for the future of the currency bloc. A slowly improving economy, the prospect of a crisis-preventing banking union, and a reasonably high level of factor mobility all pave the way for an expanding Eurozone that has the ability to become an economic powerhouse. Political prudence and a bit of luck are absolute necessities.

On another note, countries that



Features - special report

The Bull 23.01.2014

O PA Ε υ ρ ώ π η ora i p E uroopa


he power of agenda setting is more powerful that the common citizen is led to believe. A lack of real debate on whether or not Ireland should remain a member of the Eurozone and, furthermore, the European Union is a failing of agenda-setters of late and something Irish ministers should take time to consider. There are real benefits to membership but unfortunately scare tactics are often the result. Critics argue that leaving the euro would see Irish debt soar in a devalued currency. This is a cop out: should the debt remain denominated in a euro currency there are financial products available that can hedge against adverse currency movements. Furthermore, critics will also argue that Irish policy makers are the ones who guide economic policy in this country, not the EU, and we do have our own independence. It is a fair point but a bound hand can only stretch so far now without legal implications of past promises. The EU has managed to keep itself moving forward for now despite deepening political tensions. However, its success has

Irish Economic Independence A LOST CAUSE

rest upon the demise of individual nations. It is not difficult to highlight a defunct state of affairs with Ireland and the European Union – specifically that of monetary union. Europe has been floundering in its recovery for 5 years now. The union was living on a knife edge in the height of 2012 when Italy and Spain began testing credit boundaries. Cyprus last year reminded officials of how far from “safe” the union truly is. In an ongoing saga, Greece turns up new scandals each day, their most recent being the head of their recovery fund implicated in the revelations of senior executives money laundering. Of course at the heart of the EU, France, once a juggernaut of the EU, has taken radical reform to the detriment of its own competitiveness and economic growth. France is an interesting example in itself as before the rise of Hollande, Merkel was not alone in her reign of Europe. Sarkozy was seen with equal respect and one did not have to grovel at the gates of Germany for a pre-approval to govern one’s own nation. It does beg the question, who actually governs

Europe? A supposed supranational union above the whim of individual states the economic crisis has given power to those who weathered the storm best and herein lies the problem. Upon the signing of the Maastricht treaty in 1992 Ireland in effect relinquished its first hand on economic independence by allowing the ECB, not the central bank of Ireland, to govern monetary policy. “One size fits all” is a phrase often bandied about but not one, despite certain schools of thought, that applies to monetary policy. A key struggle of the discipline of economics is that no two countries are the same. As laws from country to country differ, so too do economic policies and politics aside; one cannot simply implement successful policies of say, the Irish Celtic Tiger to China and export the same success were it to work at all. Chinese have higher tendencies to save, the Irish an obsession with homeownership at (seemingly) any cost. Within the EU, Germany in many manners from culture to economics can be as dissimilar to Ireland as bricks are to wood. It is this logic

that dictates the impossibility of the task of 18 men (The ECB Governing Council) to dictate a policy that is in the best interest of 19 countries and 332 million citizens. Where one decision favours periphery nations it is usually counterproductive to core regions and vice-versa. Furthermore the fiscal stability treaty which entered into law in 2013 allows for no more than a structural deficit of 1.0% of GDP. This also being the generous case, assuming debtto-GDP levels are below 60%: a rule that, as of 2013, fewer than half of European countries complied with. John Maynard Keynes pioneered economic policy that is still today, 70 years in his wake, revered as one of the strongest schools of thought in the discipline. His policy of operating a deficit in a recession is now as useful as beating one’s head against a wall. Here Ireland has relinquished any grasp it may have still had on economic independence and while the IMF may no longer officiate this country, the tools left at our government’s disposal are as powerful as a child’s tool kit. It is this same treaty

that has left the bitter taste of austerity in many’s mouths. Only now, after 3 years of enduring harshness have we discovered that research regarding the need for austerity in highly indebted countries may not have been quite as accurate as we were lead to believe. It is not to be said that austerity hasn’t worked. Resilient Ireland, though not the same, has emerged as the poster child of Europe. The issue thus is not with the medicine (although this too is arguable) but the choice. With the inevitability of business cycles this is not the last recession Ireland will face, nor possibly even the worst. However Europe has demanded we sign away our last pillar of economic independence in how we choose to run our nation’s finances and in turn respond to crises. Europe and Germany now implicitly hold a heavy hand on the tiller of our nation. by Reuben Whelan

“Brexit”: A re-appraisal Maxton Milner re-assesses “Brexit”, Britain’s exit from the EU The United Kingdom, more than any other EU member state, does not fit into the political construct which is the EU. A full appraisal of the economic argument only boosts this incompatibility, in contrast to November’s opinion piece on page 14 of The Bull.

Put simply, Europe matters less and less in the modern world. Neither is it the case that Europe is uniquely important to the prosperity of UK economy. Supporters of this would point to the 44% of British exports (ONS Sep. 2012) which go to EU member-

The UK’s gross contribution to the EU budget in 2011 was approximately £20bn. In contrast, UK’s domestic spending cuts for 2011 totalled approximately £6bn. Clearly, ceasing to pay EU contributions, by leaving the EU, would make a huge difference to the economic pain British citizens are currently undergoing due to spending reductions in many areas.

Put simply:

It is a gross over-simplification to suggest that access to the single market makes this exorbitant price one worth paying. Europe is the only continent in the world in economic decline. The growth of countries such as Brazil, China, and India is resulting in a decreasing proportion of world GDP for European countries. This trend looks unlikely to reverse in the coming decades.

the EU needs the UK, the UK does not need the EU states. The reality starkly counters this, however. Not only is this figure inflated by the “Rotterdam Effect”

– whereby trade destined for the wider world initially passes through Europe and is therefore included in the statistics – but the UK runs a significant current account deficit with other EU member states. Put simply: the EU needs the UK, the UK does not need the EU. Despite commentators’ predictions that the EU would lock Britain out of the Single Market, it would be economic suicide for the EU to do so, especially in such difficult times for the continent. Crucially, Germany, the EU’s power broker, is especially benefitted by trade with the UK. It is extremely difficult to foresee a situation in which the EU would not offer the UK a trade agreement in the style of either Norway or Switzerland. Detractors would argue that this is still little benefit to the UK: Norway and Switzerland, for example, are supposedly without global influence or significance. However, this simply is not the case. Norway and Switzerland, in contrast to EU member states, have their own seat at the WTO. Moreover, the EU’s fabled gigantic size does not translate into international trade agreements;

EU-US free trade has been a British goal since the EU was created in

Crucially, Germany, the EU’s power broker, is especially benefitted by trade with the UK 1992. Negotiations with the Indians have virtually ground to a halt; those with China and Brazil are greatly more distant. Switzerland has no

such limitation. Even Iceland, with a population of 320,000, has free trade with the China. The last great hope of the pro-EU lobby, the myth of ‘influence’, is similarly flawed. There is no intrinsic reason why the lack of a voice in the creation of trading standards ought diminish mutually beneficial trade. The UK has no say in Japanese or Australian standards, yet nonetheless enjoys a prosperous economic relationship with both countries. More importantly, the status quo is of little actual value; most EU decisions are the result of Qualified Majority Voting, making it very hard for a country to actually translate its will into results unless it has broad support. In summary then: a £20bn annual saving; continued access to the single market; freedom to conduct trade deals with world’s growing economic powers; and increased presence in global affairs. From a British perspective, what’s not to like?




