Saturday, March 24, 2012


The funniest migrants are perhaps street musicians as this group of Romanian musicians in the streets of Brussels. Not so nice are the Romanian beggars on the streets and in the subway of Brussels. 
There are living 32,5 million foreigners in the European Union. This is 6,5% of the total European population. Most foreigners – 20,2 million - are coming from outside of the European Union, Turkey and Morocco. Foreigners are much younger than the ‘original’ European population. The average foreigner is 34,4 years old, the average ‘original’ European population is 41,5 years old.

In the 20th century the ‘traditional’ migration countries were Turkey and Morocco. Since the ‘new’ middle and eastern European states like Poland, Rumania, Lithuania, Bulgaria etc. have become members of the EU (2004 – 2007), migration of these countries has grown very fast.

Polish migrants together with Lithuanians and Slovaks went mainly to the northern Western European countries like Great Britain, Germany, Ireland and the Netherlands. Rumanians and others went mostly to Italy, Greece and sometimes also Germany.

Poland became a member of the EU in 2004. The Centre of Migration Research in Warsaw informs that the amount of temporary Polish migrants increased from nearly 1,5 million to 2,3 million between 2004 and 2007, which is 6,6% of the total Polish population. Since the European crisis the amount of migrants has decreased a little bit.

Rumania became a member of the EU in 2007, but migration started already earlier. The amount of Rumanian migrants doubled until 2,1 million between 2005 and 2009 which is about 7% of the total Rumanian population.

Migrants send a lot of money to their country of origin. The total amount of money in 2010 was 31.2 billion Euro. From this amount stayed 8,9 billion within the European Union. 22,3 Billion was send to countries outside of the EU.

Poland, Rumania and Portugal receive most of the money of their fellow country migrants as is shown on the graphic. 

A special category of migrants are the so called border workers, those who earn their living just on the other side of the border and the seasonal workers. They together earned 47 billion Euro in 2010.

Saturday, March 17, 2012


Published:  New York Times, March 14, 2012

TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.

I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.
When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.
Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.

How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.

These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.

When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces. I was taught to be concerned with learning the ropes, finding out what a derivative was, understanding finance, getting to know our clients and what motivated them, learning how they defined success and what we could do to help them get there.
My proudest moments in life — getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.

I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.

Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.

Friday, March 2, 2012


ETUC Secretary General Bernadette Ségol speaks to the press in the Brussels Wetstraat (Rue de Loi) in front of the EU Commission offices where the action was held.
Last Wednesday, 29th February, the European Trade Union Confederation – ETUC organized a so-called “decentralized European day of action” for “employment and social justice” with the slogan "enough is enough" in the 27 EU countries.
ETUC Secretary General Bernadette Ségol speaks to the assembeld protesters.
The ETUC rejects a whole lists of trends since the onset of globalization: “the downward pressure on wages, the dismantling of social protection, attempts to make the labour-market even more flexible, the privatization of public services, the reduction of pensions, social exclusion, the unraveling of collective bargaining and the social dialogue, an unfair distribution of efforts. Workers are paying the high price of a crisis they did not cause, while the world of finance and speculators are coming out unscathed.“

Protesters with the slogans "Fuck the Banksters" and "We can only lose our chains".
The question is that since we entered a globalized world these questions are not so easy to solve. How do you for example compete with Chinese industries that have at their disposal an army of millions of very low-paid workers without any fundamental social rights? Should we close our European markets for Chinese products of should we accept that they also form part of the world and have the right to develop their economy based on cheap labour?

If Europe chooses to protect its economy against cheap products from other countries and to become a protectionist region this would not only affect China but many other countries that exports cheap products to Europe. In that case the European crisis will affect the whole world-economy with the result that the more vulnerable people will suffer.

A carnavalesque protester of the Christian Trade Union Confederation.
Regarding privatization, it is a true that privatization of public services is not a solution for cutting the growing costs. But in many countries public-service workers have higher wages and social benefits than workers in the private sector. Another problem is that a number of political parties in a number of countries use public services as a job-machine for their voters who have to be paid with tax-money. 

TYhe travelling protester.
The reason for lowering the state pensions or increasing the age of retirement is the aging of the population. Fewer and fewer people have to provide for the pensions for more and more retirees. Should the young people pay more of their wages for the pensions of the retirees while on the other hand wanting to start a family and having to bring up their children? 

Portrait of a group of demonstrators from the French confederation Force Ouvrière.
Of course workers did not cause the financial or banking crisis of 2008 like the Greek workers did not create the debt-mountain Greece now is confronted with. However, if the banks were not saved by tax-money and were let to go broke, as happened in the USA with Lehmann Brothers, a lot of citizens would have lost their savings and credits, that make the economy run smoothly, with the result of mass unemployment.

The text on the banner is "you can not tighten your belts and drop your pants at the same time".
The same can be asked about the Greek crisis. What is worse for Greek workers? The complete collapse of the Greek economy as a consequence of going broke or to accept financial support of the IMF and the Euro-zone together with reforms and an austerity plan to restart the economic engine of Greece again? 

"Socialist struggle. There is an alternative."
On the other had ETUC warns for the overly ambitious deficit targets of the European governments by slashing public services and public investment, cutting wages and social benefits:

The ETUC strongly opposes this ‘austerity’ approach. Austerity will take us down the road to ruin. Austerity will defeat itself and will result in weaker economies and higher, not lower, public debt:

-      Austerity, especially when all member states simultaneously cut demand, will push the economy back into prolonged stagnation. This will cost Europe at least 4 million jobs, jobs that Europe desperately needs considering unemployment currently stands at 23 million.

-      Austerity will also damage the growth potential of the European economy over the longer term. Persistent unemployment combined with precarious work, will downgrade human capital. Persistent depression will make business think twice before investing in a region that is unable to offer stable demand perspectives. In turn, reduced investment means productivity and innovation will suffer.

-      Austerity will undermine the industrial basis of Europe. International business, facing a continent with an ailing economy, will relocate industrial investment to other regions in the world which provide dynamic demand perspectives.

-      Austerity will prolong the sovereign debt crisis. Deficit cuts will be offset by the economic depression’s negative feedback effects on social spending and tax revenue. And while public deficits remain high, economic recession and deflation will push nominal GDP so that public debt as a share of GDP will continue to shoot up. Europe will try to get itself out of a hole by digging a deeper one.” 

An overview of the ETUC protesters in front of the EU Commission Building Berlaymont.