View from Brussels - General

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UK tech and science communities scramble after Brexit vote

28 July 2016 by Pelle Neroth

Making the best of it seems to be the signal emerging from the London tech community about the Brexit vote. There is talk of turning "adversity into opportunity" and mustering the entrepreneurial spirit that made them successes in the first place. Fintech channels the spirit of Dunkirk. Or maybe the Battle of Britain.

A post Brexit poll of the UK tech community shows that a third of tech firms are planning to put the brakes on new hirings. Three out of four businesses polled think the environment is going to get worse. Many cite worries about the development now of the Single Digital Market now that the UK is leaving and feel threatened by the uncertainties surrounding the ability of EU citizens working in the UK for British tech companies to stay in the UK. Academia, too, is heavily reliant on foreign talent: an astonishing 37% of academic staff in Biology, Mathematics and the Physical Sciences at British institutions are from outside the UK.

But Russ Shaw, the founder and chair of Tech London Advocates, a London tech lobby group, is desperately keen to show that London is still "open for business". The twitter hash tag is #LondonIsOpen for a campaign that was launched by an open letter to London's EU nationals to "assure then they were still welcome in a community they helped create". It was signed by 150 tech leaders and other notables, including London's mayor, Sadiq Khan.

Shaw argued that a wave of post-Brexit deals had "somewhat calmed the waters". He gave a couple of examples. The Japanese firm Softbank has announced that it will acquire the chip designer ARM holdings for 24.3 billion dollars. While tech start up Magic Pony was sold to Twitter last month for 150 million pounds. Mastercard recently announced the acquisition of Vocallink which was another victory for London.

Putting on a brave face, Shaw wrote: "This is not the first time we have overcome difficulties, and sometimes uncertainty can lead to the creation of top-class companies. During the financial crash London began building a world-class fintech industry, and with the right circumstances similar companies could now emerge."

But US private intelligence company Stratfor - which supplies its information at high fees to corporates and governments around the world - concludes that British science and technology may indeed suffer from Brexit. Britain's academic institutions are both internationally reputable and competitive: but they are carried by EU funding.

Between 2007 and 2013, Britain contributed 5.4 billion euros towards the EU's research budget but received 8.8 billion euros back. This helped Britain remain a global scientific leader despite spending 1.6% of its GDP on Research and Development, around half the figure spent by the United States and Germany. While Britain may still - as Switzerland is - be eligible for EU science funding, the sums may well be lower than they are today and, as Switzerland found, access is subject to the whims of the EU.

Switzerland was dropped from the EU's science collaboration programme in 2013 after a local Swiss referendum came out against immigration; and was only recently reassociated with it but with much fewer financial benefits for the Swiss science sector than before, down 40% on a few years ago.

Few in the science and technology community would dissent from the demand that one of Theresa May's top priorities ought to be compensate for the shortfall in funding caused by Brexit in order to keep Britain competitive. Those domestic R&D spending levels are nothing short of scandalous.

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 28 July 2016 09:11 AM     General     Comments (0)  

Which way will British government jump on controversial trade deal?

21 July 2016 by Pelle Neroth

It is my contention that the British vote for Brexit wasn't so much against European bureaucrats and parliamentarians as against immigration and globalisation, as I argued in this month's magazine column.

It was a vote by "normal people" in the shires and depressed industrial towns who hadn't felt personally the benefits of the EU - unlike special interest groups such as British farmers, British scientists, qualified engineers, footloose British students and corporate executives. These normal people sensed in a vague way they had lost out in the "globalisation package" which has included open borders, greater inequalities but more opportunities, greater uncertainties, and the permanent destabilisation caused by the free flow of capital and skills across borders. The EU was a facilitator of this, but it was wrong just to blame those fabled "bureaucrats of Brussels".

Much of the legislation for the EU single market was strongly pushed by Britain; indeed foisted onto the bureaucracy itself as well as the other member states. London became the wealthy crown jewel of Europe - whose banks became prime beneficiaries of a financial European single market - but for the English and Welsh outside the university towns and the capital, there was less joy; and they voted for Brexit.

The newly formed Theresa May government now stands at a crossroads. They know - must know, surely - that they are in power because people voted against immigration and the sense that the British elite had benefited from all this; that the elite have privatised the benefits of globalisation and socialised the costs.

At the same time, the cabinet contains people such as Liam Fox who want even more globalisation for Britain and even closer ties to the global businesses who liked Brussels because it was a one-stop shop for legislation that allowed them to create pan-continental business strategies. There are powerful lobbies behind British politicians; but they will have no public mandate for "more of the same". So will they listen to the referendum result, which was a kind of thumbs down against globalisation?

The TTIP - Transatlantic Trade and Investment Partnership - negotiations will be a litmus test. This deal, dubbed an"Economic NATO", was a far reaching trade agreement meant to tie Europe and America closer economically and politically; a cynic would replace the "and" with a "to", as the superpower is worried about slipping influence elsewhere due to the rise of multipolar forces elsewhere in the world.

It makes sense for Washington to have a Europe that is united economically but politically impotent, as is the case now, not least because of constant British sabotage of any moves towards political unity. TTIP has been very controversial in France and Germany, not least because of the provision that would allow US corporations to sue European states under certain conditions for billions of dollars if profits are jeopardised, if I have understood the arguments against the so called Investor Settlement Dispute Mechanism correctly.

Activism against TTIP in Germany has been particularly strong. Anti-TTIP campaigners have scored points by highlighting the completely undemocratic nature of the negotiations.

Even MEPs are only allowed to view papers related to the negotiations by entering a sealed room on the European Parliament building. They are allowed to bring pencils and a notepad, but not mobile phones.

According to the Brussels based Politico news magazine, polls in Germany show that support for TTIP stands at just 17%. Now, with Britain leaving, the United States is losing its strongest backer inside the EU for TTIP (and indeed supporter for much else that accords with the American interest). So TTIP is even less likely to be concluded now, between a UK-free EU and the USA.

But what about a TTIP that just takes in Britain and the United States? The Guardian reports that, after a recent meeting between Boris Johnson, new foreign secretary, and John Kerry, US secretary of state, a "potentially swift bilateral trade and investment deal with the UK is being suggested by American officials". The "investment deal would in essence allow US companies access to the UK. Britain is the US's largest trading partner in the EU as measured by the total export value for goods". The paper added that there was "strong support in the US Senate for a UK-US deal" which would be able to benefit from "adapting and picking up on the framework and progress made in the current TTIP talks."

Discussion in Britain about TTIP has been almost non existent compared to the debate in Europe. I can't claim to be an expert on TTIP myself, but my guess is that, if all those people who voted for Brexit knew what was in TTIP and knew that the British government was going to push it through, there would be a lot of unease, perhaps even a vague sense of betrayal. The British people wanted the country they once knew back; and their interests are not identical to those of politicians in the Tory party with chums in the City and on the other side of the Atlantic.

Pelle Neroth -- EU correspondent

Edited: 21 July 2016 at 10:00 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 21 July 2016 09:43 AM     General     Comments (0)  

Plenty of blame to go round for upset of the decade

13 July 2016 by Pelle Neroth

The mood in Brussels is funereal. I hear. The EU is a flawed organisation that undoubtedly sucks democracy out of the national sphere and out of the purview of natonal publics and media institutions.

It is undoubtedly a lobbyist's playground, corporate enabler of nation-flattening legislation. But a lot of the legislation it enacts - on, to take random sample, digital privacy issues or car emissions - would have had to have been dealt with by national legislatures anyway, and wouldn't necessarily have been any less bureaucratic.

And democracy anyway has become a weakened affair with the advance of globalisation and the growth of a global footloose financial industry. I genuinely don't think the British public minded Brussels that much; I have covered the field for twelve years. The EU per se has simply not been a concern on the doorstep for some years, polls of voter concern show. There was occasional grumbling.

Some sectors, such as the fishermen, were very angry with the EU and had a right to be so. (But counterbalanced by winners from EU grants, such as British scientists.) But the British political class must realise that - keenly as they themselves have felt the displacement from Westminster to Brussels of power - a lot of normal members of the British public feel that Westminster is just as remote for them as the EU.

Rule by Tory Old Etonians or Labour's graduate sociologists, or by Juncker and his team? What is the difference? The British political class may have found it convenient to shift some of the criticism over the EU referendum vote onto Brussels, when part of the less well off public's anger has been directed at the way the British elite have used the opportunities of globalisation to empower themselves and their careers; while inequalities in Bolton, Middlesbrough and Oldham have continued to grow.

Even after an 11 year period of Labour rule, inequality levels as measured by the Gini index are still much higher than during the Thatcher period. The Brexit referendum vote was as much a protest against London as it was against Brussels.

The "outers" were people who did not see any tangible benefits of EU membership, didn't feel that the EU was the smorgasbord of international career opportunity as it may have been for, say, young British engineers. Better educated and younger Brits voted to stay in the EU.

What the British public were annoyed about - and Cameron said so at his post referendum summit in Brussels - was immigration. And here the EU made a huge mistake in not making concessions when Cameron "toured" European capitals last year asking for limits to the rights of EU nationals to reside in the UK. Angela Merkel said no: that part was not negotiable.

But Westminster is not innocent here either: it was the British government that pushed for enlargement to bring as many poor European states from Eastern Europe into the EU family as possible, in order to weaken the Franco-German impetus for closer political union.

These countries had large numbers of people willing to up sticks and emigrate to Britain, to work as fruitpickers in Lincolnshire and waitresses in Bristol - or tech workers in the City. In addition, the Blair government weakened immigration controls from non-European countries in the 1990s to "rub the Tories' noses in diversity". The utterly changed demographics of cities like London - less than 50% white British - may be Blair's most enduring legacy. And the responsibility for that cannot be laid at the EU's feet.

I feel sorry that it came to this. The tech industry seems gloomy: start-ups always have troubles finding talent, and London's attractions as a global cultural and academic hub as well as the UK's EU membership status have meant a wider and deep, pan European talent pool for tech firms to recruit from.

A company called Forward Partners polled a sample of British technology firms, 80 percent of whom said that the most important reason for staying in the EU would be to enable hiring talent from the EU. With the Tory candidates sending mixed messages about the future rights of EU nationals to live in the UK, it can only create uncertainty, both for inward investment and continued flow of skilled EU immigration.

There is also the question of whether Brexit will damage the financial sector, since the City, Britain's main cash cow and huge employer of engineers, is apparently in danger of losing its right to access the European single market, an access on which its status as European financial capital is dependent.

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 13 July 2016 10:52 PM     General     Comments (0)  

Paris makes war on the automobile

8 July 2016 by Pelle Neroth

Summer is here, and a young man's (and woman's) thoughts turn to travel. Paris is a most popular tourist destination.

It is also trying to steal London's thunder, now that the financial capital of Europe is on its way out of the European Union, with potentially damaging consequences for the City's ability to transact business in the eurozone. That is worrying: the City is a huge factor in Britain's ability to pay its way in the world.

Last week's headline in the Financial Times, which represents the City's interests, demonstrated alarm about how officials in Paris are trying to make hay of the situation: "Brexit and the City: Europe plots a bank heist". The article argues that London-based companies might need to move chunks of their business to a city inside the EU if London gets closed out of the single market for financial services.

Frankfurt, Dublin and Luxembourg are in contention, but it is Paris that has been notably aggressive in courting London's banks. The managing director of Europlace, the Paris business lobby group, has already been in talks with a dozen global banks who, he says, are looking to move at least some operations to Paris. Paris has several strengths: five of Europe's largest banks by assets are based there; it already has a fund management industry second only to London.

The English language is much more widely spoken than a generation ago. Paris is, of course, la ville lumiere, also offers huge cultural variety, as one of the world's great cities. Architecture, lifestyle, gastronomy, all the rest of it.