The Bull 23.01.2014

Bord Gáis Privatisation; The people The emigration lose out, Again. enigma Centrica, Brookfield Renewable and Icon Infrastructure. This foreignowned, profit-above-all-else, conspiring trio is now the owner of a former possession of the Irish people, Bord Gáis Energy. What have the Irish people got in return? €1.12 billion. The sum Pat Rabbitte TD, Minister for Communications, Energy & Natural Resources, decided to sell out his Labour principles for. While the deal may have been sealed in theory for €1.12 billion, nowhere near that amount will ever be used to benefit the Irish people who continue to struggle through the austere economic policies of the current government. The government is claiming victory for Ireland, celebrating how they persuaded our Troika puppet masters/partners in Europe to allow fifty per cent of this sell-out €1.12 billion sum to be actually handed over to the state for the purposes of “job creation”. The other fifty per cent, five hundred and sixty million euro, will be thrown into the drain of “national” debt repayment and it will barely produce a ripple among the €175 billion that hangs over our heads and the heads of generations to come. The vast bulk of this debt was never the people’s debt in the first

place but private business debt. A debt accumulated for the sake of the ECB’s want to save bankers and financiers across Europe. Now we are selling off the nation’s belongings, selling-out the nation and entering further into the neo liberal wolf’s lair than we have gone before. Rabbitte has deservedly earned the title “Minister for no communications, increasing energy prices and strumpeting natural resources”. I do not recall Labour shouting at voters at the last general election that it would happily pander to Fianna Fáil’s commitment to sell the property of the Irish people and claim success for Ireland, nor do I remember them announcing how they would eagerly do Fine Gael’s neo liberal economic work for them in coalition. Do you remember Pat Rabbitte ever asking the Irish people for our say in the matter of privatising our collective property? Since 2011 gas prices have increased by thirty five per cent and electricity by twenty one per cent. All amidst continuing wage decreases, growing dole queues and the slashing of public services. The ill effects of the “free market” are only too apparent. What’s wrong with the idea of essential resources being owned and

controlled by the whole of the people for the benefit of the whole people and the exploitation of none? What’s wrong with the idea of being for service and not for profit? If one profits, others lose and if one makes super-normal profits, others make super-normal losses. Energy firms, the privately owned ones, and stateowned ones being geared towards privatisation, are making superprofits, the people of the nation are suffering super-losses. What’s wrong with nationalising the Corrib gas and all other energy sources? If you think more private entities, not answerable to the Irish people, controlling our natural resources will be a good thing for the consumer, look no further than Britain. Our new masters, Centrica, continue to cause pain for the British consumer, increasing their gas and electricity prices by up to 10.4 per cent in November. Unfortunately, the neoliberal agenda steam engine rolls ahead. Economic sovereignty means little when superseded by the primordial will of financial markets. by Liam Cowley

Merkel returns for 3rd term Tuesday 17th December 2013 saw the German Bundestag give its assent to the new German coalition government headed by Angela Merkel, who is serving as chancellor for a third consecutive term. Merkel finds herself head of a grand coalition between her own conservative Christian Democratic Union, the Christian Social Union, and the left leaning Social Democratic Party. The coalition holds 541 seats out of the total 631 seats in the Bundestag. This is not the first time that Merkel has headed a grand coalition with the SPD. From 2005 to 2009, the CDU/CSU and the SPD worked in government together. During this first coalition both parties were on a much more even level as regards Bundestag seats, the CDU/CSU having had only won four more seats than the SPD in the 2005 elections. However, in the 2009 federal elections the SPD haemorrhaged seats partly because it was perceived as failing to exercise its authority and gain concessions from the CDU/CSU. Although the SPD made some-

what of a recovery in the 2013 election, the CDU/CSU also made large gains leaving it just short of a parliamentary majority. However, with its preferred coalition party, the Free Democratic Party failing to obtain 5% of the total vote, the threshold required to enter the Bundestag, it quickly became clear that there would be talks between the CDU/ CSU and the SPD about forming another coalition. Despite its weakened position in comparison to 2005, the SPD sought to include as many of its election promises as it possibly in the programme for government in order to avoid any future repeat of the 2009 elections. Coalition negotiations dragged on for nearly 3 months, the longest such negotiations in Germany’s post war history and indeed a far cry from the rather brief post-electoral negotiation process that we are accustomed to in Ireland. What resulted from these negotiations was a 185 page programme for government in which both sides can claim to have exacted some important concessions from the other side.

The return of Wolfgang Schaeuble as finance minister and the promise not to increase taxes or increase debt were viewed as crucial for Angela Merkel. Likewise, the agreement on the instauration of a minimum wage, which was a key election promise of the SPD, was viewed as a significant victory for the SPD. In addition the SPD pushed through its reform of the retirement scheme, whereby, workers will be able to retire at 63 provided that they have worked for a minimum of 45 years. The new minimum wage will come into effect in 2015, while the coalition aims to create no more new debt at federal level starting in 2015. Moreover, it is the coalition’s intention to spend an additional €20 billion on childcare, education and infrastructure. From a European perspective, the participation of the SPD in government has been welcomed, particularly in France where Francois Hollande’s Socialist Party has been traditionally allied to the SPD. Furthermore, the SPD is perceived as generally being Germany’s most ardent supporter of the European Un-

They say in Ireland that both cattle and children are raised for the same purpose: export. This is lucky for me really; I grew up on a farm, which means exported cattle put clothes on my back. But now that I near graduation, I wonder if I will suffer the same fate as my cattle. Will I be put onto a ship, sent to foreign lands and never return to the green fields of home? The fact is, I will. But I will go freely, and I can’t wait for it. As someone who will be leaving Ireland to work in England after I graduate, I find myself being forced into this box of being labelled an ‘emigrant’. Technically, that’s what I am. I’m leaving my home and moving to another country to live and work there. Yet in Ireland an emigrant has connotations of something forced, something bad even. In my youthful naivety, I fail to grasp why this is the case. There is nothing forced about my actions. I go seeking adventure, novelty and opportunity. I ask the question, is emigration such a bad thing? Much discussion I read in the media focuses on emigration as some Irish plague, indicative of our economic failure. I will be the first to admit that forced emigration is obviously a terrible thing. A young father having to move abroad to find work is a life nobody would want. But ‘forced’ is a term of degree, not of a kind. Half of emigrants leave a full time paying job to go abroad. Yet Michael Noonan was blasted in the media for suggesting those leave for a lifestyle choice. Is it ‘forced’ emigration because some choose to command a higher wage abroad? Is a graduate ‘forced’ to leave this country because international experience is vital for their career? Is someone really ‘forced’ to emigrate because they can’t find a job to suit their particular training?

