Three things Europe must do to bring itself out of the recession: Having had a couple of weeks to look around and get a feel for the place. It is easy to see why people fall in love with European summer. Long days, longer evenings, perfect temperatures and history around just about every corner. It is paradise. However, paradise for a holiday but what about the underlying economy?
Last week, economic figures showed Italy was back in recession. And France has also stagnated, with no growth over the past quarter. With high levels of unemployment. Particularly in the Mediterranean States, something has to give and quickly, if the economic zone is to pull itself out of the economic mire. After all, Germany alone cannot do the job for the rest.
The Good life
The motto for life in Tuscany and wow, how we can all learn a lot from it, is Simplicity, Security and the Good Life. An awesome motto that suits the region well. Farmers work hard, very hard, provide well for the families and enjoy an incredible lifestyle. Money is hard to come by but is less essential for the good life. Where life balance is granted with as much respect. These guys have got it right. With aggro tourism a key part of many farmers businesses. Visitors to the region get to experience this first hand.
The bottom line, like for any farmer, in most parts of the world. Is that it is money earned the hard way and therefore not squandered.
However, by complete contrast, easy money, is easy to spend, live life to the full now. And worry about paying it back – well, maybe never. Sadly for some parts of Europe. The easy money from artificially low interest rates across their part of the region prompted a credit gorge that is unlikely will ever be paid back.
The Hard Workers
The hard working farmers in areas of Europe, toiling for more than 35 hours a week, and retiring – like most farmers – never, or the factory workers in Northern Europe. Must shudder with a mixture of horror and disgust. At the reckless spending that has gone on in several member states.
A prime example was in the news today, being the sad images of the Olympic venues from the Athens Olympics, just 10 years ago. Unused, in ruin and iconic, in terms of easy come, easy go. Marking perhaps the zenith of pre GFC recklessness.
Stats show that lottery winners generally blow the lot on who knows what. Parts of Europe that have enjoyed the benefits of huge and easy credit now face the same fate as former lottery winners. It was fun while it lasted, but now I have to go back to work…. And that hurts.
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More output and effort ie a higher work rate for Europe?
Quaint as it is, stopping for two hours for a siesta in the middle of the day, reflects a time in history. Where one must escape the midday heat. In today’s world, is there room for “come back in two hours”. After all, everything is air conditioned, right! Even our options market in Australia abandoned its lunchtime close years ago!
Ingrained as this is into the fabric of society. I cannot imagine for a moment a factory in Munich. Taking a two hour siesta. However, Europe is a continent of massively varying cultures and views, hard to believe that 60 odd years ago, everyone was at war.
Ground level view
In the northern cities – Paris for example, selected shops close for three weeks for the summer – again hard to imagine that there is a need to escape the heat of summer (air conditioning) and the busy tourist season (customers). Interestingly not just local stores. Even timepiece Bastion Hublot, firmly ensconced in Paris’ dangerously delightful Rue du Faubourg Saint-Honoré, was shut. A crushing blow for me. As I was intending to drop by, and possibly adding to the collection. While the wife was across the road propping up sales at Hermes. I guess a saving is as good as a profit!
The point is with an influx of massive proportions of world travelers being disgorged from Airbus A380’s at an airport near you, keen to spend their yuan as quickly as possible, on as much as possible, not being on parade with the cash register open, quaint as it is, doesn’t sit in the modern world.
That said, there are bastions of tradition that even the most heady of yuan spenders cannot buy their way into, and the roof garden at Hermes is one of them!
But some aspects must not change, irrespective of pressure
Tradition, history and all that it represents is why places like Versaille enjoy north of 5 million visitors a year, even more so – 7 million at the Eiffel Tower. Italy is the world’s 5th biggest tourist destination, grossing some $136bn a year in tourism, alone. Much of which is directed through Florence – heaven knows Michelangelo’s David must be very embarrassed by his poor “showing” in front of so many people.
History is critical and will continue to be Europe’s big earning, as more visitors, especially those from the Middle Kingdom and other emerging economies set out to explore and shop the world.
One thing that struck me, last time I was at home, in London, is that while London’s history defines it, as a City it has re-birthed many times over, most obviously as the World’s financial hub. Can other centres of Europe continue to leverage off their history, while carving out a future in today’s ever fluid economy.
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Well last week’s profits would have paid for my new Hublot – shame the shop was shut! The question is what will those trades be worth to you? If you are on them, potentially a lot, if you aren’t on them, well – it’s not a spectator sport, unless you want a paper trading timepiece!
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