FINSUM

FINSUM

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Thursday, 05 June 2014 00:00

US Broadband Speeds Surpass EU

(Washington)

In a new report that is likely to prove influential to the net neutrality debate, the University of Pennsylvania Law School has published a new study which shows that US broadband speeds exceed Europe’s by a considerable margin. The study contradicts another recent report and is important because it lends credibility to the US’ current model of private sector web infrastructure development. Whereas the US leaves internet infrastructure development in the hands of private service companies, the EU has adopted a social model, where infrastructure is developed by the government and then leased out to service providers. Many advocates for net neutrality—the principle that all web content should be delivered at equal speeds—advocate Europe’s social model, but this report shows that the US’ current approach has provided better access overall. The divergence in approaches has lead to $562 of broadband investment per household in the US versus $244 per household in Europe. 82% of American households currently have access to high speed internet, while only 54% of European homes do. American homes consume 50% more bandwidth than their European counterparts.


 

FINSUM: While America may have broader coverage, the figures here show that Europe has been more cost efficient in delivering high speed access. Let the debate continue.

Thursday, 05 June 2014 00:00

Lithuania Close to Joining Eurozone

(Vilnius)

In what is highlighting more the dysfunction inherent in the Eurozone than the success of the single currency, Lithuania passed a major hurdle to joining the Euro yesterday when the European Central bank formally announced that the country had met its monetary conditions for adoption of the currency. From January 2nd next year the country will begin using the Euro. In theory, all countries in the EU are obligated to move towards making the necessary reforms to join the Euro, but in reality, the final seven countries have made no changes, and have no current plans to do so. Sweden, Hungary, Romania, Bulgaria, Croatia, Poland, and the Czech Republic are all members of the EU, but not the Eurozone and are legally obliged to make efforts to join. However, none appear eager to do so because of the European debt crisis and the “straitjacket” of a single currency that the crisis has highlighted. Lithuania says it is pressing ahead with joining because it will provide additional “security” for the country, especially in light of new pressures from Russia. A single currency helps small countries defend themselves from currency speculators by handing over central banking duties to their EU parent.


 

FINSUM: The Euro crisis has deeply sapped any desire countries formally had to join the Euro, and with anti-EU populism thriving, it does not appear this will change any time soon.

Thursday, 05 June 2014 00:00

Germany Set to Frack

(Berlin)

The German government is finally giving in to relentless business demands and is set to lift the ban on fracking within the country by next year. The business sector has been lobbying relentlessly for the government to allow fracking in order to be more competitive with the US, but the recent boost the movement has received by the apparent need for energy independence from Russia has added gravitas. The government has mandated that fracking would still need to be approved as safe to other resources and the population, with safety having proven a major sticking point in the German coalition government’s opposition to fracking in recent years. German business and consumers have been plagued by high taxes and duties on energy as the country implements a switch to renewable sources of power. Businesses say this has made them less competitive on the global stage. Germany is home to an estimated 2.3 tn cubic meters of natural gas, which could provide 35% of its needs on an annual output basis.


 

FINSUM: So one of the big opponents to fracking on the continent has fallen. It may be only a matter of time until the EU and other European governments also give in.

Thursday, 05 June 2014 00:00

Dutch Gas Field Threatens EU Supply

(Amsterdam)

The Groningen field, in northeast Holland, is the largest active natural gas supply in Europe, providing 35% of the EU’s total output. The field has been active since 1959, but recently it has grown unstable, as its geology has changed, its pressure has dropped, and it is experiencing multiple earthquakes. Residents in the area have grown angry over the small, but damaging earthquakes and now the government has order Shell and Exxon Mobil, who run the field, to cut production by 20% for the time being. According to analysts, these problems and the supply cuts are very important because it will lower Europe’s domestic gas supply considerably, causing a very tight market which could lead to wide-scale disruptions next winter. Europe is currently undergoing a large political and social push for more energy independence from Russia, so a cut to domestic energy supplies will likely have strong political and legislative ramifications.


 

FINSUM: So just at the time when Europe is wanting more domestic energy production, a major source of gas is proving faulty. This development will likely give the continent the pressure needed to follow Germany’s lead and allow fracking.

Thursday, 05 June 2014 00:00

A Study in Failed Democracy: Thailand

(Bangkok)

After thirteen years of democratic rule, Thailand has abruptly fallen back under control of an unelected military dictatorship that is arresting people for reading books and rounding up scores of academics and protesters for baseless “questioning”. This article, published by the Financial Times, delves deeply into the underlying conflicts in democracy, and explains why the “elite” there are so pleased with their new dictatorship. The “elite”—defined as monarchists, the military, and the bureaucracy—view the past several years of elected rule as a “democratic dictatorship” managed by thugs who ran the country for their own ends. However, the vast electorate has grown to love democracy and their leaders, the Shinawatra family, so the conflict inevitably continues as the masses seek to restore democracy over what they see as elite-imposed repression.


 

FINSUM:  This is a truly informative story and brings the struggles in Thailand into clear view. Unfortunately, it seems the situation cannot be resolved quickly or easily and the people and economy will continue to suffer.

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