It is of course way too early to say whether this will lead to anything. As the FT points out, France has an "uncertain fiscal and political environment", code for saying that it is not clear whether Socialist President Francois Hollande has shaken off his soak-the-rich attitude. When elected in 2012 he proposed hitting the rich with a 75% tax rate.

He backtracked, but hasn't managed to quell all suspicions about his attitudes to the Lords of Finance. And whether in our out of the EU, London has many strengths in depth and offers an unrivalled pool of financial expertise, experience and network of relationships in finance..

Still, it is worth reflecting on the possibility that Paris, which has been eclipsed by New York and London in recent decades, will benefit its old cross channel rival's expense.

On the technology front, Paris is showing itself open to new ideas in that way that characterises a global and cutting edge city in its Respire Paris campaign. (Translated as: Breathe Paris.) It is basically touted as a declaration of war on the automobile. Some may think this Luddite; actually it may spur innovation in alternative forms of urban transport and a new approach to living the good life, might it not?

So here is the list: from 1 July the City of Paris will no longer allow cars registered before 1997 to enter the city on weekdays between 8 am and 8 pm. By 2020, older cars will be banned completely, and only cars built after 2011 will be allowed to enter the city at all.

Newer cars have better emissions characteristics. Paris is expanding the area of its annual "day without cars" threefold, to cover nearly half the city, when the event takes place on 25th September this year: motorists who enter the vast pedestrian zone that will be most of the French capital that date will face stiff fines.

Paris has also expanded the number of 30km/h maximum speed limit zones. (That is just under 20mph) The aim is to have the entire capital's traffic driving at 30 km/h by 2020, with the exception of the great boulevards, where the limit will remain at 50km/h, or around 30mph. The paths along the banks of the river Seine will be pedestrianised. Since September 2015, heavy lorries from before 2001 are banned from the city's streets.

The first stretch of a new all-bike superhighway has just been inaugurated. Called the Reseau Express Velo (REVe), the network will consist of dedicated cycle paths entirely free of vehicles; rather than bike lanes added to already busy streets which was Mayor Boris's chief innovation.

If bankers and other financial professionals can be persuaded that biking is the perfect start to a day working the markets, that (and the reduced pollution resulting from the other various measures) will become yet another feature the city can use to attract business from London.

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 08 July 2016 06:11 PM     General     Comments (0)  

Poor should ask the City: pay us if you want to stay in EU

25 June 2016 by Pelle Neroth

The French are pleased. Or rather there is a sense of schadenfreude in Paris, symbolised by the front page photograph in the newspaper Liberation: Boris Johnson, dangling haplessly from a flywire, kitted out in helmet and straps, forlornly waving two union jacks. He looks rather absurd in his precarious solitude and that, of course, is why the newspaper chose it.

The photograph was taken when the erstwhile mayor of London was doing stunts for the cameras during the London Olympics four years ago to drum up attention for the event (and for himself). Perhaps readers will remember the shot. So it has now been put to apposite use by the old enemy across the Channel.

The picture seems to be saying: this is the man who will lead Britain into the wilderness while Paris takes charge of the European community again, reappointing itself with its destiny to be the brains of Europe to Germany's brawn. There are many elite Frenchmen who feel that De Gaulle was always right when vetoing British membership in the sixties, at a time when the British were at the nadir of the economic fortunes and political self confidence.

De Gaulle's successor Pompidou did finally lift the veto, but only after stacking the rules for maximum effect against British interests, maximising farm subsidies which would come disproportionately out of British taxpayers' pockets and into the bank accounts of French farmers. So that was good. But the British gradually grew in influence and power; the English language displaced French as the medium of communication in the EU.

And the single market, a trade agreement, gradually became the main project of the EU. The French argued, not without justice, that a degree of closer political-economic integration was necessary of their favoured project, the euro, was ever going to work. However, their project was only ever going to be half cocked as long as the British vetoed everything the French wanted for Europe.

So you had a common currency which yoked together the more efficient Germans with the less efficient Southern Europeans. The euro underpriced German products and boosted exports - both to China and to Southern Europe, whose citizens could borrow cheaply from European banks. Southern Europeans did not have currencies of their own to devalue and make such products as they sold competitive.

A favoured French solution was to have a common tax and redistribution system to help the Southern European victims of the austerity policies put in place by declining tax receipts.

The British rejected this because it indicated closer European union. It was arguably a suboptimal situation. Cue huge dissatisfaction in southern Europe.

With the British as the eternal troublemakers in the EU out, the way is open to reshape Europe in a way the French find more to their taste. A tighter Europe looks set to be in prospect. At the same time, they will use their insider status to make life as difficult as they can for the British outside it. You can bet that the City of London will be under huge pressure have its "passport" privileges taken away from it which allows it to access the EU bloc without restrictions. Banks have said they will keep their operations in London for the moment; but there is a very real risk of the City of London's importance declining in the years to come. Other European cities will take a slice of the British financial industry market. The British may have to find something else to be good at - manufacturing, perhaps?

I can truly understand the reasons for the leave vote. It was a peasant's revolt against globalisation, against a European Union that privileged the British elite's interests but did little for the common man in Dagenham or Gateshead.

The City of London benefited from being part of an EU, giving it access to a single financial market and able to attract the best talent from Lisbon to Bucharest. Well educated Brits not working in the city benefited from a Europe where English was the lingua franca and they could settle and work anywhere without problems. So far, so good. But it was a fantasy to think that white van man was going to uproot and enjoy the advantages of the smorgasbord of career opportunity that Europe offered educated British professionals such as engineers.

Instead, Europe for them meant mass immigration and pressure on local schools and hospitals, an alienating commingling of cultures in some cases and the creation of parallel communities in others.

The British elite were arguably deaf to this situation. And now they have been punished for ignoring it. There was also the larger question of the failure of the political class to do something about continued social and economic inequalities in British society, inequalities which are quite striking to the visitor's eye.

What next? I have a modest proposal: a negotiation between the City of London and Britain's poorer regions. The poorer regions would say to the City of London: how much is EU membership worth to you? One trillion pounds, two trillion pounds? A deal would be struck for the transfer of the money and another referendum would be held. If the nay sayers prevail then we can truly say that Britain wants problem, of course, is that the Europeans are saying out is out and want exit to take place as quickly as possible. It is tough to be out in the Cold.

Pelle Neroth -- EU correspondent

Edited: 25 June 2016 at 07:04 PM by Pelle Neroth

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    Posted By: Pelle Neroth @ 25 June 2016 06:55 PM     General     Comments (0)  

Brexit really is Hobson's choice

22 June 2016 by Pelle Neroth

I sit, fingers poised over the keyboard, wondering how to summarise such a complex issue.

There is something wrong with modern politics, not just in Britain. The political class have never been more remote from the people. Decision-making has shifted to Brussels and the financial markets.

The European parliament hasn't made any inroads whatsoever into the public's affections in the twelve years I have been covering it. Technology has been curiously unempowering: facebook virtue signalling is no substitute for real political engagement. Social media allows us to bathe in a sea of people whose views are like ours. There are fewer forums for political debate where genuinely different views can be tested and allowed to compete against each other than there ought to be.

Local government has long been ineffectual. Westminster has ceded to Brussels, as parliamentarians well know. In Britain, at least, there is very little division of the powers. Party leaderships control everything.

The problem of referendums is well known: you ask a question, but people may answer another one. For all the issues just outlined, people were not so much worried about Europe because they perhaps realised that the problem of democracy and sovereignty go beyond the undoubted failures of the European parliament to engage people's interests; its relationship to international business lobbying and a host of other things wrong and are lumped under the phrase of Europe's democratic deficit. The problem of democracy extends to domestic failures, too. If you are going to reform Europe, you need to reform Britain.

Most people have just looked away (I believe) about the democracy issue and are more motivated by immigration than anything. (Even though the weakness of the democratic process is what may have brought us to the situation we are at now.) Terrorism plays a part; but mostly it is demographic transformation. The census of 2011 showed that London was less than 50% white British; the figure is very likely to be lower today.

The chief public worry is immigration and identity. But because so many British people are now from ethnic minorities and have British citizenship it is all very difficult to talk about. Britain could close its doors to EU citizens (and yes, millions of Afghans and Syrians may be getting German passports in a few years' time and thus free access to Britain.) but would still have to deal with domestically produced immigration laws that have nothing to with EU legislation, laws which directly let people from different cultures into Britain from outside Europe.

Yes, of course the City and the technology industry need skilled talent off the shelf. It is also true that Africa's population will grow to 4.2 billion this century, and the distance across the straits of Gibraltar is very short. Cameron's desire to emulate Blair led to the destruction of Libya, which is now a source of both terrorism and a conduit for migrants.

Here too technology plays a role: even though it helps fragment the native political community, it also shrinks the world, making lifestyle disparities so very obvious: visions of rich existence and poor existence jostle uncomfortably side by side. What the internet is less good at is showing why some countries are rich some poor. It feeds the appetite for a better life without providing enlightenment why some countries achieve those goals.

The internet has created an illusion of a globalised community where space has shrunk to a single point , which might make younger Western people, post national idealists, think that national borders are no longer important. (Believe me, there are many self professed post nationalists in Scandinavia). But the nation state, as a framework of protecting legal rights, providing a place where one can exercise one's language and culture, is still very important. Institutions, customs, legal frameworks all help prosperity but the nation state is the anchor. (As someone said, if you want to see the libertarians' dream of no government played out, visit Liberia or Somalia.)

However you distribute the blame for how we got to this state, if Britain votes to leave it will undoubtedly pay a first mover price in terms of penalties to the economy. And I believe it will affect normal people.

These referendum really is a Hobson's choice, because if the British vote remain, it can be taken by eurocrats as approval for the status quo. If Britain votes leave, everything will be very complicated, the pound will likely fall (and I will personally lose a lot of money because of my sterling holdings). If Britain votes remain, alienation from the political process (both British and European) and the remorseless demographic change will continue.

I don't think anyone has worked out how technology can make these problems better. If there is anything that fits the laws of unintended consequences, it is technology.

Pelle Neroth -- EU correspondent

Edited: 22 June 2016 at 09:15 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 22 June 2016 08:44 AM     General     Comments (0)  

Office workers, you have nothing to lose but your chains

18 June 2016 by Pelle Neroth

I spent a fortnight in Budapest recently, avoiding all the tourist sights. That makes me, according to sociologists studying these things, into a post-tourist tourist.

I wrote two chapters of a book and did some freelance translation work.

You don't need a desk to those things. You can sit in a café in Budapest - or Paris, or Ljubljana. Ryanair and increasingly ubiquitous wifi opens up all the possibilities.

One British student, featured in the Daily Mirror, does his commuting from Gdansk to lectures in London. It is cheaper for him to fly in on the morning shuttle Wednesday, spent a day at lectures on Wednesday and Thursday (staying at a London youth hostel) and flying back to Poland's Baltic jewel on a Friday. He saves thousands of pounds a year compared to renting student accommodation in London, even if you add in the flight costs. Rents in Gdansk are 25 pounds a week.

It is banal to say that technology is changing the way we work. But most white-collar workers still do 9 to 5 jobs in fixed locations, surrounded by the same people they see every day. Does this boost productivity? I don't know: the benefits of brainstorming with your colleagues and being close to the boss contra the stresses of office politics and the frustrations of the non-working office coffee machine. (The coffee in Budapest is excellent). In the most fevered dreams of the European Commission in the mid 2000s, when "innovation" was the Holy grail, Europeans would have total job mobility, clustering in the innovation capital specialising in their area of preference. I don't think that has really happened. Most people have language and contacts in their home country. My Hungarian is not very good.

But technology has leaped to the rescue, enabling us to physically live in another country but working for a domestic employer. Most white-collar jobs are about information manipulation, or information exchange, are they not? You can't do hairdressing from a remote location, to state an obvious example, but couldn't British tax inspectors do their jobs from a continental café? In theory?