We are living in a very different age than what has gone before us. In fact ,from Dublin, I am quicker getting to an office block in London than I am getting to a friend’s house in Donegal. Between advances in travel and telecommunications, the world really has become a smaller place. I wonder why do Irish people continue to have a tendency to look down on the opportunity to gain experience abroad, to understand new countries and new cultures, and to find your place in somewhere other than the island of Ireland? During our last big recession in the 80’s, half of our ‘lost generation’ ended up returning home to Ireland in 10 years. We won’t be lost forever. I agree with giving people the best opportunity to find work where they want. But this is a luxury, not a right. If you are the 2,000th science undergrad to graduate this year, or the 2,000th tradesman to qualify, can you really expect there to be a place for everyone in our small economy? We are simply not a big enough country to sustain increasingly specifically skilled people. I’m sure this debate will continue long after this recession has ended. I just wonder if attitudes will change. Can Irish people start to look at our likable reputation abroad as an asset to our mobility? To see advances in travel as an opportunity for our own development? Will we be able to see emigration as an asset, not as plague? I hope so, we produce very fine steaks and scholars.

ion. However, with both Merkel and Schaeuble in the key ministries vis-àvis the EU, it remains to be seen what sort of tangible effect that the SPD might have on German EU policy. Indeed, any SPD proposals as regards the EU may find staunch opposition on the part of CSU which has, of late, become increasingly trenchant in its views that the role of the EU should be limited. Moreover, it is clear that the implementation of the programme for government will be challenging to say the least. In 2013, Germany suffered from anaemic growth, with the economy expanding by just 0.4%. Nevertheless, it is expected by many economists that in 2014 economic growth should reach 2% while the German government has predicted growth of 1.7%. If this programme for government is to be implemented, in particular the extra €20 billion in spending, it is vital that growth in Germany picks up. The formation of a new government with a strong majority, to say the least, after such a prolonged period of negotiations is to be wel-

comed. Nonetheless, it is evident Merkel that will have a Herculean task in trying to ensure that the programme for government is implemented in a timely manner, while also ensuring that inter-ministerial disagreements and tensions are kept to a minimum and out of public. Interesting times would seem to lie ahead for Germany and its government.

by Donal Breen

by Niall Fitzgerald



The Bull 23.01.2014

Equities in 2014 - A cautious European perspective I pass three cafés on my walk into university each morning. Each one has a sign in their window that they are looking for help. This is not Dublin but Cologne, the fourth city of Europe’s most populous and largest economy. Long since being identified as the ballast of the ship that is the European project, Germany may not be ‘booming’ as it is often quoted to be, but has certainly helped keep the world’s largest economy (if counted as such) and its member states from descending into sovereign debt, banking or political chaos. Yet as of late the situation elsewhere in Europe has taken an upward turn and the ERM bailout mechanism takes a much earned rest – Ireland, of course, exited its rescue programme at the end of 2013, France enacted much needed labour reforms earlier in the same year, and maybe, just maybe, Greece may finally be getting its fiscal house in order. Accordingly,

many forecasters are predicting a strong year for major markets and blue-chip stocks. Why then would I present such a cautious forecast for equities, arguably the most cyclical of assets, for 2014? Further from home, the U.S. Federal Reserve last month began ‘tapering’ its asset purchasing programme. In layman’s terms, America is printing just $75 billion a month with which it buys its own debt, down from $85 billion. Whilst usually associated with the last rolls of the monetary dice for banana republics due to their link as being purely inflationary, the Fed’s decision came, according to Bernanke, after ‘...cumulative progress and an improved outlook for the job market.’ Moreover, the improved job figures suggest that increased consumer spending and confidence are right around the corner, itself boosting earnings and stock prices in the

US and around the world. Yet what is rarely taken into account is the effect of tapering on interest rates; the Quantity Theory of Money suggests that tapering should lead to an increase in the price of money. With household and company debts still relatively high, an increase in interest rates is likely to reduce consumption and investment respectively, reducing company earnings and by extension negatively impacting a firm’s share price. Government bonds would also become attractive once again as yields rise. Whilst this could be countered by an argument of this not being Europe’s issue, the effects of globalisation and the legacy of financial interdependence that was revealed in 2008 have pushed the West’s financial fortunes toward becoming more, not less, intertwined. The proposed US-EU Free Trade bloc, albeit only in preliminary phases, is likely to make the US economy just

as important as the domestic for the European investor. Indeed, as most investors begin to expect a steady global recovery, much of these predictions have already been priced into stocks as we begin 2014. Total, Europe’s third largest firm by earnings, for example, is currently trading at over 11 times earnings (P/E Ratio), compared to just 8.5 this time last year. The question must be asked as to whether there is any more money to be made in European stocks. The FTSE 100, Euronext and DAX (the British, Dutch and German exchanges, and Europe’s largest exchanges) have seen respective 2013 increases of 12%, 16% and 24%. Whilst Europe is certainly moving away from the brink, has the boat been missed, and is it plausible to expect the value of European firms to increase by double digits for a second year in a row? Finally, while usually con-

demned to the conspiracy section of YouTube, pundits such as Peter Schiff (CEO of Euro-Pacific Capital) have argued that predications of the aforementioned QE causing the value of the dollar to crash will come true in 2014 if and when interest rates begin to rise. Laughed off the set of CNBC in late 2007 for predicting a housing bubble burst in the US, he provides a worrying alternative to the shaky but visible global recovery. As with the full effects of this controversial monetary policy, the direction and scope equities head in the coming year are far from certain, despite big players such as Citi expecting the FTSE to hit 8000 from its current place at 6700. Perhaps I should instead spend the next few years brushing up on my skills as a Barista over that as an analyst? The German coffee market is far more clear-cut for a steady return on investment. by Oliver A. Wray

Increasing the minimum wage A cents-less policy Past editor, Cathal O’Domhnalláin, discusses the likely economic implications of a higher minimum wage in the US, and the alternatives available to policy makers

›› Professor Paul Krugman, economist and Nobel Laureate

In all ends of the American political spectrum vast swathes of cognoscenti and politicians alike are clamoring for an increase in the minimum wage rate to stem the rising tide of inequality. Nobel laureate Paul Krugman lauds the stimulatory effects that higher wages would bring to the US economy, while Jared Bernstein, Joe Biden’s former chief-economist, opines that it would provide an impetus for increasing “the pay of low-wage workers without hurting their job prospects.” Several politicians have chimed in on this voguish schtick by promulgating legislation to boost workers’ pay. 13 States are set to increase their minimum wages in 2014, with President Barack Obama targeting a federal base rate of $10.10. Concomitant proposals have won the countenance of columnists such as Peter Coy and Susan Berfield of Bloomberg Businessweek and Edward Luce of The Financial Times, while progressive think-tanks Demos and The Brookings Institution remain indissolubly supportive of these initiatives. Though undeniably well-intentioned in their attempts to stave off a facsimile of Mark Twain’s Gilded Age, the ideas amplified by advocates of these proposals ignore the practical issues surrounding higher minimum wage policies.

›› Jared Bernstein, Senior Fellow at the US Center on Budget and Policy Priorities and former chief economic adviser to US Vice-president Joe Biden

A 2013 literature review conduct-

ed by David Neumark, J.M. Ian Salas and William Wascher infer that higher minimum wages “pose a tradeoff of higher wages for some and job losses for others.” The unfortunate crux of the issue is that higher minimum wages crowd workers out of employment and nudge firms to experiment with automation as labor costs increase. Employees that retain their positions are likely to be skilled machine operatives in lieu of those with entry-level positions whom the minimum wage is designed to help. McDonald’s, Wendy’s and an array of other fast food outlets have demonstrated an openness to using electronic cashiers and other varieties of labor-saving technology as a counterweight to increasing labor costs. In a similar vein, a 2010 study titled, ‘Will a $9.50 Minimum Wage Really Help the Working Poor’ by academics Joseph Sabia and Richard Burkhauser concludes that increasing the minimum wage would raise the incomes of 11% of workers residing in poor households. These findings are supported by American Action Forum research, which shows that 80% of minimum wage recipients are not in poverty. Even Peter Coy and Susan Berfield, the aforementioned exponents of a wage increase, concede that there are multiple flaws in these proposals, noting that “a higher wage floor could undoubtedly price some marginal workers out of the market.”

