More on refugees

Greece 25%

Euro area 11.1%

EU total 9.6%

The German Economic Miracle

The German economy has performed far, far better than the majority of countries in the Euro area. Certainly I am one of the admirers of German discipline and efficiency, but is this the sole reason for German economic success? I don't think it is. I submit that Germany has benefitted more than any other country from the advent of the Euro. The value of the Euro is dragged down by the under-performing countries particularly in Southern Europe, which means that German exports are priced at a lower level than they would be if Germany had its own currency (i.e. the deutschmark). Some say the Germans get a price advantage from dealing in Euros of as much as 40%- who knows.

Conversely many of the countries in Southern and Eastern Europe who are also trading in the Euro are effectively being priced out of many export markets. Again if they had their own independent currencies, these would have floated down, as they did in the past, to reflect the performance of their economies. (Can anyone imagine what the Australian economy would look like if we were stuck on a fixed exchange rate of, for arguments sake, parity with the US$, bearing in mind the collapse of commodity prices)

One may well ask what has all this got to do with the how refugees are handled in Europe. The refugee crisis is asking many unanswerable questions, like: 'Why is the EU unable to agree on a common refugee policy?' The EU may well, temporarily, cobble together some sort of, wholly inadequate, response and the issue will rear its ugly head in a few months (say summer 2016). The Euro issue similarly raises many unanswerable questions, such as: 'Is the wealth being created in Germany and Northern Europe at the expense of bankrupting other countries in Southern Europe?' Together both these issues raise the whole question of the future of the Euro area for a start and certainly not long thereafter the future of the EU- i.e. 'Is it just a trading block or a serious political entity in its own right?' Any change is going to have serious implications for the World economy as a whole. Australia will certainly be affected.

More and More refugees

Because of what is unfolding before our eyes, and the incompetence with which the 'developed' world has responded, the people smuggling routes have now become well established. Apart from Syrian refugees there will also be continuing numbers of refugees from Iraq, Eritrea and Afghanistan and we should just take a look at what is boiling up in sub-Saharan Africa.

According to the UN, the population of Africa has grown from 630 million in 1990 to an estimated 1312 million in 2020, i.e. more than double in thirty years.

No country can be expected to provide the basic infrastructure needed to cope with such population increases in terms of transport services, schools, health services etc. and nor have they. Added to people's woes in most countries in Africa they are woefully mismanaged, corruption is endemic and they face significant threats of violence generated by Islamic State philosophy. Currently Boko Haram in north-eastern Nigeria appears to be uncontainable and the conflict is spreading to the neighbouring countries of Chad and Cameroon. The Islamic State inspired terrorist group, Al Shabab, based in Somalia, has already wreaked havoc in neighbouring Kenya, and this appears set to continue and get worse.

The point is with massively increasing populations, mismanagement, corruption (all the ingredients that helped fuel the conflict in Syria) and an increasing threat of violence, people will be looking for a safe haven elsewhere, and they are already looking at Europe to provide that haven, so the situation can only get worse.

So how is Australia affected by all this? One could argue that it is a European problem for Europeans to solve, despite the fact we have already accepted, happily, 12000 additional Syrian refugees and we may be asked to do more.

The 'developed' countries can't just sit there and hope the whole nightmare will go away. It won't. The one sane comment I have heard on the subject is that of a former French Government minister, now with the United Nations who said that what is urgently needed is the equivalent of a Marshall Plan for sub-Saharan Africa. He's right of course. As has been pointed out above, some $US 150 billion goes into aid for developing countries, so the money is available.

So what does this have to do with Australia? Sooner or later it's going to affect us- there will be a flow on to Asia and therefore Australia. What is urgently needed is a Regional solution right now, with Australia playing a leading role in helping negotiate that.