The post-tourist tourist is a new segment that city mayors are trying to appeal to apparently. We use Airbnb (excellent, by the way), stay for weeks rather than days, shun all the usual tourist stuff. We are nimble and discriminating. But because many of us are journalists, mayors hope we will write articles and generally create buzz on the internet that their city is the next good place for digital nomads to hang out in - or even better, as places where much sought after programmers and coders can imagine settling for a year or two. Location still matters; after all, you have to pay your income tax somewhere.

In turn, Warsaw, Leipzig, Vilnius, Prague and Tallinn have all enjoyed being anointed as the "New Berlin" by roving technology journalists. It's not all fluff, at least mayors are pretty serious about it. Berlin is one of Europe's premier start-up hubs: it offers cheap rents, start-up fairs, and groovy cafes and galleries, the latter of which help boost digital and all round creativity in various ways. In the age of globalisation, cities are increasingly having to fend for themselves, separate from their national governments somehow, living and dying on their "city brand".

Buzz - preferably of the non-sponsored sort - generates a clustering of IT talent, which generates investment. That's the hope. The jackpot is when Google or Microsoft set up a development centre in your city.

Doing some research, I don't think any of the East European cities are in Berlin's league, or even approaching it. Germany is, after all, still Germany. But Eastern Europe's cities have certainly changed a lot for the better since the days when you had to book three days ahead to make an international phone call from the city post office.

Now service is done with a smile, usually in English and, according to one ranking, provided by the European Digital Forum*, places like Prague offer faster download speeds than London or even Stockholm. Where they fall behind is on access to capital and business environment. But Eastern Europe's cities score highly on quality of life. In this particular sub-ranking, London is in 35th place of 35 cities.


Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 18 June 2016 12:44 PM     General     Comments (0)  

EU moves towards Open Access science publishing

13 June 2016 by Pelle Neroth

Good news for researchers, scientists and engineers not working near a major research library. The EU has just called for published research to be made, free, or Open Access, on the internet, from 2020.

The decision by the European Competitiveness Council is not binding but puts pressure on member states to make their science and academic publishers start dismantling the paywalls that are the basis of their considerable profits.

According to the Frankfurter Allgemeine Zeitung, companies such as Elsevier made 30-35% profit margins on a phenomenon that critics have long described as paying through the nose again for what you have already paid your taxes for. The British government's former science minister David Willetts, for one, has argued along these lines. The taxpayer has paid for universities who put out research, which is published in science journals, which are then behind paywalls which, if said taxpayer wants to have access to it, means the taxpayer forking out again for research he has already funded through his taxes. Unfair or what?

I personally love the idea, since I read a lot of research papers and being able to do so from a cafe or from home, wherever I am, is a lot more convenient than trekking to the British Library and spending a day there in sleep-inducing half light of their reading rooms.

There is a lot that is already free to download, and other material one can get by underhand ways (not that I personally have ever used the Pirate Bay of science publishing, SciHub). But a lot of stuff, frustratingly, lurks behind high pay walls: $30 for a single science article. Most researchers who are part of institutions have access to these journals by the fact that their college pays subscriptions to these journals. But again, it comes down to a funding justice issue. The state, the taxpayer, is the ultimate paymaster for university research. Why should the fruits of this research be withheld from the public?

One is almost tempted to believe that this is another one of those ploys by the EU to make the public love it on the eve of the Brexit vote. (Just as the EU forced the abolition of mobile roaming fees a month ago.) Except for the fact that this is hardly a hot button issue for the general public and most researchers in the UK are pro-EU anyway. (Except for James Dyson.)

Inevitably there are issues connected with a move to Open Access publishing. There is no such thing as a free lunch. It will upset the science publishers, obviously, who insist they provide an important service: copy editing, arranging for peer review, providing a filtering process against bad research in the same way that publishers of fiction books such as HarperCollins have to read all the dross that lands on their desk so that you don't have to. In a world of infinite amounts of information, science publishers are providing quality assurance, that the research you read in their journals has been processed through peer review is generally worth reading.
There are of course those who say this process is not the gold standard it was, citing various publishing scandals.

But if you accept the premise that science publishers are still needed, you will arrive at another problem, which is that someone will have to fund them. If not the marketplace; well, the author/academic - or rather, the institutions he works for, since paying-to-be-published will run into the thousands of pounds. That will shift power to administrators at universities, who may not be the best judges of which research at their institution is most worthy of being promoted. For instance, I have just talked to a number of academics in Sweden who complain that administrators already have too much power as Sweden has moved from the collegiate self governing system to something called New Public Management.

With administrators who are appointed by and responsible to governments and not academics themselves, I have been told from senior "dissident" professors - free to speak out because they have tenure - that this has led to a politicization of research. If you are working on gender science or climate science or even other areas, you already have to toe the political line. They have even set up a website,, that talks of the abuses. I am sure that if these things happen in Sweden, they happen elsewhere.

If you accept their argument, researchers could to an even greater extent than now avoid controversial areas or think too innovatively if university leaderships control the funding to pay for publication. At least the situation where the author did not pay for his work to be published by a commercial science publisher - which instead was remunerated by reader subscriptions - created a measure of autonomy in the system.

The EU's deadline is quite short one. It has taken about 15 years to move towards a situation where about 20% of research is already open access, under various piecemeal national initiatives. Under the terms of the EU agreement, the remaining 80% is supposed to be freed up in the next four years. I think everyone wants research that is easy to access and available (because it promotes innovation and because we have already paid for it). Knowledge is not a zero sum game: it is good if we all have more of it. Think of all the people in the Developing World who will have access to all this tremendous reserve of knowledge! At the same time one has to try and forestall the negative effects and unintended consequences that all reform leads to.

Pelle Neroth -- EU correspondent

Edited: 13 June 2016 at 11:13 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 13 June 2016 11:01 AM     General     Comments (0)  

EU internet censorship, why not just re-elect the people

6 June 2016 by Pelle Neroth

When world's most powerful woman looks at you in a certain way, even the internet's most famous billionaire looks back with an expression that could only be described as timorous.

It was just the briefest of exchanges. The setting was a UN development summit late last year; the actors Mark Zuckerberg, CEO of Facebook and Angela Merkel, Germany's Chancellor. The issue: hate posts on the social networking site, specifically racially motivated postings by Germans, in German, against immigrants.

Germany has the world's most generous immigration policy - about a million arrived last year, many refugees from warzones but many also economic migrants and opportunists - and the fabled postwar tolerance is cracking. Merkel went out on a limb for this policy; her popularity has suffered.

After all, the millions of Turkish guestworkers who came decades ago have integrated poorly. A study by sociologist Ruud Koopmans indicated that second generation Muslim immigrants are not very assimilated. They are almost as socially conservative and of the belief that the rules of the Koran should take precedence over the rules of the country in which they are born as their parents. Academic paper here; see Fig 1 for second generation conservatism.


People vent their frustrations and all sorts of other feelings on Facebook. So Merkel took Zuckerberg aside and said - in an exchange captured accidentally on an open mike by the UN's audiovisual service - what are you doing about it? She speaks good English. Zuckerberg replied that he was looking into it. Pictures said more than words.

And so Facebook launched an initiative, along with the publisher Bertelsmann, called Initative for Civil Courage online. Facebook's chief operating officer, Sheryl Sandberg, explained that, "Hate speech has no place in our society -- not even on the internet."

Commentators have described this as problematic for free speech. Europe's demographics are changing, and poll after poll shows that the population of Europe is extremely uneasy about current immigration policies. Mrs Merkel's policy is an elite one, supported by left liberal journalists, academics and the professional middle classes whose income and station in life insulates them from some of the negative effects of immigration - for now. It is the same situation, I think, in the UK.

A few problems are raised by the Facebook censorship issue, say commentators. First, it gives a private organisation the right to determine what is acceptable speech. What is to say that inexperienced junior moderators over at Facebook central won't overcensor and quell legitimate political debate about the supreme political issue of our time? Facebook, not the European parliament, has, faute de mieux, become the village square of Europeans. It therefore has a serious responsibility to be committed to free speech.

The right to criticise religion is what Voltaire and John Stuart Mill fought for. Are we know moving back on all the advances of western civilisation as inexperienced moderators confuse criticism of Islam with hatred of Muslims?

Third, it may not work, if the aim is to make society a better place. It is like taking aspirin for a serious diseases. It attacks the symptoms temporarily, but does not solve the underlying problem which, in the absence of oversight - since the stuff is now being censored - expands until it becomes unsolvable. People will still seethe inside, won't they? The Weimar Republic apparently had plenty of hate speech laws: it didn't stop Nazism. People expressed their feelings at the ballot box instead.

Maybe average people, conservative, cautious and selfish as they are, can only cope with so much change. Politicians have to work within that framework; they mustn't run ahead of their people and be too idealistic. The criticism should be seen as a warning to Merkel; it is wrong to silence it. It all smacks of that Bertold Brecht poem that went "Would it not be easier in that case for the government to dissolve the people and elect another?"

Anyway, the European Union has now gone ahead and raised the stakes. Last week, the EU announced that, in partnership with Facebook, Twitter, YouTube and Microsoft, it has unveiled a "code of conduct" to combat the spread of "illegal hate speech" online in Europe. It's not legally binding yet, but recommendations have a way of becoming laws.

One paragraph from the code of conduct that leaped out to my eye was this one:

"The IT Companies and the European Commission, recognising the value of independent counter speech against hateful rhetoric and prejudice, aim to continue their work in identifying and promoting independent counter-narratives, new ideas and initiatives and supporting educational programs that encourage critical thinking."

Counter narratives? What on earth does that mean?

The National Secular Society (NSS) has warned that ex-Muslims will be censored online. Apparently there is a lot of debate between current and ex-Muslims about the virtues, or not, of Islam. The NSS claims that the Council of Ex-Muslims of Britain has now begun collecting examples from its followers of Facebook censoring 'atheist, secular and ex-Muslim content' after false 'mass reporting' by 'cyber Jihadists.' They have asked their supporters to report details and evidence of any instances of pages and groups being 'banned [or] suspended from Facebook for criticizing Islam and Islamism.'

The respected Index of Censorship group, meanwhile, warns that the move gives power to unelected corporations to determine what amounts to hate speech - and police it. "It will simply drive unpalatable ideas and opinions underground where they are harder to police - or to challenge."

I don't think, however, that this is an area where Brexiteers can claim this is an example of European superstate authoritarianism: British domestic free expression laws can be just as draconian, to this observer. A ten month jail sentence for attaching bacon to the door handles of mosques?

I mean, come on. Yes, that may have been a hate crime, but where does that leave pranksters. Britain can be a very punishment-minded place. And it is not all a wee bit hypocritical for the British government to hyperventilate about Russia's jailing of the Pussy Riot for conducting an obscene performance inside an Orthodox church?

Pelle Neroth -- EU correspondent

Edited: 06 June 2016 at 09:07 PM by Pelle Neroth

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    Posted By: Pelle Neroth @ 06 June 2016 05:44 PM     General     Comments (0)  

Manipulation, Identity politics and the internet

26 May 2016 by Pelle Neroth

So, hmm, what is Europe up to these days, these weeks, in what may, if some polls are to be believed, be the last fading moments of the United Kingdom's full membership of the EU.

That is right. Requiring Netflix to produce more shows in French. Yep. The European commission is asking the video streaming services - of which Netflix is perhaps the best known - to carry a certain minimum proportion of European-produced content on their networks. Terrestrial networks in Europe already have to do that, so that US cultural imperialism doesn't get to reign supreme. So to level the playing field the eurocrats are asking the video streaming giants to do the same.