While fears that a minimum wage will reduce employment are greatly overblown, it is widely accepted in academic and economic circles that it will discourage firms from hiring new workers. The American Action Forum study estimates that increasing the statutory minimum wage will hinder the creation of approximately 2.5 million jobs. This is equally problematic, as America’s recovery remains anemic and the Federal Reserve refuses to tighten monetary policy until the unemployment figure plunges beneath the 6.5% threshold. This is not to say that there is no solution to increasing the wages of workers: wage subsidies, either in the form of the Earned Income Tax Credit or the Friedmanite Negative Income Tax, could increase wages while eliminating the burgeoning issues stemming from higher minimum wages. In one of the widely-heeded libertarian clarion calls of the twentieth century, Henry Hazlitt beseeches political observers to look beyond goodwill and egalitarian proclivities by examining and critiquing the substantive outcomes of policy decisions. There is no place that this caveat is more palpable than the minimum wage debate as misplaced utilitarian benevolence trumps economic sense.



The Bull 23.01.2014

Labour Markets: Migrating forward to full European Integration

EU States

numbers born in other member states

Migration has become one of the most hotly debated topics in EU policy in recent years. With increasingly integrated financial markets and recent enlargements the issue is not likely to cool down soon. The overall implications of migration on labour markets are ambiguous and difficult to quantify as there are so many channels through which it can make an impact. However, as the ‘European project’ is set to expand and integrate further in coming years the issue could be at a critical turning point. Europe’s population is rapidly ageing with only 15% of the union under the age of 15. This will create significant ripples for labour markets moving forward. In coming years migration will be important in cushioning the demographic ageing in Europe and demand for immigrants is bound to increase in many countries.

rope as a fortress to protect their national labour interests. Therefore it is not surprising that both non-EU and EU migrants face mobility difficulties and flock to more migrant friendly countries such as Canada, U.S.A. and Australia. EU states with high levels of internal movement have low levels of regional imbalances including in unemployment. Changes in the factors of production brought on by new labour leads to redistribution of wages. This indicates that migration within the EU could solve wage inequalities and reduce unemployment. Additionally, the maladaptation of native workers to markets can be compensated through migration. However, while many workers profit from additional labour other workers lose out as immigration often brings about a drop in wages in many sectors.

The introduction of the blue card and the Commission’s attempt to coordinate qualifications and social security regimes proves that Europe is in a state of flux moving slowly towards looser labour regulations. However, Europeans still view Eu-

Human capital will deploy itself where it is needed hence increased mobility within the EU would be hugely beneficial to employment and moreover over all economic growth. Of course, Europe faces the obstacle of huge cultural diversity and language barriers but

The transfer market of professional football players throughout the world is at record breaking levels. Twice a year, in January and in the summer months of July and August, European clubs buy and sell players at incredible prices, showing the wealth of some of the richest clubs in the football world. Football fanatics anxiously wait to hear of the deals that are agreed or have collapsed throughout the transfer windows and monitor the infamous transfer deadline day in which the excitement peaks as clubs frantically try to finalise deals. Unsurprisingly, this summer the English Premier League (EPL) clubs pursued record levels of business. Despite partaking in a demanding economic environment, Premier League clubs spent a record £630m this summer, a 29% increase on the figure of £490 million from last year. The Premier League spent more than any other European League, with the

Spanish La Liga and the Serie A in Italy generating gross spending of £335 million each, a substantially smaller amount. The four Premier League clubs competing in the renowned Champions League this year; Manchester United, Chelsea, Arsenal and Manchester City, had a total gross transfer expenditure of £230m in the summer, representing 37% of the aggregate transfer spend by Premier League clubs. The transfer that got people sitting on the edge of their seats was that of Gareth Bale from Tottenham to Real Madrid for a staggering £85m. The question which will be asked most in the financial world is, ‘How can these clubs afford to spend this amount of money on single players?’ One of the main reasons they can is due to the revenue made by EPL clubs on TV and Broadcasting. Alex Thorpe, consultant of the Deloitte Sports Business Group, stated: ‘This is the first year that Premier League

these issues can be over-come with economic-minded migration policies that include a selection system based on language skills, education etc. and adjustable and flexible quotas. One of the main concerns for national labour markets in the face of further migration is the issue of ‘social dumping’. Each member country guarantees a certain degree of social protection from unemployment. Labour and welfare conditions were considerably higher in the older EU15 states than in the more recent EU12 states and the fear was that conditions would deteriorate after unification. Social dumping in which foreign workers can undercut local workers because their labour standards are lower thus reducing the wages of local workers is a hotly debated issue in European circles and has connotations of increasing inequality. It is a negative externality of an inflexible European labour market coupled with intensified integration. Especially in times of financial crisis with skyhigh figures on unemployment across

most of Europe, protecting available jobs for natives and avoiding social dumping should be a priority. However, alarming financial events of recent years set aside, empirical evidence suggests that the incomes of European workers have been increasing with the integration of European markets. Since the 1960s social protection has risen spectacularly in Western Europe and incomes have been growing steadily. This can be explained by the efficiency enhancing effects of trade integration. There is a strong case for therefore for the integration of European Labour markets.

IRELAND 450,000 FRANCE 2.13 million


by Timothy Munier

2.34 million


3.36 million

Football Finance: Record breaking transfer fees clubs will benefit financially from the league’s new broadcast deals; each club benefitting from a share of the extra £600m of revenues in 2013-14 alone.’ During the 2012-2013 season, Chelsea generated an astounding £113m of revenue on TV and broadcasting, the highest in the Premier League. The leading clubs have been largely successful in developing their commercial revenue mainly due to sponsorship deals. Manchester United had commercial revenue of £120m last year after reporting a 52.2% increase in sponsorship revenue, having announced new deals with two financial services providers in Denmark and Vietnam as well as an agreement with a Japanese social gaming company in the third quarter of last year. Match day revenues are also crucial to a clubs net worth and enables them to spend astonishing amounts of their profits on players. Average club attendances in the

EPL last year stood at 36,000. However, with limited stadium developments and ticket prices increasing in line with increased costs, match day revenues are not likely to increase in the forthcoming seasons. Is the Premier League sustainable? After evaluating figures from the major clubs, it is overwhelming how much debt the clubs are willing to let themselves take on. Of the twenty clubs which were in the Premier League in 2011‑12; eight made a profit, amounting to £82m in total. The largest profit was recorded by Arsenal (£37m profit before tax) followed by Swansea City with £17m profit before tax. The rest all made a loss, with Manchester City recording a loss of £99m. In 2012 Chelsea had a net debt of £878m, clearly an unsustainable financial position. Nevertheless, on-field success supported by improving financial performance off the pitch is becoming a realistic objective for EPL clubs. The

UEFA Financial Fair Play Regulations were introduced to prevent clubs spending more than they earn, thus improving the financial position to enhance long term survival. A more sustainable business model would also prevent clubs with wealthy owners gaining an unfair advantage over those clubs who spend on lower levels. The level of spending will more than likely increase within the next few years, but there must be a cap placed on the price of individual players in order to help clubs become more sustainable and debt free. Football is in a dangerous financial position which is threatening the future of clubs. A viable option is to promote home grown players to reduce the expenditure of the larger clubs as there is no doubt there is sufficient talent in Ireland and the United Kingdom. by Andrew Nevin



