Paul from Paris

Neveah. It’s “heaven” spelled backwards, and it’s become a popular name for girls in the United States.

This tells me that life in the United States has changed (a lot) since I moved to France. Never in my life have I met a Neveah. Never would I have dreamed that such a name existed, or had become popular.

Names given to babies change over time. They also vary from place to place.

Here are the names most often given to boys and girls in the USA in 2009:

Are names given babies similar across English-speaking countries? Here are the most frequently given in 2009 names in the Australian state of New South Wales:

What about names given to babies in Europe? To highlight differences, consider European countries whose national language is not English. Here are the 2009 results for France:

These are the comparable results in Italy:

Finally, these are the 2008 results for Spain:

The financial crisis in Greece, and especially how this crisis is being handled today, bring back memories of Henry Paulson’s efforts in 2008 to contain the financial crisis in the United States.

The process troubles me. Here’s why:

• Magnification. All 27 EU member states are equal, but the relative size of the Greek economy is small, accounting for about 2.5% of the overall EU GDP.
• Insistence on hasty action. Only immediate action is thought to stop or reverse the crisis. This having been said, when action is taken, the crisis returns: markets fall, instability moves elsewhere.
• The absence of deliberation. The problem is presented as technical and difficult to understand. The solution to the problem is presented as technocratic, not democratic. Politicians appeal to experts (and other politicians) operating behind closed doors, leaving no space for discussion or debate.

Something odd happened to me last week: I felt sympathy with positions taken by the French communist party on the Greek situation. What made me feel this way? The terms of a three-year austerity package, reportedly a condition to a bailout –the word has been transposed from the United States to Greece– by the IMF and EU:

• New taxes, including a 10% hike in excise taxes on gas, alcohol, and tobacco;
• Increasing the value added tax from 19% to 23% (which would mean that a consumer who purchases goods for €100 would have to pay €123).
• Freezing state pensions, increasing the retirement age by two years and the duration of social security contributions by three years;
• Freezing public-sector pay until 2014, and stopping or capping bonuses.

The reported aim of these measures reportedly is to trim the Greek budget deficit by € 30 billion, and to reduce the extent of deficit spending, expressed as a percentage of GDP, from 13.6% today to under 3% by 2014.

Will this work? Will it really achieve the aims intended?

Don’t the aims sound abstract? Deficit spending is nothing new in Greece: why has an acceptable process (in 2009, for example) become impossible in 2010? Why hasn’t Greece acted forcefully to reduce tax evasion, which reportedly costs the Greek treasury €20 billion annually? In the alternative, why hasn’t Greece acted decisively to reform a tax code with a complex tower of increasing marginal rates, in order to reduce the incentive to misstate earnings? Finally, because symbols matter, why haven’t the Greek prime minister and other officials themselves taken steep pay cuts? Why must the first response be huge tax increases and punitive treatment of civil servants (but not necessarily of the programs they administer)? Why does the response come solely from the government, and why are markets absent? Why doesn’t Greece want to grow its economy to promote healthier public finances?

My predictions:

• There’s a disconnect between the Greek authorities and the citizenry at large. It will expand.
• The austerity package will “solve” the problem as much as the Bear Stearns rescue “solved” problems in the United States.
• The “solution” won’t work. Politically, it is not feasible; the markets know this.
• Markets ultimately will realign the financial situation; governments will take credit for this.

French president Sarkozy said, “There is no doubt that the eurozone is going through the most serious crisis since its creation….We can’t let the euro fall. The euro is Europe and Europe is peace”.

That’s one way to see things. Maybe it’s the majority view, but there are others:

• The European Union is not a federal system. The full faith and credit of all EU member states do not back the debts of a single member state.
• The euro is a common currency. It is not a NATO-like pact for mutual defense.
• Having a common currency does limit members’ ability to do certain things, like printing money to settle debts. Markets also discipline states who do this. Member states retain an arsenal of measures to finance expenditures, including deficits.
• EU members in the eurozone accept to follow agreed rules on deficits and public indebtedness. EU members have repeatedly excused members’ failure to meet these requirements.
• All eurozone members issue sovereign (state) debt. Each pays a distinct interest rate: some higher, some lower than others. All universally accept this to be normal.
• Greece today faces higher interest rates than other eurozone members. This is a consequence of Greek deficit spending and a high level of indebtedness, neither of which resulted from exceptional circumstances or unexpected crises. There is no economic argument why Greece should be entitled to access credit at interest rates available to Germany, or France, or Italy.