It is all part of the latest proposals for the Digital Single Market project. Netflix protests, saying it already produces locally based shows - never heard of their soap opera Marseille? - but resists being tied down by quotas and rules which, you know, Europe is good at - less good at the creative, innovative stuff. European lawmakers retort that Netflix's local commitment is pretty small: only one percent of their annual revenue is spent on local content. Only rules and regulations will get Netflix to man up and meet its European cultural responsibilities.

I sometimes wish the European parliament would grabble with the big ideas, rather than just playing the lilliputians tying down the American technological Gulliver all the time. For instance, I love the idea - which I saw recently - that the young are being stupidified by consumerism delivered through their smartphones under the noble pretence of identity politics.

The argument, briefly goes like this. Why do western Europe's young (and not so young, as I shall explain) hate Putin? Because the media have persuaded them that Putin's Russia is anti-gay. (Homosexuality is legal; promotion of homosexuality to the young is illegal. While there are gay clubs everywhere in Russia, it is probably fair to say the climate is less permissive towards gays than in Western Europe.
Mind you, there are differences between urban and rural western Europe.)

But how committed is this "hatred"; will it make a difference to the gays in question, or is it only about burnishing one's identity as a good person, with the "right-on views". To express your disapproval of Putrin's Russia you rebadge your facebook identity in rainbow colours according to a template (helpfully provided by Facebook itself) and suddenly you get lots of likes. Politics is the personal, it is no longer aboout going out in the world - and we have technology to blame for that, as social media offers all the tools of a massive identity construction project for the self.

We are moving into an increasingly retarded era of human maturation where the process of identity formation - once a feature of your teens - becomes a continuous process, lasting into your forties, and driven by product and ideas consumption, where suggestions for expansion of that identity is helpfully suggested by product placements on Google and Facebook, free for you to like and buy. (Often determined by the nature or your friends and history of previous likes.)

These cost free signals of virtue - always left-liberal for some reason - for the garnering of "likes"are effortless, egostical and, as said, incredibly adolescent.

They don't require intellectual and emotional engagement, or understanding, and that makes today's Facebook-addicted Europeans supremely manipulable on issues of huge political import. Anyone who knows anything about the Ukraine crisis, for instance, realises the truth is more complex than blackhatted (an supposedly "anti-gay") Russians versus the freedom loving Ukrainians.

Big business is behind it of course: Facebook is not a charity. You sell your data in return for the service Facebook provides. What is interesting is how the social movements of the sixties were coopted by capitalism when the corporations realised they could transmute the burgeoning individualism of that era (after the post war conformism of the fifties) into consumerist egotism. The young stopped wrecking the social order; instead they were encouraged to turn their energies into a narcissistic pursuit of the self. The corporations scoop up pseudo dissent and presented it as yet another consumer choice. You didn't achieve change, you bought an item of clothing that provided a simulacrum of rebellion.

Threats to freedom are now seen as something intensely personal, and the smart phone is a medium that heightens that intensity - that connection. Huge, real inequalities exist in our world. But it seems significant that Putin could be "nailed" on the homosexuality issue, as many of the identities the modern young adopt at will and associate with freedom - through the internet - are sexuality based. The real result is synthetic emotion - righteous hatred of non left liberal views - stupidification, and ultimately disenfranchisement of the young.

I wonder if the US intelligence services plan these internet mobilisation campaigns? In summary, I think focusing on Netflix production quotas by the European commission/parliament is a very downstream solution to the deculturalisation (Americanisation?) of Europe's youth.

Pelle Neroth -- EU correspondent

Edited: 26 May 2016 at 04:22 PM by Pelle Neroth

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    Posted By: Pelle Neroth @ 26 May 2016 04:15 PM     General     Comments (0)  

Is the auto industry too pessimistic about the future of electric cars?

23 May 2016 by Pelle Neroth

The EU demands a 30% cut in CO2 transport emissions by 2030. The question is, how to get there?

The European car industry proposes more of the same - incremental improvements to current petrol car technology. Brussels's green lobbyists, predictably, claims that the European car industry's raft of proposed measures, outlined in a recent study*, will hamper take up of their favoured transport mode of the near future, electric cars.

The electric car certainly seems to be on a roll at the moment. Elon Musk, the busy Canadian-American entrepreneur, founder of PayPal and whose other projects include a space company with ambitious plans to eventually colonise Mars, is perhaps best known for Tesla Motors, the company which produces sexy and fast all-electric cars.

He has really put the electric car on people's mental map, thanks to favourable media coverage. A recently announced model, the sleek, 215 mile range Tesla 3, expected to cost around 30,000 pounds, is already nudging 400,000 pre-orders. Hundreds of customers queuing up outside car dealerships to make their pre-orders suggests the kind of buzz we normally associate with Apple's products.

Musk's "competitor" to the BMW3 series and Jaguar XE will arrive on the European market in late 2017 - availability, given the huge waiting lists, may be a problem.

European governments are doing their bit, too, for the electric car. In Germany, it has just been announced that car buyers will receive a 4,000 euro rebate when they buy an all electric vhicle, the cost shared between the taxpayer and the carmakers. Norway grants electric car buyers free parking and an exemption from VAT and purchase taxes.

Jumping on the bandwagon, the lower house of the Dutch parliament has just passed a motion banning the sales of diesel and electric cars from 2025. The motion has to be passed by the Dutch senate to be legally binding, but gives a clear indication of where the Netherlands, known for spearheading environmental innovation, wishes to go.

A consortium of companies from the car and oil industries - including VW, Toyota, Shell and BMW - argues, however, in a recent report, that a series of "low cost improvements" in areas "where there is already high customer acceptance" is the way forward in the medium term.

The measures they propose include further optimisation of engines and power trains plus a higher biofuel proportion in the petrol and diesel sold at the pumps. With this raft of measures, the report says, the 30% target can be achieved; and, unlike electric cars, their measures are not a pie in the sky.

The report has been dismissed as "finding what the car industry wanted it to find" by green campaigners - and there is a controversy about biofuels' greenhouse gas emissions - but, on insufficient take up of electric cars, the industry surely has a point.

Despite the buzz, electric cars only make up fewer than 50,000 of Germany's car fleet of 45 million cars, around 0.1%. (Hence the subsidies.) The availability of charging points is perhaps the biggest problem: for instance, there are only 70 Tesla supercharging points in the British Isles at the moment, of which one in the Scottish highlands, two in Wales, none in Ireland. Tesla owners who want to have their "car advert" experience, zooming along the moors at sunset, will have to plan their journey meticulously if they are not to run out of juice in the shadow of Ben Nevis.

The car industry reckons Europe will need about five million charging points before consumers start switching to electric cars en masse.

It is a question, in part, of chicken and the egg, though, isn't it? Should the car industry lead the way or just be satisfied with the "realist" approach? Another recent report, by the Lux Consultancy, awards the car industry "failing grades" in the electrification of its car fleets. This report lambasts industry's failure to present consumers with affordable cars that can drive 200 miles between charges - which, in context, makes even the upmarket Tesla 3's 215 mile range impressive.

* "Integrated Fuels and Vehicles Roadmap to 2030+", Roland Berger Consultancy

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 23 May 2016 08:33 AM     General     Comments (1)  

Why don't our masters want transparency over EU-US environment and trade deal?

17 May 2016 by Pelle Neroth

Supporters of TTIP - the Transatlantic Trade and Investment Partnership - have called it an "Economic NATO".

Yes, well. The statement was meant to give a boost to the idea of closer US-EU economic ties and takes as given the idea that NATO is a good thing. (And took as given that his audience, the European public, would automatically think so too.) While TTIP is ostensibly about reducing non tariff barriers to trade between the Europe and US, adding tens of billions of Europe's GDP - claims the European Commission -- there are many Europeans who actually see NATO as an instrument of American control over Europe.

So a statement meant to boost the standing of a disputed trade partnership in the works may actually serve to undermine it further: 70% of Germans in a poll are against TTIP. If TTIP hasn't been a feature of the British debate it may be, as the leftish Independent newspaper put it, "because you are not meant to have heard of it".

If you ever wanted ammunition for the idea of the EU as a remote, undemocratic playground for corporate lobbies, TTIP is it. It is pretty widely believed that the upwards shift in power from national parliaments to the European parliament in the past three decades has been detrimental to democracy. There is no European demos, no European political arena, no European media. MEPs work in a bubble heavily influenced by business lobbies with deep pockets and dedicated public relations people.

So it is with TTIP, decided in Brussels. Actually, it is worse than that. Regarding many political issues decided at a European level, MEPs can turn around at their sceptic detractors and say that the debate goes on in public and can be influenced by the public - only you have to pay attention to what happens in Brussels to be part of it. British newspapers could start by upgrading the freelancers eking out a living by reporting from grey Brussels committee rooms to full-time correspondent status.

They have a point. They public can engage, but don't, and there are various reasons for that. But in the case of TTIP, not even that is true: it has all been totally untransparent.

MEPs are allowed to read the negotiation texts, but they are not allowed to circulate them, take them home, digest the material at leisure, try to work out what is important to their publics among all the bureaucratic language. (Some MEPs are actually quite conscientious.)

This is the procedure: MEPs are only allow consult to TTIP negotiation documents in a secret room on the fourth floor of the Paul Henri Spaak building of the European Parliament. They are not allowed to take a mobile phone or a camera. They are allowed to write notes by hand, but they are not allowed to quote from the text verbatim. And what a big and complex text it is. How can such an environment be conducive to serving the interests of the European publics? Few MEPs have photographic memories.

To rectify the lack of transparency, someone, somewhere has actually leaked the documents to Greenpeace in the Netherlands. Having studied the latest proposals as they stand, Greenpeace finds they show a lack of concern for the environment. The EU applies the precautionary principle to environmental issues: in other words, the producer has to show a chemical product is safe before he is allowed to start marketing it. In the United States, the opposite principle applies: a chemical is first introduced to market, and then it is up to the Environmental Protection Agency to show the product is dangerous.

The problem is that the dangerous effects of some chemicals only take 20-30 years to show up. In the cosmetics field, the EU has banned 1,300 chemicals with reference to the precautionary principle, while the US has banned only a few at the federal level. If American lawmaking imposes itself on Europe, the whole precautionary principle will be in danger, say Greenpeace.

I know some people in the Shires harrumph and say this is typical EU red-tape socialism. But think about this. Public health standards are hard to measure, but it is not immediately obvious that the American model is the one to follow here: According to Wikipedia, male lifespans in the US are several years below West European countries. (76 compared to 79 or 80 in much of Western Europe.) A fascinating public health report published by the Credit Suisse Research institute shows that Americans were the tallest people in the world in 1945. Now even the Italians have caught up with average American heights, and Americans are actually shorter today than they were in 1945. Taking heights as a very rough proxy for public health - the murder rate is not that huge in the US - what does that tell you?

A second concern is that TTIP may facilitate exports to Europe of the relatively dirty American fossil fuels extracted from tar sands and shale gas. A third worry is that new EU environmental legislation will be drawn up only after transatlantic consultation if TTIP is passed. A fourth concern is the opportunities in the new treaty for corporations to sue states, if new legislation is seen as threatening a corporation's investments. The latter is a very loosely worded law that could give a field day to international lawyers and, warns Greenpeace, could end up costing a lot of taxpayers' money in compensation, while further weakening democratic nation states' ability to look after their populations. (The EU is also part of the problem here, of course.)

The philosophical essence of the case for Brexit is really about matters of sovereignty and self determination. Many people feel disenfranchised as the centre of power in matters concerning their daily lives has shifted to Brussels, away from the national parliament which they are familiar with. But Brussels is not the only alternative centre of power; you also have the more diffused control residing in the international corporate and financial system, which is harder to put one's finger on - and here Brussels, isolated from national publics, sadly plays an enabling role.

The EU is not antagonistic to international corporations (often American) but their facilitator. Both, working together, impinge on national democracies. But that link is not really being made in Britain, perhaps because anti-European conservatism remains firmly wedded to the Atlantic as well as corporate connection, at all costs.