The Bull 23.01.2014

US Tapering begins in earnest


n the 18th of December the US federal reserve decided to reduce its monthly bond buying programme from the current $85million to $75million a month. Though the difference seems immaterial, the ripples of the decision were seen across the globe. By beginning to taper the bond purchases, the Fed was signalling a shift to a new stage in its monetary policy, away from the crisis action and radical intervention in the market that categorized the past five years and back to historic, more conventional monetary policy. In the end, the hypothesized “Taper tantrum” in the equity markets never materialised. In fact the market reaction was closer to that of a “Taper-tape” parade as the announcement of new forward guidance by the Fed that benchmark rates would remain at historic lows until 2015 at least, was received warmly by those worried of a sudden increase in the cost of lending. To the surprise of most analysts, after a sudden fall, equities rose sharply on the news. The Federal open market committee, it seemed, had pulled of quite a coup – an expansionary taper decision. The equity markets had long expected the Fed’s actions, but the timing and extent of the reduction remained unclear. The Fed announced over the summer that it expected to have reduced bond purchases altogether when the unemployment rate

fell to 7%, just below today’s 7.3%. A string of positive economic variables have spurred the Fed to act. The US economy today is in a healthier position than was expected a year ago. Unemployment has dropped faster than expected and the medium term growth outlook looks rosier than the recent past. The Budget deal negotiated by congressional leaders also helped assure nervous markets. Inflation too, stable at 1.7%, remains under the Fed’s stated 2% target. The decision was seen as an attempt by the Fed to give an indication to the market of the bank’s aims and priorities going forward. The fact that they have begun the process of reducing monetary intervention is an indication that the domestic US economy regained enough strength to maintain the recovery without drastic Fed action. It may also be an indication that the advisory committee now believes the potential downside risks of the extraordinary loose monetary policy that the bank has engaged in so far may be weighing on their minds to a greater extent. Criticism has been growing around the extent of Fed intervention in the market. Critics point to the surge in equity prices far beyond what would be expected based on earnings and the wider macroeconomic climate. The Fed, they fear, by engaging so aggressively in a programme of quantitative easing is inflating an equity bubble. When the

crutch of QE is inevitably slackened, will equities in turn plunge back to near crisis levels? One particular concern for market analysts was the sustained fall in treasury yields over the summer. Though usually seen as a positive sign that the sovereign debt risk is low, questions were raised as to whether the fall was truly based on favourable market data or whether yields were being manipulated by the vast amounts of money flowing into bonds by the Fed. As such, the sudden rise in treasury yields since the taper was first alluded to in the summer may in fact be a favourable indication that yields are again becoming more responsive to data than monetary manipulation. By engaging in such dirigiste policy, many fear that the normal market reaction to changing circumstances may be nefariously augmented. The flight of capital away from safe assets to more risky and speculative investments as a result of such cheap money in the market may run counter to the Fed’s stated goal of maintaining macroeconomic stability. The inflationary effects of QE may also contribute to an increase in net capital outflows from the US. In Bernanke’s view however, the risk of a calcified, stagnant domestic economy remains the most pressing concern. The market is still performing well below the historical average and industrial output is well below pre crises levels. Until output returns to pre-crises levels, it is unlikely that any sudden action will be taken. The current recovery is the slowest in recorded economic history. The labour participation rate remains at the lowest levels since records began, indicating that the real rate of unemployment may be much higher than official statistic suggest. It is doubtful whether the US has reached the self-maintaining growth that central bankers hope for. As a result, the Fed advisory committee remains extraordinarily dovish in its actions and are careful not to cut down a burgeoning recovery. by Niall Casey

The false dawn of the economic recovery Rebecca Lyttle

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Loss of pharmaceutical patent protection led to a 1% drop in Irish GDP Exports down, Imports up


atest figures from November last show that exports fell on a seasonally adjusted basis of 5% as imports rose 3%, reducing Ireland’s trade surplus to its lowest level in 5 years. Continued weakness in Europe, Ireland’s largest export market, accounted for much of the fall. The drop was led by a sharp fall in pharmaceutical and medical products. Accounting for around a quarter of all Irish exports, the sector was hit badly by the so called patent cliff. This is where companies lose their exclusive patent right to a product and face competition from other firms . The impact of the cliff was so severe that the ESRI projected that it reduced overall Irish GDP by a full 1.0%, reducing growth to a paltry 0.2%. “Given the importance of the pharmaceutical sector to Ireland, such changes may well affect macroeconomic aggregates in a noticeable fashion,” research analyst John FitzGerald said. Even if companies do not cease production entirely, revenue and output will be severely limited. The high profile closing of the Pfizer manufactory plant in Cork was emblematic of this fall in medical exports. The pharmaceutical sector accounts for around a quarter of all Irish exports and half of merchandise exports. Department of Finance research has shown that Ireland will continue to feel the negative impact of the patent cliff for some time to come, though the magnitude is unlikely to be as great as was felt in 2012. In many ways successive governments have put all our eggs in this one economic basket. As the crisis took hold in 2008 and 2009, the government was adamant that the export market was due a take-off and that this buoyant export market would make up for sagging domestic demand. Brian Cowen summarized this mantra; “The figures for exports are strong and I am encouraged by this, the necessary competitiveness improvements are working. We must export our way out of our current difficulties, there is simply no other way.” At the time of this statement, exports were indeed an engine for growth, contributing 5.2% growth to a flat lining domestic economy. But since then, export performance has waned, contributing less than 2% to


Irish growth forecasts. In our current malaise, it is important to remember that Ireland is not the only country angling for an export based recovery. From the UK to the US and across the Eurozone, countries see export growth and increased labour productivity as the best course back to growth. In reality our export growth remains sluggish growing about 15% from the 2009 trough. In comparison the US has seen growth of 27% and Germany a robust 35%. In times of economic strife exports act as an automatic stabilizer. In a time of recession and disinflation, national exports become more competitive, dampening the domestic downturn. As costs fell and labour productivity rose, it was naturally hoped by policy makers that exports would be the motor that would pull the economy out of the mire. The Irish Exporters association estimated the value of exports from the Republic would fall by €2.8 billion this year due to sliding earnings from pharmaceutical sales. We have also seen a reorientation of export away from goods and more towards services, which are less conducive to real growth. In fact our merchandise exports have not improved markedly at all in the last five years and now stand unchanged at €45billion, the decade average. Pharmaceutical and organic chemical exports make up 60 percent of goods sold overseas from Ireland. However, exports of them have been hit in recent months due to a decline in sales of some major drugs that have come off patent. The IEA report also noted the impact on exports of the expiry of patent protection for blockbuster drug Viagra, the active ingredient for which is made in Pfizer’s Cork facility. The current growth looks even less impressive when compared to historical Irish export growth. Exports grew 147.8% in 1980-84 and 86.7% in 1985-89. If this growth did not lift Irish economy out of the crisis, then it is very unlikely to this time. Irish exports expanded cumulatively 148.0% in the 2000-2004 period, but yet is expected to grow at 4.6% cumulatively in 2010-2014. We have yet to see the surge in exports consistent with government expectations of growth.



fter graduating in mechanical engineering, my early career was in manufacturing at a time when Japan seemed to have a monopoly on successful production. I worked in the chemical industry and my employer together with the UK government funded the costs for me to spend a year working with Nissan at a car factory west of Tokyo. The objective was to understand the underlying principles of Japanese manufacturing for application in the chemical industry. I worked in most departments across the factory including production control, quality management, pre-production and also built cars on the production line. I joined a number of Kaizen (continuous improvement) teams and saw at first hand how powerful incremental improvement can be in improving productivity and quality. It is the approach to problem solving and improvement in Japan that has particularly stayed with me. What I observed was a very detailed approach that was pursued with determination to get to the root cause of issues. Attention to detail is ingrained in Japan through the study of kanji – the Chinese characters used in Japanese – that children have to master during their years at school. There are some 2000 to 3000 kanji in everyday use in Japanese