Activia yogurt

Danone (known in the USA as Dannon) makes high-quality yogurts. It’s a big company that plays by the rules.

I was surprised to read, buried in a press release on a promising first quarter, that Danone had withdrawn requests pending before a European authority to make health claims about two of its dairy products.

EFSA is the European Food Safety Authority. EFSA “was set up in January 2002, following a series of food crises in the late 1990s” as an impartial, pan-EU regulatory agency. One of EFSA’s missions is to review nutrition and health claims.

Danone is committed to “nutriceuticals” or “probiotics” and has a history of making claims about health, or that suggest healthiness:

Bio brand yogurt

• A line of dairy products was long named “Bio”. In French, “bio” is shorthand for “organic”. Danone’s product was not organic. The producer said the name was derived from “bios”, Greek for “life”. But why wasn’t the name then “bios”, and why was the product name was displayed on a green background?
• Danone subsequently chose a new name for the Bio line: “Activia”. In the name, there’s “via”, “life”. Much of the product advertising has centered around “feeling better” and improved digestion.
• Danone also introduced “Actimel”, a drinkable fermented milk product. Actimel is compared to a “fortifier” in French product advertising.

Actimel product

Danone has withdrawn its applications to make health claims about Activia and Actimel before the EFSA because, the company says, the regulator’s criteria are “unclear”.

I’m torn: I’d prefer straightfoward health claims to veiled allusions (which is how I’ve understood Danone’s past product advertising), but I’d want a European regulator to apply strict rules on health claims (such as vegetable sterols that help manage cholesterol). I’m not sure whether or how the two aims can be reconciled.

“Money for nothing and chicks for free”
Dire Straits, “Money for Nothing” (1985)

The story, first reported in The Times of London, quickly gained coverage in conservative media outlets: Antonio Tajani (I’m told that, in Italian, the “j” is pronounced like a “y”), vice-president of the European Commission with the portfolio for industry and entrepreneurship, affirmed at the European Tourism Stakeholders Conference that “traveling for tourism is a right” and that the “right to be tourists” will be at the heart of his policies throughout his mandate.

Tajani also stated that the EU plans to subsidize travel by youth, retirees, and others too poor to afford vacations, which irks conservatives and sounds like a spoof from a Euro-skeptic’s parody of Brussels bureaucrats.

My reaction is fourfold:

• It’s true. It’s for real. It’s change you can believe in. Tajani is a longtime associate of Italy’s Silvio Berlusconi and a seasoned player in European policies and politics. He held the transport portfolio in the previous European Commission (Barroso I) and was promoted in the current Commission (Barroso II).
• The policy proposal –subsidizing leisure travel– is grounded in a belief in a multiplier effect: for every X euros disbursed by Brussels, economic activity in an amount greater than X will result. Tajani also seems keen to encourage off-season travel, to flatten the effects of seasonality on employment and economic activity. For my part, I’m skeptical whether a multiplier effect exists, and I’m inclined to see this as wishful thinking.
• I won’t cast stones at Tajani for qualifying vacation travel as a right. In the classroom, in reply to the question, “What is Europe (or the European Union)?”, I’ve offered as a possible answer: a place where people travel for leisure or fun. This is a norm, an expectation, perhaps a right.
• Tajani’s pronouncement confirms my low expectations for the Borroso II Commission. Is this initiative really at the heart of policies for the Commissioner in charge of industry and entrepreneurship? Is it absolutely necessary that the Commissioner’s web page feature (as of this date) prominently a photo of a lovely beach, with parasols and chaises longues? Isn’t this far removed from industry and entrepreneurship?