Pelle Neroth -- EU correspondent

Edited: 17 May 2016 at 09:52 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 17 May 2016 09:45 AM     General     Comments (0)  

Will Saudi's technology plan for 2030 ease migrant pressure on Europe?

8 May 2016 by Pelle Neroth

There are several Saudi Arabias. There is the comfortable expat one, based in the foreigners' compounds, family-oriented, headscarf-free, pleasant and an experience described by one British engineering expatriate as "bit like living in a conservative American suburb without the alcohol".

There are pools and maids and high expat salaries. This engineer said: "It is extremely comfortable, but also boring and you can't bear it for more than five it to pay off your mortgage or student loan back home." Eighty-five percent of the country's 200,000 engineers are expatriates; British, American, Dutch, Egyptian, Filipino, what have you.

There is the privileged, occasionally louche, double standards Saudi Arabia of the expansive royal family. Then there is the strict Saudi Arabia of the Madrasas.

There is also the Saudi Arabia that angers human rights activists and foreign policy analysts, whipping outspoken bloggers at home and sponsoring political disruption abroad.

A country which sponsors its extreme version of Islam by funding mosques in Europe and beyond. A country that has latterly even been in the sights of US Congress for its potential links to the 911 attacks.

Is there yet another Saudi Arabia on horizon, though? if a recent government prospectus is to be believed, the country is set upon becoming some kind of benign Norway of the Middle East: a positive departure indeed: the plan just launched by the Saudi governments posits a technologically savvy, innovation-oriented Saudi Arabia, preserving its oil wealth for a rainy day in a gigantic sovereign wealth fund.

A country set upon becoming independent of its oil wealth and developing its own manufacturing industries, importantly a domestic defence industry.

A country whose population has expanded from 3 million to 31 million in the course of a few decades and has woken up to smell the coffee: a country that can't continue going down the easy route of exclusively living off the black gold that spouts out of the ground.

Different Saudi Arabias

Saudi Arabia is a complicated place; like all countries are really, containing a multitude of realities, depending on where you stand. It's not a country where camels walk the streets or women are forced to wear full covering with a slit for the eyes on pain of violent punishment. (Although it is true they are not allowed drive motor vehicles.)

Expatriates, putting a positive of a spin on the country of their daily experience, describe a family-oriented country with freeways and air conditioned shopping centres and endless fast food restaurants, where white women can go with their heads uncovered and the morality police are unobtrusive, mostly making sure that shops are closed for prayer times.

It is also country that has been one of the West's closest allies since President Roosevelt struck a deal with King Saud at Bitter Lake in 1945. Keeping the US and UK arms industries afloat with gigantic arms purchases - remember the Al-Yamamah deal in 1985? - and keeping the world's largest oil reserves out of the hands of Arab nationalists and into the petrol tanks of the West's consumers.

This alliance has arguably made the West look the way at some of the problematic aspects of the way Saudi has spent its enormous oil wealth over the years. (Apart from spending it on an advanced welfare state for its indigenous population, a project that has become ever less affordable as the population has expanded.)

A 2013 report for the Foreign Affairs committee of the European Parliament doesn't mince words, "Saudi Arabia has been a major source of financing of rebel and terrorist organisations since the 1970s."

It adds: "Since the invasion of Afghanistan by the Soviet Union, Saudi Arabia and Saudi-based private actors (i.e. wealthy businessmen, bankers, charitable organisations ) have been providing financial and relief assistance to Muslim communities affected by natural calamities or conflicts."

The conduits have been organisations with names like the Islamic International Relief Organisation (IIRO), the Al Haramain Foundation, the Medical Emergency Relief Charity (MERC) and the World Assembly of Muslim Youth (WAMY).

Does that sound benign? About 20% of the $10 billion spent, however, says the European parliament report, has been diverted into terrorist activities for organisations such as Al Qaeda, the Haqqani network and Jemaah Islamiyah. That was because senior posts in these charities were occupied by the senior lieutenants belonging to the terrorist organisations, with the foreknowledge of the Saudi donors.

Bin Laden connection

The Soviet invasion of Afghanistan in 1979 could be considered the starting point for Saudi financing for Sunni Muslims pursuing political or religious goals consonant with Wahhabism, the strict variant of Islam that prevails in Saudi Arabia.

That the Soviet invasion of Afghanistan was opposed by the Saudis because the "godless" Soviets had occupied it is a well known fact of Cold War history; the CIA and Saudis (and the military regime of Pakistan) worked together on this one.

They supplied money and weapons to the Mujahedeen and drove the Soviets out of the country, helping to break the Soviets' self confidence by creating, as American policy-makers put it gleefully, a "Soviet Vietnam".

Osama Bin Laden, whose career began opposing the Soviets in Afghanistan, was one of the beneficiaries of Saudi largesse when building up his own terrorist army, initially aimed against the Soviets in Afghanistan: a Saudi national himself, he relied on a network of Saudi and Gulf Arab sponsors known as the Golden Chain.

Christopher Blanchard, a terrorism expert quoted by the European parliament report, argues that Al Qaeda's financing activities: "were facilitated in part [...] by the "extreme religious views" that exist within Saudi Arabia and the fact that "until recently" Saudi charities were "subject to very limited oversight.".

Inasmuch as this was supported by the Saudi leadership, the Saudis may have been motivated by as much by defensive as offensive motives: to distract attention from what the country's religious right thought was the unacceptably louche behaviour of a Saudi Royal Family that had an important role as guardian of the holiest sites in Islam.

Sponsorship of defeating external enemies gave the Saudi religious right something else to focus on. When Bin Laden, who thought the Americans were as godless and morally corrupt as the Soviets, and resented American military presence in Saudi Arabia, bombed the Twin Towers in 2001, it was called the biggest blowback in modern history. A blow ack is a covert operation - in this case US/Saudi support of the Mujahedeen and Saudi support for Bin Laden- in another part of the world that comes back at you.

The Saudis got off scot-free. Instead, Iraq's Saddam Hussein, who was evil in a different way but who had nothing to do with 911 and nothing to do with Islamic extremism - indeed opposed it - took the hit, as we all know. The American public bought the Bush propaganda.

The confusion created in the public's minds that Saddam was somehow responsible is indicated by polls showing after the Iraq war that half the American public believed Saddam was behind 911. Well, he wasn't.

As if the Bin Laden link was not damaging enough, Saudi Arabia has, more recently, been accused of having links with ISIS. Although experts such as Lori Plotkin Boghardt for the Washington Institute for Near East policy states that there is "no credible evidence that the Saudi government is financially supporting ISIS", she argues that "Saudi citizens represent a significant funding source for Sunni groups. She writes that "Arab Gulf donors as a whole -- of which Saudis are believed to be the most charitable -- have funnelled hundreds of millions of dollars to Syria in recent years, including to ISIS and other groups.

"There is support for ISIS in Saudi Arabia, and the group directly targets Saudis with fund-raising campaigns."

And she is critical of the Saudi government's failure to do enough to curtail donations; the donations are often channelled through Kuwait, where rules for these things are laxer. The donations have become less important in the last 18 months as ISIS has acquired other funding sources, such as oil, antiquities and arms smuggling. But Saudi private donations were important in the beginning.

What was the motive this time? It is not so well known among the Western Publics that many Sunnis - where Saudi Wahhabism is an extreme variant - are extremely hostile to the Shia variant of Islam, which has around 100 million followers, mainly in Iran and Iraq, but also in Lebanon and Syria. Many Sunnis, especially Saudis, regard Shia Muslims as non Muslim apostates and polytheists.

'God help the Shia'

British journalist Patrick Cockburn - one of Britain's best informed Middle East experts - recalls a conversation he had with Richard Dearlove, former chief of MI6 and now master of Pembroke College, Cambridge, some years ago, he recalled recently. Drawing on past experience, Dearlove said Saudi strategic thinking was shaped by two deep seated attitudes: one was that there was no admissible or legitimate challenge to Wahhabi credentials as guardians of Islam's holiest shrines. Secondly, the Saudi conviction that they had the monopoly on Islamic truth meant they were "deeply attracted towards any Islamic militancy which can effectively challenge Shiadom".

Dearlove recalled to Cockburn a chilling comment made to him by Prince Bandar, one of the Saudi regime's leading figures and long standing ambassador to Washington ( and friend of the Bush family). Prince Bandar told the then MI6 chief: "The time is not far off in the Middle East, Richard, when it will be literally 'God help the Shia'. More than a billion Sunnis have simply had enough of them." That loathing could explain why the Saudi soldiers put down a Shia uprising in neighbouring Bahrain in 2011 - with nary a protest from the West, incidentally

What has this got to do with ISIS? One of the unintended consequences of the Iraq war was the rise of the long-oppressed Shia majority in that country and the dethronement of the Sunni minority that was Saddam's powerbase; the Saudis were happy to Saddam go but very unhappy with the Shia rise to power. The Sunnis had made up just 20% of Iraq's population but dominated the military and the higher echelon's of Saddam's Baath party. The new Shia dominated Iraq was friendly with Shia Iran and Saudi Arabia hated this.
The "Arab Spring" democracy uprising in Syria in 2011 was Sunni in character and, peaceful in the very early stages, but was quickly hijacked by jihadists, who were often sponsored by Saudi Arabia and Qatar. Reason? Assad's regime was allied with Shia Iran and newly Shia-ruled Iraq was friendly and Syria's Shias had a better deal than the country's Sunnis from the Assad.

Soon, the Sunni Jihadist uprising spilled over into the parts of Iraq were the now oppressed Sunnis were numerous. Out of this grew ISIS, which today dominates swathes of Syria and Iraq and which shocks global opinion with its truly gruesome violence; while the Saudi regime is intensely aware of the danger of blowback - and some commentators say, fear ISIS as much as the West does, it does not, as said, do enough to curtail private citizens and organisations from supporting ISIS. The Saudi government does its bit by maintaining a climate of negative opinion towards everything Shia and therefore Assad and his Iranian ally.

Some commentators believe that ISIS's growth has also been facilitated by American passivity towards ISIS on account of their Saudi ally's ambiguous relationship with the movement. The Americans, who were hostile to Assad on account of human rights abuses, set much store in the "moderate Assad opponents" and supplied something called the "Free Syrian Army" with arms. However experts now believe there is no such thing as a moderate Syrian opposition, that it was just a fiction and that the American weapons merely end up with ISIS or its affiliates. Another foreign policy own goal.

Washington vs Saudi

There seems to be a growing realisation of this now in Washington, where opinion is more sceptical of the Saudis than in many a year. Obama has been cool on the Saudis and it can sometimes be heard pointed out in the corridors of the White House, according to journalists, that 15 of the 19 911 hi jackers were after all Saudis - not Iranian or Iraqi. More worryingly for the Saudis than even Obama's scepticism - they hope to wait him out - is a bill before Congress, which, note this, has bipartisan support, which would allow the Saudis to be held responsible for individual Saudis' role in the 911 attacks. Obama, despite his cool relations with the Kingdom, has appealed against the bill, citing the potential of diplomatic complications. The Saudis have threatened to sell an astonishing 750 billion dollars' worth of US treasury bills if the proposal goes ahead, citing fears that their US assets could be frozen to pay compensation if they don't sell them quickly. It would be a blow to the US economy.

So all this is the context to Saudi Arabia's Vision 2030 technology plan. Is Saudi diversifying out of fear of the cooling of the American connection, or would they have reformed anyway? Middle East commentators such as Patrick Cockburn are sceptical of the royal family's vision of "getting the Saudi people down to work, starting their own businesses and working in their own factories", noting that other Middle Eastern regimes had tried top down technology-oriented reform and failed; the Shah in Iran in the 1970s being one example. Iraq being another: Saddam made a brief effort to diversify into the non-oil economy with factories and irrigation schemes, but the debris of that can still be seen outside Baghdad.