The Bull 23.01.2014

and learning them entails not just remembering the meaning but also the exact number and sequence of strokes to write them. I have also found working in Japan very helpful in appreciating how a different environment can lead to startling different outcomes. As a simple example I had come from a business environment where the focus was on cost cutting whereby maintenance was seen as a cost to be minimised. The focus in Japan is to spend more time and effort on maintenance in the factory as this would lead to longer machine life and greater productivity; maintenance is seen as an investment not a cost. The lesson for me was not to assume that your own familiar mindset and cosy assumptions are the only ones of value. Working in Japan isn’t without its challenges. Japanese was a difficult language for me to learn and I initially focused on learning to speak phonetically. This was a great way to get started but ultimately became limiting. The structure and meaning of the language comes from the kanji characters and you really have to master these to become proficient in Japanese. The transition to living in Japan initially wasn’t very easy and I remember on a number of occasions getting completely lost on the rail

system around Tokyo and having to ask for help in my very bad Japanese. It’s easy to forget how much implicit knowledge you use in your day to day life at home in travelling, shopping, paying bills, dealing with government bureaucracy, etc. At times it can feel very frustrating that you can’t do all the things you used to at home. A lesson for me was not to be too ambitious and give yourself time to learn the ropes in a new country. On the plus side people in Japan can be incredibly welcoming and helpful and people at work make sure that you are always included as a member of the team. My sense is that there are increasing opportunities to work in different countries due to globalization but the financial crises has reduced the funding from companies, governments, universities, etc. to support this and it is now much more down to the individual to create the opportunities for themselves. I also think that some types of work and study are more likely to create opportunities to work overseas. Professions based on science such as engineering, medicine, etc. are possibly more likely to offer international opportunities. Put simply, science is universal but other professions based more on local practice and regulation are less likely to generate international opportunities. I know there are many exceptions to

this but this issue is worth considering if you want to follow an international career. Re-entry to your home country is often reported to be a challenge for many people who have worked overseas. Culture shock on return can feel worse than the initial move; you expect to feel dislocated when you leave but it’s easy to forget that home has moved on while you’ve been away. For example being unfamiliar with current popular culture, slang, jokes, etc can make you feel like a stranger in your own country. Another challenge for returnees is finding the right role to reflect their new experience. Your ambitions and expectations will have changed but overseas experience can easily be discounted upon return. For those coming back to their original organisation their former role may have long since been filled and it is essential to maintain an effective network with former colleagues to assist in finding your next assignment. Returnees also need to be sensitive to others; be careful not to wax too lyrical about how great country X is. You may well have had a great time and have some very valuable experience but remember that everywhere has problems as well as positives. Remember also that while you have been away your colleagues and friends have also been gaining valu-

able experience at home and be sure to recognise this. For me, returning from Japan precipitated going back to university to study for an MBA and taking up a new career direction in Management Consultancy. My objective was to broaden my career and learn new skills to help capitalise on the insights I had gained in Japan. My experience with Nissan and working in Japan has been invaluable. It has helped me get jobs and win business on a number of occasions through adding credibility and a real difference to my experience. I have also continued to use the insights learned as a reference point in my day-to-day work. Being able to cut through confusion with a clear view of how it would have worked in Japan has enabled me to focus on the important issues at some critical times. I currently work for a Japanese company in the UK and Ireland and although my current role doesn’t draw directly on my experience with Nissan I still find it incredibly helpful in understanding the culture of our business.



The Bull 23.01.2014

Erasmus en France


Donal Kennedy recounts his experience on erasmus in France




he idea of a year-long student exchange in France has a lot going for it, in and of itself. For the most intrepid of travellers, the casual bon-viveur or the most committed of francophiles. Course requirements in mind, it was always anticipated that we would leave Trinity for third year and complete a 9-month exchange in France. My choice was SciencesPo, a generalist public affairs school in Paris. In passing, on the academic front, I gained immensely from one of the institution’s hallmark means of assessment: the (in) famous exposé. Meticulously structured oral presentations in French thus quickly became a routine across the range of classes, as did the submission of short memorials. On hindsight, in this respect, the school was a booster for an easier eventual access into the working world. Geared towards evolutions in the work-place, the school prides itself in precisely training its students to be adaptable: where the likes of repetitive oral presentations, the production of brief analyses and the likes are more in line with expectations, in a whole range of sectors. It was fantastic to have the freedom of choosing modules I wished to take in different areas that I hadn’t ever studied before academically. Still in the school sphere, I became involved with a student society focused on the Middle East. I became one of the officers responsible for fundraising and event-planning and met many interesting people from all walks of life along the way. As a piece of advice to those contemplating an exchange or even will be soon departing: endeavour to “melt into” the native student body, it’s a sure way of striking up lasting friendships. It goes without saying that another way of facilitating immersion is not to live in colony with other a considerable number of Irish students. A realisation I came to was what extent the student population of SciencesPo has an international outlook that translates into it being incredibly motivated to learn languages. Being practically bilingual is almost trivial, or at least expected. Here, Irish students, or the “System” rather lags behind in our mathematics and science-centric Education ministry. It is course outside the classroom where my best memories were forged. What France represented to the international students I knew there is also worth of comment. For the many Americans and Arab students on exchange at SciencesPo, in particular, for whom it was the first time

in France, the latter represented more a “way of life” and a “political idea” than just another country. It may be due to France’s millennial history and its precocious formation into Nation-state, and its “universal values” it boasts in diplomacy, coupled with an exceptional territorial presence in the world’s 5 oceans. In any case, the international students I frequented were fully integrated into French culture. Anecdotally, I distinctly remember a classmate from Peking, who during the pause in grammar class, pulled out Proust’s In Search of Lost Time. I was determined to make use of the holidays and travel as extensively as possible to the regions or cities of France I had left to traverse. Thanks to its provincial regions, unimaginably varied landscape and incredible natural wealth, France boasts a diversity that is incommensurable. To climb the Rouen tower in which the national heroine Joan of Arc was locked-up before her (show) trial featured on the list. As did a cycle to the Giverny gardens of Monet. Fait accompli. Geneva in January wasn’t particularly mind-boggling. But, rural Dordogne in winter, the Tarn and the greater Bordeaux region in June after exam-season, where I caught up with a friend from class there were fantastic. Road-tripping across the Alsace Wine Route from North-Rhin to South-Rhin bordering the Vosges mountains, in the month of July in the company of two friends native to the region, whose sporadic use of Alsatian was memorable in itself, also stands out as a treasured moment. A quintessential case in point of France’s diversity is indeed Alsace. I had long wanted to visit Chateau du Haut Koeinisbourg, a majestic fortress on a peak of 2600 feat, at the source of The Lord of the Rings’ creation of Minas Truth and before that, Renoir’s 1937 film La Grande Illusion. Traversing the prov-

ince, the idiosyncrasies of the Alsatians themselves became evident: torn between ethnic difference and cultural affiliations have suffered more than other provincial French in the “revanchist” battles. On a less exuberant note, what was striking over a continued presence in France, and what I had noticed before, was the pessimism that reigns there: across large swathes of society and one that has engulfed the political class, to the extent that the fatalist claptrap seems to win out very often in desterum. On a societal level, I realised to what extent the wounds of France’s past often continue to leave indelible traces on today’s political life and the vision leaders of opinion put forward of the role of France in the world. Even the aftermath of the brutal rupture between the resolute supporters and ideologically driven opponents of French Algeria resurges. The sense that the Republic is sliding towards deliquescence was lived out from a particularly violent political divide: a biploraization of the political landscape, with a tripolarization seemingly in the offing. In conclusion, a final word on how comparatively accessible culture in France is for the youth. It is so, certainly due to dramatic statist interventionism the long-term sustainability of which is regrettably being questioned. Student priced tickets at €5, albeit practically behind a pillar, to see a Molière play at La Comédie Francaise is only one such example. On the whole, the Erasmus experience was an entirely positive on and I can only recommend it to those interested in a period of study in Europe.