One can only wish the Saudis will buck the trend, though can one not? The project, which will start with the progressive privatization of Aramco, the national all company on which all Saudi prosperity depends, may even lead to less meddling in other countries' affairs, if the Saudis are engaged in building prosperity the hard way: education, training, manufacturing, modern society-building. The Saudi-backed Sunni conflict against the Shia - whose extreme manifestation is ISIS - is undoubtedly one of the factors that has sent streams of refugees into Europe, the great crisis of this moment for the EU.

Pelle Neroth -- EU correspondent

Edited: 08 May 2016 at 10:25 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 08 May 2016 10:13 AM     General     Comments (0)  

Should we take UK tech firms' Brexit threat seriously?

29 April 2016 by Pelle Neroth

There is a certain deja vu about international businesses threatening to abandon Britain if the UK votes to leave the EU. In a poll for the members-only fintech (financial technology) association Innovate Finance, 82% of firms said they wanted the UK remain in the EU. In another survey, conducted by Reuters, 7 out of 10 tech companies contacted said they would consider leaving the UK if Brexit took place.

Scary stuff. But let me put on my EU news sceptic (as opposed to merely eurosceptic) glasses. Seven out of ten is a meaty headline from a respected news organisation; maybe it will even make Boris Johnson and George Osborne take an extra large gulp of their morning coffee as the implications of that survey register on their eurosceptic retinas.

London's attractiveness as a fintech destination has been one of the feathers in Boris's cap. As London mayor, he has stuck his neck out on the immigration issue as he believes a large, multinational talent pool is what has made London prosper in this new field of technological innovation, fintech. (At a time when some Brits have been wondering why the UK has never come up with a global consumer game changer like Skype, Amazon or Facebook.)

Open borders, a friendly investment climate, a deep pool of financial expertise that comes from London being Europe's financial capital; all this has helped the UK's fintech sector become the largest in the world, earning last year, nearly 7 billion pounds in revenue, and beating New York and California into second and third place.

Several European fintech companies have relocated to London to mature their business there, Estonia-founded Transferwise being one example. (Transferwise aims to make international money transfers cheaper, a great boon to travellers and removing a ludicrously lucrative source of income from the banks.) About a quarter of the lobby group Innovate Finance's members are run by chief executives from other countries.

There are loads of homegrown fintech entrepreneurs that have flourished in London too, including GoCardless, a company set up by a group of young Oxford graduates that allows any individual or small retailer to set himself up as a direct debit recipient for a very low fee.

At the same time as Boris Johnson has been proud to preside over this success, he has also perhaps the most well known politician to place himself in the leave EU camp. He is worried, presumably, like many of us, about the democratic deficit in the EU: lawmaking by unelected European judges from post-totalitarian countries in combination with puffed up MEPs none of us have ever heard of. Many of us also carry resentments from the way the European Community's rules developed in the 1960s and early 70s with the rules stacked against British interests - usually by the French - before Britain was allowed to join. How to balance the heart and the head? His spokesman refused to comment on the Reuters story.

At the same time, European commission sources are indicating to selected Brussels journalists that Europe's two heavyweights, Germany and France, are ready to put the thumbscrews on the UK the day after the vote, if the "No" side wins. "Britain would be cut adrift without any preferential relationship with its biggest trade partner" warn aforementioned sources.

If Britain chooses to stay in the EU, a small task force in the Commission headed by perhaps the most senior British official still on the Brussels ship, Jonathan Faull, will be implementing the (relatively modest) changes agreed between Cameron and Brussels earlier this year as part of Britain's rebooted relationship with the EU

If Britain votes to leave, Faull's little group will be dismantled, obviously, and a new UK leave team, comprising French and German officials, will negotiate the details of the divorce. A quick and brutal divorce, the sources promise. Since Team Cameron's hands are tied - the outcome, exit, being known - the upper hand will be held by the Continentals. And they will play hardball with the British, not least to forestall any other EU member states from being tempted to head for the "out" doors That is the message the Commission wants to get across.

Despite the scaremongering, from both a British business and a European commission direction, polls suggest the yeas and nays are evenly balanced among Brits at large. A YouGov poll published yesterday showed a virtual dead heat, 42% of Brits want to leave the EU, ie would vote for Brexit on 23 June, 41% to stay in.

It is worth observing that the "wisdom of the crowds" was right when it came to the euro issue, 10 or 15 years ago.. Back then, the British business community was urging, with a nearly unanimous voice, that Britain join the single currency project. There were dire warnings about the damage to the British economy and threats by financial firms to quit London for Frankfurt and Paris. In contrast, the British public, polls showed, were against the euro. In the UK, Gordon Brown, then Chancellor of the Exchequer, made the decision, surely cognisant of public opinion, to stay out. Blair had wanted to join.

Sweden, unlike Britain, actually had a referendum on the issue: the Swedish public voted against the euro, in this case once again contra the wishes of its political and business elite. Both Britain and Sweden have flourished outside the euro, and the City of London hasn't been harmed at all, while countries inside the Euro, such as Greece and Italy, have been hamstrung by an inability to devalue to remain competitive visavis Germany. Unemployment in these countries is very high.

The "seven out of ten" threat to leave the UK figure should perhaps not be taken too seriously, either: it apparently means literally seven out of the ten companies contacted.

Those ten, needless to say, may not have been a representative sample. Coverage elsewhere suggests that some London tech companies are unhappy with the commission's digital legislation proposals.

Property Partner, a London-based crowd-funding platform that allows people to buy shares in individual properties for as little as 50 pounds, was recently touted by KPMG as a top 50 emerging Fintech company. The company seems to be on to a good idea: for an investment they can afford, it enables the young and not-so-rich to keep up with rising property prices instead of falling behind.

The company's chief executive, Dan Ganesha, is complaining that the Commission is mulling proposals to strangle the likes of his company in so much red tape it will hardly be worth it. The chief executive said that he recognises the advantages of being part of a single market of 500 million consumers, and realises the UK will have no influence over EU policy if it stays out.

On the other hand, he chides the EU for misjudgments like the one that threatens tro hamper his business which explains why Europe's economy "is in such deep trouble". That ambivalence paints a better picture of the truth about the EU than alarmist headlines about the number of tech companies who think leaving the EU is so insane they are mooting relocating to the Continent.

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 29 April 2016 01:01 PM     General     Comments (0)  

EU leaders to discuss Bitcoin's future

21 April 2016 by Pelle Neroth

European leaders may propose legislative measures when they meet in June against Bitcoin, the virtual currency that allows the transfer of assets worldwide instantaneously.

Also in the EU's sights is virtual wallets, apps that allow you to "pay by mobile phone", as well prepaid cards - real Visa and Mastercard plastic that can be preloaded with money and is not linked to any current account.

The Brussels terrorist attacks in March, which killed 32, and the Paris attacks in November 2015, where 137 people died, have created an atmosphere in which the EU has to be seen to be doing "what it can" against the way terrorists fund their activities under the radar of the surveillance state.

The attackers in Paris reportedly funded their hotel bills by the use of prepaid cards, and ISIS have reportedly amassed anonymous donations in Bitcoin worth the equivalent of three million US dollars. The latter information courtesy of an anonymous group of hackers called the Ghost Security Collective.

However, the Bitcoin community is likely to resist what it fears may be badly thought out legislative proposals from politicians who do not understand the technology and have made contacts with the European Parliament to help them do so. In the past, the European Parliament has often been charmed by young geek lobbyists from the tech community, and has taken on board their worldview.

At a hearing in January, MEPs expressed their sympathy for Bitcoin activists' argument that monitoring of the situation was better than legislation. The European Parliament is in a position to veto any anti-Bitcoin proposals coming from European leaders.

In its case, the Bitcoin community wished to point out it that, actually, Bitcoin transactions are not anonymous. It is true that you can instantly send Bitcoins around the world at almost no cost, without intermediaries who could halt the transaction.

However, Bitcoin was very unsuitable for funding terrorism for two reasons: while there is no direct link to a person's identity in a Bitcoin transaction, every transaction is recorded in a public ledger called a blockchain, which cannot be deleted or undone. Unless an operator - a would-be terrorist funder - is very skilled at using anonymising technology, anti ISIS hackers could without much effort link a transaction to the operator's IP address.

Informal groupings of self-styled vigilante hackers from around the world are already working 24/7 on a volunteer basis to "out" ISIS's Twitter accounts - used to spread terror propaganda - and claims that thousands have been closed so far. It is part of a "battle" to drive ISIS off the public internet into the "dark web", the parts of the web that require specific browsing software to access, which makes it harder for ISIS to reach out to would-be recruits. EU government law enforcement authorities are, of course, also monitoring ISIS's online activities - and funding flows.

The other reason why Bitcoin is not suitable for terrorist funding, activists say, is that, in the absence of a Bitcoin infrastructure in ISIS territories in Iraq and Syria, Bitcoin still has to be swapped for real money at some point and moved into the territories controlled by ISIS. Money thus realised would be "a traditional currency interacting with all the traditional banking systems" and "subject to government regulation and oversight".

Looking at Bitcoin legislation, you have to look at the bigger political context: Europol, the EU's law enforcement coordination agency, says that, in contrast to the Ghost Hackers' claims, ISIS have not used Bitcoin to any great extent.

Even if the three million dollar Bitcoin account exists, it has to be compared to ISIS's main source of income, the $100m worth of oil smuggled through Turkey and sold on world markets every month - with the acquiescence of Turkish officials at what level?

Turkey, Europe's NATO ally, which has just signed an agreement with Europe for visa free travel starting in June. You can also ask questions about the political support that has allowed ISIS to flourish in the first place, not only from Turkey but Saudi Arabia, a close US ally.

The US has come under criticism for seemingly failing to destroy these ISIS oil convoys. Of course, these are extremely difficult questions of high politics. The upshot of the activists seems to be: don't just pick on Bitcoin because it seems an easier target.

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 21 April 2016 01:19 PM     General     Comments (0)  

What is it all about anyway? asks the Philosophy of Technology

15 April 2016 by Pelle Neroth

Is the Philosophy of Engineering a worthwhile subject?

I have just been leafing through a couple of back issues of the technology journal Techne, published in English but whose contributors have a heavy bias from Europe, from the Netherlands for some reason.

Techne is derived from the ancient Greek and is often translated as "craftsmanship", "craft" or "art". For the Greeks, it meant all the mechanical arts, including medicine and music. According to the Stanford Encyclopedia of Philosophy, Techne was concrete, contingent and connected to everyday things, and often related to the practical activities carried out by slaves.

In contrast, free men concerned themselves either with the truths of the Cosmos - which were a priori and eternal, they then thought, in contrast to the contingent nature of everyday practical issues - or the noble causes of politics and ethics.

Sometimes, though, when the Greek gentleman exercised practical skills, he brought a higher order awareness to it. He understood the theoretical basis for it; he combined episteme, knowledge, with practice of techne. The distinction between a slave doctor and a free doctor was that only the free doctor had the ability to give an account of his doings.

The slave doctor relied on experience but could not explain what he was doing. (According to one account of Plato's understanding of techne.) While the free doctor's understanding of the theoretical basis of what he was doing carried the advantage that he could explain his activity and consequently elicit cooperation from his patient.

This suggests that it is better to have some higher second order awareness: having a theoretical knowledge of what you are doing, knowledge "of" rather than just knowledge "that". (It is unfortunate, incidentally, that the English language does not have verbs to distinguish between knowledge of and knowledge that, as some European languages do. Spanish has saber and poder, French savoir and pouvoir.)

Engineers didn't exist in Plato's day, but would it be fair to say that some of the practical and theoretical distinction exists between the technician and the engineer in today's terminology? The engineer is supposed to be in possession of a kind of theoretical self-awareness?