Paul Curran

ultinational companies, due to their global presence, face a wide variety of problems on a daily basis. Adapting to changing economic circumstances causes great difficulty in meeting fluctuating consumer demands. The objective of an MNC to operate in other countries is to gain competitive advantage and enhance operational flexibility in several ways. An MNC is able to take advantage of differences in country-specific circumstances. For example, an MNC may choose to locate its productions in a less developed country like Vietnam to reduce labour costs. Also, many pharmaceutical firms are choosing to locate in the south of Ireland due to the low corporation tax rate of 12.5%, as well as the availability of a skilled workforce. The main challenge facing Multinational Corporations is the management of global talent. The difficulty lies in the need to share resources and knowledge across various business units and countries, partly because of the particularly demanding nature of global leadership. One can note Jack Welch’s famous statement that it’s the brightest and best employees who are the ones who should be sent on international assignment in order to gain international experience. However, finding people willing to accept global assignments is one of the greatest HR challenges facing managers. Repatriated employees face political, geographical, economic and cultural challenges. From a managerial perspective it is important to assess whether potential expatriates have the necessary cross-cultural awareness and interpersonal skills, before sending them on international assignments. According to a survey conducted by McKinsey in 2009 there was a widely perceived notion that employees would be demoted after repatriation to their home location. The quality of the support for mobility a company provides also plays a decisive role in determining how

positive or challenging an overseas assignment is for expatriates. In a highly competitive global economy where the other factors of production: capital, technology, raw materials and information are increasingly able to be duplicated, the calibre of employees will constitute the sole competitive advantage available to companies. There is also a difficulty in adapting to local cultures. Employees must adapt their skills to new settings rather than simply attempting to transfer previous skills to a new area of knowledge. Company support and assistance from domestic employees is crucial in this domain. Companies should focus on rotating talent globally across divisions and geographies. Not only will this rotation support the development of company talent, it will also promote greater cultural awareness and diversity. The creation of global mobility programs can be of huge assistance in ensuring talent is maintained and supported on a global level. Well-developed cross-cultural training will allow the expatriate to learn both content and skills that will improve interactions with host country individuals by reducing misunderstandings and inappropriate behaviours. There are huge risks in sending employees abroad. Up to 40% of expatriate managers and their foreign assignments finish early because of poor performance or an inability to adjust to the local environment. About half of those who did remain function at a low level of effectiveness. Thus, the importance of appropriate company support and assistance cannot be underestimated. Given that the failure rate and costs of failure are so high, the importance of getting it right is clear. However, in many ways, it is the attitudes of the multinational corporations themselves that largely contribute to these failures. While 89% of companies formally asses a candidate’s job skills prior to a foreign posting, less than half go through the same process for cultural suitability.



The Bull 23.01.2014

THE BOND BUBBLE: 2014’s GREATEST THREAT? Bonds, in recent years, have a received a burst of popularity. Since 2009, demand for bonds has seen significant growth from both institutional and individual investors alike. Their pull? Low volatility, a seemingly consistent rise in the rate of return and their reliability in comparison to equities. However, with bond valuations rising ominously high in recent years, are investors mistaking these inflating bond prices as a sign of their decreasing risk, rather than viewing them as they really are: A bubble with great destructive capacity? A bubble occurs when assets or securities are being bought and sold at unreasonably high valuations in financial markets. A bond market bubble, therefore, occurs when securities are trading above their true value, usually spurred on by falling interest rates resulting in lower yields and increasing bond prices. Bond market crashes are not a new concept, having occurred in US markets previously in both 1979 and 1994. Such crashes often leave very little investment prospects in which to hide, with previous bond market turmoil spreading its mis-

fortunes into equity markets followed by subsequent drops in stock prices. This is caused by competitive increases in dividends to maintain the attractiveness of common stock against higher bond yields. In essence, if your choice was now between a 5% bond yield and a 3% stock dividend, the decision is simple. So just what has fuelled the emergence of this ever-growing hazard? Primarily, the determinants of bond attractiveness is the obvious risk/yield/price combo. Since the cataclysmic stock market crash of 2008, many investors have sought assets in which they feel secure in the safety of their principal and their stability. This desire for refuge has raised demand in the fixed income market in recent years – with over $304 billion flooding into bond mutual funds in 2012. From the perspective of bond return, it’s important to comprehend that bond





yields move in the opposite direction. In other words, as the interest earned on bonds falls, the price of bonds increase (in order to maintain a relatively balanced rate of return). In accordance to this logic, bond prices have been steadily increasing since

2009, boosted by real interest rates of 0% and largely negative yields. As the market price of bonds has risen steadily, so too has demand, with over $1.2 trillion going into US bond funds between 20092012. All of these factors have, in recent years, been heavily influenced by widespread central bank intervention within the bond market. In line with US Federal Reserve Chairman Ben Bernanke’s POMO - a policy injecting $85bn of printed money into bond and treasury markets - as well as the recently established role of global central banks as backstops for failing corporations and governments, bondholders have been lured into an inflating market with a false sense of security. Signs of this bond bubble are evident. In May 2013, Rwandan sovereign bonds were snapped up with incredulous demand by investors seeking out any fixed income securities still offering a decent yield.

Such actions, described by Fed Chairman Ben Bernanke as “excessive risk-taking” is just one example of the bubble-like characteristics emerging within the global bond market over the last few years. However, 2013 also brought with it worrying signs of a forthcoming downturn in the fixed income market. The past 12 months saw a record $80bn in outflows from US bond mutual funds alone, trumping 1994’s previous single-year record of $64bn in withdrawals. With the onset of tapering knocking $10bn out of the Fed’s monthly security purchases from January onwards, the cracks are beginning to emerge. In tandem with this monumental tapering announcement comes the redirection of large levels of investor funds into the equity markets along with the menacing upward crawl of bond yields. Such pernicious developments now beg the question - with the party seemingly coming to a bitter end, is the bond market teetering on the edge as we enter the new calendar year? by James Buckley

ARE WE CAPABLE OF LEARNING FROM OUR MISTAKES? Since the onset of economic crisis in 2008 millions of letters and words have been published hypothesising the core reasons behind the failure of banks. Regulators, media and even general citizens have all put forward their own theories. Securities, subprime mortgages and an oversaturation of global savings were all cited as being tangible reasons behind our economic disaster. While these commodities were partially responsible for the collapse, there were other intangible reasons behind the fall of 2008. Peter Lunn suggested that there were several cognitive reasons as to why the economic collapsed in such a tumultuous manner. In his article, The Role of Decision Making Biases in the Irish Financial Crisis, he described some of the cognitive

distortions that contributed to the property bubble in Ireland. ‘Groupthink’ and ‘herding’ were recognised by multiple economists, including the Governor of the Central Bank, Patrick Honohan, as being catalysts behind the collapse of the Irish banking system and property market. While the issue of behavioural convergence can be resolved through regulation and smart decision making practice in the financial sector, there are other cognitive distortions which contributed to the crisis but may not be less easily prevented from reoccurring. The question we must ask is: given the cognitive biases that we suffered from before the economic downturn are we capable of identifying and enforcing solutions for them so as to

eliminate these problems? One bias that Peter Lunn analysed was called Extrapolation Bias. This refers to the tendency for people to place more weight on recent events when predicting future outcomes. This problem was most apparent during the Celtic Tiger when exceptionally high growth rates were presumed to be the norm rather than aberrations in long term economic trends. This extrapolation bias continues to distort analyses of both domestic and international markets. Recent suggestions of a future growth in the restaurant sector based on current trends reveal that the onset of global financial crisis has done little to dispel economists’ myopic focus on present trends. Due to the rapid

change in the definition of what the right market in which to invest is; it may prove to be impossible to nullify this cognitive distortion. A Confirmation bias has also affected our analyses of the economy. We have a tendency to seek out information that confirms our preexisting opinions and biases. While there have been individuals, such as Morgan Kelly, who did not fall victim to this bias, the core issue is the fact that individuals have a desire to search for information that confirms their opinions, even if they have no vested interest in promoting their own beliefs. In order for this cognitive failure to be removed, there is a requirement for innate human thought processes to be altered. It is the very nature of human thought and our need for constant affirma-

tion itself that prevents us from accurately assessing economic trends. This article does not seek to propose anything radical but rather to pose a question relating to the human psyche and its influence on economic matters. While we can easily determine and resolve the physical faults of 2008 crisis such as the subprime mortgages, it is far more difficult to develop a solution for the psychological distortions. While we can perhaps alleviate some of the ill effects of our psychological biases in economic analysis their root lies in human weakness itself, in the nature of human thought processes. Biased economic forecasting may well be an inevitable symptom of the human condition. by Michael Bruton



The Bull 23.01.2014

EDITORIAL Enda Kenny, Ireland’s Iron Man? By Edward Teggin, Editor


o many, the comparison between Robert Downey Jr.’s character and our Taoiseach would seem laughable. Iron Man is a superhero who possesses a cyberpathic suit with a formidable arsenal of missiles and gadgets; Enda Kenny on the other hand is a sixty-two year old politician with no immediately noticeable bionics or shiny accessories. And while these are not necessary to govern a country, are we perhaps missing something of the much maligned Taoiseach which would suggest that he is every bit as tough and admirable as the comic-book superhero? The Castlebar native certainly made his intentions quite clear about his premiership when he announced that his first priority would be to renegotiate the EU/IMF bailout, as he declared at the time: “a bad deal for Ireland and a bad deal for Europe.” Though it could be said that this posturing rhetoric about taking on the providers of our bailout was nothing special and that any individual who took up his post would pursue such a line, it should be remembered that his administration persevered in chasing down a reduction of the bailout interest rate; at the same time going some distance to repair Ireland’s damaged reputation in Europe, something which culminated in Ireland’s well received handling of the rotating EU Presidency last year. Throughout this state’s short history governments have always been careful to avoid causing any major rift with the Papal See, something which was plain to be seen in article 44.1 of the Irish Constitution in which the Catholic Church was recognised as having a ‘special position’ in Ireland. As such, an Irish Taoiseach going against the grain of Papal influence in the past could have proved to be a political catastrophe for both Taoiseach and party. Whether or not Mr Kenny was aware of a defined shift in opinion as regards papal influence in Irish affairs when he reprimanded the Catholic Church over the Cloyne Report of July 13th 2011, or if he would have pressed on regardless is a matter open to speculation, but his sincerity and frankness on the matter cannot be questioned. In his speech regarding the findings of the Cloyne Report, Kenny didn’t so much knock on the door as bash it in with a sledgehammer; For those who are unfamiliar with the

gist of his statement regarding the covering up of abuse: “The rape and torture of children were downplayed or ‘managed’ to uphold instead the primacy of the institution, its power, standing and reputation.” I think all will agree that these are powerful words, words whose echoes would have caused a terrible stink in Irish politics not all that long ago. In this respect, our Taoiseach deserves praise for taking a strong moral stand on the issue, a stance I’m sure would cause many to go weak at the knees in even considering. In terms of diplomacy and cultivating links with the international community it would appear that Mr Kenny is making great inroads, particularly in courting US President Barack Obama. I am confident that anyone who owns a television set and was watching RTE 1 on the evening of May 23rd 2011 will vividly remember the great fanfare which greeted President Obama’s arrival in Ireland, and the speech which he gave in College Green. This speech by Mr Obama was preceded by a rather animated introduction from our own Taoiseach. It was an introduction which no doubt will have made many wince in shame at. In a rather excitable state Mr Kenny roared “He doesn’t just speak about the American dream, he is the American dream!” In this view of Mr Kenny it is perhaps easier to see less of Iron Man, and more of Tin-Man from the Wizard of Oz. That is not to say that Mr Kenny has done a bad job in representing us internationally, he has restored much of the credibility abroad which was lost during the days of the Cowen Administration; who can forget that rather amusing video clip of Gordon Brown meeting Mr Cowen in 2008, and after shaking his hand and exchanging pleasantries, walks off leaving Mr Cowen looking very lost. It is unlikely that Mr Kenny would ever allow himself to be shrugged off quite so easily. One of the great political and social arguments to rear its’ head during Kenny’s administration has been the tragic death of Savita Halappanavar. Ms Halappanavar died as a result of complications of septicaemia, followed by multiple organ failure; whilst the media was quick to latch on to the ‘catholic country’ statement allegedly made about the refusal of an abortion, an inquiry found that medical negligence was in fact to blame. As a result of the many inquests and reports which followed Ms Halappanavar’s death, the need

for clarity as regards the legality and use of abortion in Ireland was clearly needed. Twenty years after the X Case ruling, legislation which outlined the right to a termination when the mother’s life is at risk was finally presented to the Oireachtas. As we know, this legislation was subsequently passed and signed into law on 30th July as the Protection of Life During Pregnancy Act 2013. Whatever about individual opinions on the morality and legality of the issue of abortion, it was clearly a bold step for the Taoiseach to take in putting the legislation forward. The vociferous pro-life campaign was a potential political disaster for Kenny and one which could very easily have cost him his job. Instead of carrying out a Samson act however, Mr Kenny came out of the situation relatively unscathed, only losing a Junior Minister in the process. The accolade of being the only leader brave enough

to tackle legislating for the X Case is his. We have of course become accustomed to harsh budgets over the past number of years; the many cuts and tax hikes becoming increasingly painful for many, and a cynical joke for some. Budgets such as these have been necessary both as part of our commitments to the EU/IMF bailout program, but also to make our exchequer margins more acceptable. Standard practice for a harsh budget in which a specific interest group is hit is for a series of protests and critical interviews to be held. In the face of such continual criticism and falling popularity it would have been easy for Kenny to have avoided the vastly unpopular cuts in social services, instead plumping for further tax increases on middle income earners. It is pleasing to note that Mr Kenny has been realistic in his outlook in this regard; while there have been signifi-

cant rises in the levels of tax over the past few years, cuts were also made to services which we could ultimately not afford to continue paying for. It is such stoicism which has brought us to the position where Ireland has successfully exited the bailout program and returned to the international debt market. In terms of Mr Kenny donning the suit; while he is certainly never going to set the world on fire or be regarded as a superhero, he is most definitely a steady hand on the tiller and one whose calming influence and strong leadership has been very positive for Ireland during the past few years and is now touted for a top job in Europe when his premiership comes to an end.

The Bull  

Volume 3 Issue 3

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