Anyway, in my reading that is what the journal Techne sets out to do, to furnish a body of abstract reasoning about the profession itself. Many educated people today have heard of the existence of a Philosophy of Science and a Philosophy of Politics. Even more aware people know that the Natural Sciences were called Natural Philosophy for a long time. The two still exist side by side, in a kind of mutual relationship.

From what I can determine, the rule seemed to be that when a topic can be quantified, defined and used instrumentally, it moves over from the area of philosophy to the area of science. (The Philosophy of Science also contains some areas that will never be reducible to mere numbers.) As we have moved from Davis Hume's and John Locke's day, as science has grown, mystery has shrunk, Natural Philosophy has shrunk. In that line of thinking, Natural Philosophy is a kind of pot-luck box of inchoate ideas, some of which make it over to the more concrete field of Science when new instrumentation is invented to measure it (among other things.) In other words, philosophy is both vague and self referential.

While the philosophies of Science and Politics are quite well known concepts, then, I would wager that hardly anyone has heard of the Philosophy of Technology, a kind of philosophy of particular interest to engineers. Perusing the journal Techne was therefore an interesting experience.

One very interesting issue of the journal was devoted to safety questions. Of course safety concerns are a very important to engineers, and I understood the article that explained that safety was maximised when you had as many independent safety barriers as possible; when you built considerable redundancy into safety margins. And then there was a discussion about to what extent, when designing bridges for instance, do engineers have a responsibility to guard against "stupid user behaviour"? And what about the responsibility to try and second guess potential future uses of a piece of technology that no current user would contemplate?

Another article spent several thousand words talking about the two space shuttle disasters, the Challenger in 1986 and the Columbia in 2003, and concluded that we needed to shift over from a culture of individual responsibility - which paradoxically means everyone is trying to shift responsibility to another individual - to a culture of collective responsibility. The writer called for the development of "civic virtue" to govern relations in an engineering organisation such as NASA. That would reduce the penalties of whistleblowing - ostracisation, delayed payrise, drawing attention to one's partial responsibility for a disaster - and help reduce the number of engineering accidents.

Pelle Neroth -- EU correspondent

Edited: 15 April 2016 at 09:29 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 15 April 2016 09:00 AM     General     Comments (0)  

Would closing borders necessarily be bad for Britain?

7 April 2016 by Pelle Neroth

Russ Shaw gives a good spiel. The founder and director of Tech London Advocates argues that nearly the entire London tech community favours staying in the EU.

Continuing skills shortages in "Europe's tech capital" is said to be the main problem companies face, and leaving the EU would deprive London tech firms from hiring Europe's best and brightest engineers. So they are firnly against Brexit.

He says things we all kind of know, and says it in a very compelling way. In a newspaper just recently he argued that there are some groups in the City that have nailed their colours to Boris Johnson's Brexit mast. Shaw writes in the business newspaper City AM that the tech industry is not one of them:

"One group that is almost unanimous in its desire to stay part of the European Union is London's tech community. A survey by Tech London Advocates published this month showed that 87 per cent of tech professionals are in favour of remaining in the EU, with only 3 per cent calling for a Brexit. More than seven in ten believe leaving would make it harder to reach EU customers, while about eight in ten believe it will make it harder to employ people from EU member states."

"The reason the digital community is so vocal in its support for EU membership is that Brexit would exacerbate many of the challenges the industry has worked so hard to overcome.

"The talent shortage is the single greatest threat to both the London and UK tech sectors. Technology is our fastest-growing industry and an important source of UK economic growth, but I regularly hear from London startups and scale-ups about the difficulty they have in filling roles in areas like data analytics, software development, product management and cyber-security," says Shaw, the director of London Tech Advocates.

Just a dissenting thought: isn't the ability to hire European staff off the shelf contributing to the fact that Britain doesn't develop its own domestic talent properly? Which is the chicken and which is the egg? Of course, skills shortages are a very complex problem. There are cultural issues - engineering is hard, and young people all want to work in TV, or whatever - political issues - the British school system is declining, according to the international PISA surveys. All the kinds of problems that require a complex diagnosis and take years, maybe decades to resolve. Which is not the kind of time you can spare if you're an extremely ambitious entrepreneur are set upon growing your first "unicorn". You'll take talent wherever you can get it, even if it has been nurtured by other countries' tax and public education systems. But really, it has to be addressed.

One of the more interesting glosses put by the Russian leadership against the sanctions imposed by Europe and the United States after the Ukraine conflict is that it will force Russia to develop domestic equivalents to the sectors affected. They have no choice; but there is the added argument that it may actually be beneficial. The lack of competition opens up a space for domestic sectors to be nurtured in isolation. Of course that argument is anathema to a generation, like me, schooled in the Thatcherite virtues of competition. But there are other historical comparisons. Nineteenth century United States and Germany grew industrial sectors that were ultimately able to take on mighty Victorian powerhouse Great Britain precisely because they abjured free trade, at least in the initial stages of that industry's development: behind trade walls, their sectors could grow without being outcompeted until they were strong enough to hold their own in global free markets. The belief that free trade has always been beneficial to all parties, a win-win situation, is I believe a mistaken one. Nineteenth century German consumers may have been short term losers from the closing of the market to British producers, but in the long term German producers, and therefore all members of German society, and consumers too, were the winners.

Here is something to think about, a thought experiment. If Britain closed its borders to all immigration, then the ferocious lobbying energy now devoted to keeping Britain in the EU might de diverted into ensuring more and better domestic talent comes on stream for tech firms to hire. Which might put pressure for better British policymaking in fields like education and science.

Of course there would be a short term price to pay, and maybe the "surging" London tech scene can't afford to lose a moment in the global race. But the thought experiment is worth conducting, is it not? The dislocation of lobbying forces away from the UK and to Brussels, away from the democratic debate, is one of the reasons British politics seems so anaemic and empty - to this semi-outsider, anyway. A Brexit leave vote might restore some of the vigour to British politics, and begin the big task of solving Britain's long term pressing social problems, for instance in education. London may be the tech capital of Europe and the fin tech capital of the world, with innovations humming along at a decent pace. But one thing the British tech scene hasn't been able to come up with is a world-changing technological invention. Now why is that? Why hasn't Britain in technology produced what in music, in a few short years in the late sixties, transformed and still dominates global fashions in popular music? Or is that not an appropriate parallel?

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 07 April 2016 09:47 AM     General     Comments (0)  

'Give the University back to the academics'

2 April 2016 by Pelle Neroth

I lived in London through the Blair years and had never heard of the actual phrase New Public Management until a few weeks ago.

Then I came across the term twice in rapid succession.

First I watched Adam Curtis's documentary the Trap. Adam Curtis is the BBC's favourite film maker. He is a geek and an intellectual and isn't afraid of tackling ideas through television. That is notoriously a hard thing to do. Have you ever counted the number of words in an average TV-script? Not many pages of A4 there. Visuals don't lend themselves easily to illustrating the abstract either, not in a profound way, anyway. Curtis manages it, though. He also seems to have been given privileged access to the entire BBC news archives. There is lots of footage therefore of 80s and 90s everyday scenes. Nostalgic and interesting.

Another name for New Public Management is target culture: starting with Thatcher, but picked up with enthusiasm by New Labour, target culture's attractive rationale was the idea of liberation of the individual from the tyranny of bureaucracy, by turning us from citizens into customers, first, and, second, making bureaucracy accountable and quantifiable by setting up numerical targets for them to achieve.

The idea was that the customer made decisions and that choice was a much more effective incentive to improvement of bureaucratic structures than the democratic process. Democracy is slow and diffuse; when you elect someone, you don't know what they will do when in office, especially when, according to New Public Management theory (and indeed the beliefs of your average cynic), politicians, once elected, they do their own thing, just working to boost their own careers, mainly.

Very few of us track local political issues. Therefore, if you, as the voter, want reform in a public body, the messaging process, by voting for a politician, the ability to get this across, is very imperfect. The market is much better for this kind of thing, the theory went: the customer walks away from a bad product or a bad commercial service, and that sends a clear and nearly instantaneous message. Turn the citizen into a customer and you get a better bureaucracy, that was the idea.

NPM flourished in the early 1990s when the Soviet Union provided an illustration of a totally discredited centralised, authoritarian command management society.

What Margaret Thatcher, John Major and later Tony Blair did was to provide choice in hospitals and schools; to help the customer along. Because capitalism only works with the informed customer, hospitals were given targets to hit and rated accordingly. The customer, the citizen, was given the tools to discriminate and allowed to choose. The improvement of the welfare state would come from below. Bad performers would wither on the vine.

What Curtis shows is that teachers, doctors and civil servants were annoyed in the crude system of targets, which they took as an attack on their integrity, their independence and their professional esprit de corps. Rather than reduce bureaucracy, it created a new layer of bureaucracy, the hospital manager, who learned how to game the system to hit those targets.

For instance, to cut average waiting lists, they would instruct surgeons to carry out easy to do operations, like vasectomies, as a priority. Many operations could be carried out in one day, and target rates could be hit. To hit the target of the number of patients "seen to", they would hire meet-and-greeters to handle patients in the waiting room; they would count as being "seen to", even if nothing was actually done.

Trolleys were reclassified as hospital beds by removing the wheels of trolleys of patients lying in corridors, and another target was hit. So long as there have been rules, people have found their way around them. And so on.

But did it really help the public, now reclassified as customers, with their list of hospitals and their targets achieved to choose from? Maybe not. The state of NHS compared to other health systems is an issue of constant controversy.

I have just been making a documentary, during which I came across New Public Management in another context. Swedish higher education. I have talked to a number of professors, both in the natural sciences and in the social sciences. The New Public Management reforms went even further in Sweden than elsewhere. The problem, I was told, is that - with the customer, the student - in charge, it made universities very vulnerable to their brand reputation. Which is a fickle thing. Just one or two free-spirited remarks on twitter, picked and amplified by the media, can put a professor in trouble.

Not good for academic self confidence or the integrity of academics. Freedom of speech is holy in an academic environment; it is what universities are about. It also turned students into kings, as customers, at a time of life when academic and even general judgement is not well developed, and subtly altered the power relationship between professors and students in a way that disadvantaged the former.

This was not good, either, for the concept of the university, which is institutionalisation of the ancient process of passing on wisdom from respected elders. There is constant pressure from vice chancellors on professors to pass weak students who didn't deserve a pass grade because "otherwise we will look bad in the statistics" and "we won't get any customers" - ie, students - "applying next year".

The squeezing of academic self confidence between market force oriented vice chancellors and degree result-oriented students has prompted academics to retaliate. A couple of senior professors have started a group called Academic Rights Watch Sweden, which aspires to restore the collegiate model of the university, which puts professors in the driving seat: with more influence over appointments, promotions (since they know who among their colleagues is really doing good research), to hit back at the culture of university branding and delivery by results.

What about Britain? "The situation is even worse," I was told. "We have many academics applying from the UK who are fleeing your country's university system." It would be interesting to explore that claim. It was clearly a second hand report, and the "fleeing academics" sound as if they have a bee in their bonnet. I haven't had the opportunity to talk to these exile academics yet.

Oxford and Cambridge are the top two universities in Europe in every ranking (QSS, Times, Shanghai). Imperial and UCL invariably in the top ten. So it can't be all bad in Old Blighty. But do these "refugee academics" have any point at all?

Pelle Neroth -- EU correspondent

Edited: 02 April 2016 at 10:45 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 02 April 2016 10:21 AM     General     Comments (0)  

In a time of European crisis, what can engineers practically do?

26 March 2016 by Pelle Neroth

The metro station in Brussels where 21 people died, Maalbeek, is one where I have passed through hundreds of times. The terror is getting closer.

Maalbeek - the very name sounds sinister to the English ear, doesn't it? - is one of two metro stations serving the EU quarter. It is where you get off if you're heading to the European parliament, about ten minutes' walk away. The EU quarter is a physically unattractive area. A grid of densely packed office blocks containing organisations all in some way connected to the EU's activities. From the European Association of Small Businesses to European Free Trade Organisation.

The EU quarter is bisected by two intensely busy roads where the traffic races through to the suburbs. At ground level near Maalbeek station, there is not much activity: people heading into their place of work, to their lobby group or think tank or EU directorate. There are a couple of sandwich bars where you can get a glass of Jupiler beer and a sandwich au fromage for a couple of euros. The elegant restaurants of eurosceptic lore where pampered MEPs dine on foie gras are situated elsewhere in the city.

From a casual glance of the published lists, I didn't know any of the victims. But I know the faces of Brussels commuters, know the people who work inside the EU machine - the secretaries, officials, press officers, security guards, handymen. They work for embassies, lobbying organisations, the European parliament and commission. They are, needless to say, innocent victims, and many (especially the handymen and security guards) are themselves of Middle Eastern origin. Brussels has a very large Arab population.

I know the rhythm of commuting in Brussels, intimately, so I can exactly imagine the scene. The bright red tiling of Maalbeek metro station, the eerie, ethereal canned music that plays on the platforms between the arrival of the trains. No lyrics to the music, ever: Brussels and Belgium, the capital of "united Europe" is an intensely divided city, in a country divided by two language communities, French-speaking and Dutch-speaking.

In Brussels, you see political correctness in spades on everything to do with language policy; even the music can't be allowed to take sides. Everything in Belgium is decentralised because of the conflicts between the country's two language communities, French and Dutch. That is why Belgium is dogged by weak central authority. That is why counter terrorism efforts are so weak in Belgium. That is why Belgium has been a base for terrorist attacks on neighbouring France, a much more top-down controlled, effectively policed country. Brussels alone has half a dozen police forces.

The Brussels attacks could be another nail in the coffin for the Schengen Agreement on passport free travel between EU states. The attacks just keep on piling up: Paris, twice last year, Copenhagen, now Brussels. It could push Britain yet another step towards the EU exit; we will have to see what the polls say. People usually vote against change, past referendums show that, in Britain and elsewhere. But we'll see: the Brexit vote in June could be different.

A visceral event like this overshadows developments elsewhere. There is supposed to have been a ceasefire in Syria. And the Germans have looked ahead, offering to train Syrians who will one day return home in practical and engineering skills. I wrote about it in this month's magazine.

If I may be forgiven for abruptly changing the subject: At the Munich Security Conference a few weeks ago, Germany's defence minister, Ursula von der Leyen, attempted to create a positive momentum for what the West can actually do about the migration crisis, on the assumption that the beginnings of a peace process may be taking shape."The migration pressure falls mainly on Europe," she said. "It will not disappear by itself. It requires a systemic response." And Europe, she said, had to take the lead.

She lamented the fact that Europe found itself on the back foot, in permanent humanitarian crisis mode, and the fact that 1.5 million individuals on the move, though large, has seemed to paralyse the political will of an entire rich continent. Worse, it is a crisis that has threatened to drive the EU apart, since the Schengen agreement of passport-free travel across the EU is danger of disintegrating. Reason: national leaders are scared of large refugee inflows on their patch.

Germany has been the biggest generous exception, but Ms von der Leyen indicated there were limits even to German openness. The open doors policy that has seen over a million migrants into Germany in the past 12 months has put huge pressure on Chancellor Merkel's popularity. Germany is looking ahead, therefore. Ms von der Leyen called for measures to strengthen the EU's external borders; and a crackdown on the massive international smuggling networks, using NATO warships. At the beginning of March, Chancellor Merkel and other leaders struck a deal with Turkey. Turkey contains some of the refugee flows in return for a restart of its long stalled EU accession talks.
But the long term solution, after peace, has to be helping in the reconstruction of Syria. She pledged that the German army, the Bundeswehr, would help jump start refugee competences. In a variation of the Biblical injunction about teaching people how to fish rather than giving them fish, rather than the German state just dousing the refugees with welfare, she said she had instructed the Bundeswehr to think ahead. The army has in fact committed itself to training, in Germany, large numbers of Syrian refugees in various practical and engineering-type professions, such as bomb disposal experts, electricians, fire fighters, logisticians, sanitation engineers, and more, to help rebuild a post-war Syria. While it's early days, they will apparently also be training "management experts" in higher planning skills - a future middle class, ready to take over and run the ravaged country.
Contrast this to Sweden, for example, the other big recipient country, which has so far taken a completely headless approach, in my view: thousands of young Syrians are lodged expensively in hostels and hotels at the equivalent of 200 pounds a night. Few of them work. Funding taken from the aid budget, including Sweden's contribution to the camps in Turkey and Lebanon, where all the Syrian refugee women and children are waiting. The UNHCR already complains of a massive shortfall in the funding for these camps. Obviously, 200 pounds goes a lot further in Turkey than in Sweden.
Let us wish Ms von der Leyen luck. She has sometimes been touted as Merkel's successor.

Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 26 March 2016 03:05 PM     General     Comments (0)  

Conformism and scientific research

18 March 2016 by Pelle Neroth

There is common picture of the artist as the liberated contrarian and scientists and and engineers as narrow-minded, conformist nerds.

I used to completely disagree with that. This was my argument: artists and comedians often play it very safe with prevailing nostrums of society: it is the very subjectivity of taste that makes them wary of challenging the authority of public opinion, the authority of art critics and the whims of the grant-making authorities. Not to mention the raft of anti freedom of speech laws ostensibly aimed at protecting people's dignity, but in reality which do so very selectively.

Artists may be transgressive, but in a very safe way. In Sweden, a woman who faked a psychosis was taken to hospital by ambulance and given treatment, costing thousands of pounds. It turned out her fakery was an installation of performance art. This was her final degree work. She had the whole thing secretly filmed by a friend. She became famous. So did the exhibition of photographs of dramatised scenes from the bible, including a photo of two homosexual men cradling the infant Jesus, the latter portrayed in a very erotic, borderline paedophile, way. The exhibition was displayed at Uppsala Cathedral - supported by the senior clergy of the nation - and won plaudits from the country's art critics. Over 100,000 people saw the show.

Cool, eh? Or maybe not. For neither this eroticised Jesus artist nor the one who faked a psychosis were really trangressive, because they were operating in a political and intellectual climate that applauds that kind of art. They were not risking anything; they were not challenging public taste - or at least not the public taste that mattered, the elite who pull the strings of the art world.

They did not act outside the bounds of taste of that influential group of people she needed to impress. In other words, while they may have been transgressive two generations ago, today they were acting entirely within the limits of official taste. Now, making fun of Islam - that, as we all know, is really taking a risk, in a way it wasn't before the rise of Islamic radicalism and the Rushdie affair. Very few artists mock Islam, the religion. There are thousands of hip, trendy artists who break taboos-that-seem-to-be-taboos-but aren't really. But the few that do, aren't they very much braver than the one who mocked Christ and (he knew beforehand), knowing, in our secular west, that mocking Christianity is an entirely safe target?

I used to cite that example whenever artists of my acquaintance told me artists were transgressive individualists, in contrast to scientist conformists. I thought scientists and engineers were more likely to resist fashion and follow the path of truth, than those self regarding types on the other side of the Two Cultures divide. Scientists were logical, rational people who could defend their arguments Science was less evanescent than art; perhaps, romantically, I felt scientists possessed a greater strength of character. I was irritated about the ignorance demonstrated by artists, like everyone else of a humanistic bent, towards the scientific process.

Since a member of my family contracted diabetes recently, I have been forced to think again. The illness caused considerable pain in the extremities, but has recently gone into remission since that person went on to a low carb diet: lots of meat and eggs and fish, no bread or pasta. Not even any vegetables. There is lots of carbohydrates in bread. Carbohydrates, unlike the protein and fat in meat and fish, spike the bloodsugar very quickly.

Normally insulin, produced by the pancreas, takes care of it, and transports the product into the cells as stored energy. Diabetics produce insufficient amounts of insulin so, unless medicine or injections of insulin bring the blood sugar down, the heightened levels, in time, cause all sorts of havoc with the body, damaging nerve endings, reducing eyesight, causing problems to the kidney and liver.
In the 1920s, before the discovery of animal-sourced insulin saved millions of lives, the only way to keep diabetics alive was to feed them meat, eggs and fish.

These foods contain lots of fat (and protein); few carbs. Doctors working in remote colonial outposts, with what used to be called "native peoples" whether India, Africa or Greenland, found that the "natives" who hunted for a living and ate huge amounts of fatty foods - like the inuit - very seldom contracted the diseases of Western civilisation. What characterised these carnivorous peoples, whose diet was heavily fatty, was very low rates of cancer, heart disease (even when controlling for age) - and no diabetes.

In the 1970s, however, we saw the growth of the "low fat, high carbs" philosophy. The key character was an American researcher called Ansel Keys, a very strong willed fellow. He promoted his theory relentlessly. Eating Fat was bad for you. It raised "bad" cholesterol levels in the blood. High cholesterol increased the incidence of heart disease, which shortened lifespans.

It actually turns out that each link in Keys's chain of arguments is controversial. Further, a book published last year found that Keys was very selective in his use of evidence: he travelled around Europe, from Finland to Crete, and gathered data on fat consumption and heart disease. Controversially, he missed out on data points which would have disproved his theory: France for instance where fat consumption was high and heart disease levels low.

One of his researchers, it was further revealed, found that sugar consumption (ie carbohydrates) correlated even more closely to heart disease than fat consumption did, but Keys had discouraged even looking at that correlation.

He was fixed upon the idea of fat. It was an example of Bad Science.
Keys's lobbying led to the publication of the American diet recommendation published in 1977, which, for the first time, established the food pyramid: lots of carbs at the base, protein in the middle. Fat at the narrow apex. Eat lots of carbs and little fat. Even its chief drafter now admits it was based more on ideology than on knowledge. The food industry latched on and started selling low fat versions of everything. The trouble is, low fat foods have less flavour. Solution: add carbs and diabetes-causing sugar. Oh dear. But by God it was profitable.

Meanwhile Americans, and others in the Western world, have been getting fatter in fatter in the last three decades, despite a reduction in their fat consumption. How so if Keys was right? A small number of dieticians and researchers are now finally being heard with a message that found it hard it to get a hearing in that same time. Fat doesn't make you fat, carbs make you fat. And high carb consumption is much more likely to give you diabetes than high fat consumption. Diabetes is the epidemic of our time.

The message would have got out earlier had not researchers on this track found it hard to get grants, have papers published, on this subject. They didn't get invited on to expert panels. Many chose just to switch off their brains and go with fashions. One who did not conform, writes author Nina Teicholz, who has written one of the definitive books on the story of meat's exclusion from the healthy diet, was one of the twentieth century's most revered nutrition scientists, the organic chemist David Kritchevsky. On a panel for the National Academy of Sciences, he suggested loosening the restrictions on dietary fat.

He said, in her book: "We were jumped on!People would spit on us! It was just like we had desecrated the American flag."... "They were so angry that we were going against the suggestions of the American Heart Association and the National Institutes of Health."

Now who was it that said that artists had a monopoly on political correctness? Teicholz writes: "the most remarkable aspect of the nutrition research community was its surprising lack of oxygen for alternative viewpoints. When I started out my research, I expected to find a community of scientists in decorous debate. Instead, I found {dissident] researcher..., who, by their own admission, was a cautionary tale for independently minded scientists seeking to challenge the conventional wisdom."

What I have realised is that you get people who dare not rock the boat - both among artists and scientists. Interestly, the low fat dogma was never as common among European researchers. There was always more tolerance for different views on the fat question here.

Pelle Neroth -- EU correspondent

Edited: 18 March 2016 at 07:54 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 18 March 2016 07:13 AM     General     Comments (0)  

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