Opšti topik o EU (ex kriza Evrozone)

[Budja]

Spanske obveznice na 10 godina dosle do 7% kamate. Italija isto u rastu i sada su na 6.2%.Inace, Spaniji je dobila povoljnije uslove bailouta od Grcke i ostalih ali im to nije pomoglo, abrem za sada, da obore kamate. Medjutim, ostali su poceli da se bune jer nisu dobili takve ulsove.Prigodan tekst sa CNBC:edit: slika

Super poruka pred grcke izbore. Cipras trlja ruke.

[Sirius]

Nisam toliko siguran za Sirizu ali zato i drugi davljenici u EU pokusavaju da dobiju ono sto i Spanija:

Slovenia Is Spain: Is Another European Country's Bank Bailout On The Way?Has the Spanish bank bailout set a precedent for all other insolvent EMU member countries to follow? Of course. The only question is when is the stigmata of demanding a bailout (which Europe now has no choice but to grant courtesy of set precedent, be it via ESM or otherwise) less relevant than national pride, than preserving one's banking sector, and preferably preempting the kinds of bank runs that pushed Spain to demand a bailout in the first place. For one small Eurozone member country the answer may be if not now, then very soon. Slovenia's Dnevnik asks a simple question: "How serious is the situation of Slovenian Finance - are we on the way of Spain?" The answer, in not so many words: very likely yes.From the google translated article - highlighted section most relevantAlthough at the last auction of short-term debt during the Slovenian buyers again dominated by domestic financial institutions, full of liquid assets of the European Central Bank (ECB), were required average yields are relatively high, recalls Primoz Cencelj of KD Funds.... In exchange for 60.373 million, the government should provide a 0.9 percent annual return, which is 0.1 percentage points more than the auction just over a month ago. Perhaps even more concern is that Slovenia had offered to investors for 0.05 per cent higher rate than at the end of May Spain, which are currently both sentenced to issue short-term debt securities.Just the Spanish case most striking, as it reflects the growing number of parallels with Slovenia. They offer themselves as the question whether Slovenia is on track to follow Spain and Europe ask for recapitalization of banks. "Despite the similarities between the two economies, Slovenia is still quite far from the Spanish scenario," said economist Igor Masten, who estimates that the delay in the Spanish economy worse, while weak compared to the material condition of the Spaniards over-indebtedness of Slovenian companies. Here, the similarities do not end because the two sectors, the total Grants of high exposure to real estate sector, the crisis has so brutally crushed. Banks' balance sheets in the Iberian peninsula and on the sunny side of the Alps are therefore imbued with bad investments and desperately needed injection of fresh capital. The Slovenian banks should be around 4 billion euros of bad loans, which represents about 8 percent of total assets. On the hair-like figures are from Spain, where they take up bad assets of investment banks 8.37 percent or more than 150 billion euros. The Spanish Government had therefore been to seek financial support in Europe, while Slovenia will have, at the probable lack of interest of foreign investors' funds to recapitalize banks to provide itself.But time is no longer in abundance, although the government to purchase Co Co bonds, at least temporarily solve the equity problems of NLB. This is a problem in the banking sector will not be removed, similarly as in Spain, the real problems of the information in the financial market does not lie in the largest bank. Threats to Asia to greater capital hole, the unofficial information is exposed by Nova KBM and Abanka as well as some smaller banks in domestic ownership, which can be fatal effect on the banking system and compels the country to seek assistance from the European Fund for the Permanent Protection euro (ESM). "It may not even be helpful," says Cencelj, which estimates that around 3.5 billion euros, at least for some time solve the banking problems. Search resources in the financial markets would be on the other hand, are much more expensive, because the required yield on ten-year bonds Slovenian stay in the area between 5.5 and six per cent.

[Tresko]

Ti iz CNBCja nemaju pojma. Italija je već dobila još krajem 2011, 200 i kusur milijardi eura sa 1% kamate. Zvanično se radilo o pozajmici ECB italijanskim bankama, koje su pak za te pare odmah kupile državne obveznice u Italiji i praktično su te pare završile kao pozajmica državi. S tim da je Italija te pare dobila jeftino, pošto će svojim bankama kamatu platiti jednog dana.

[Sirius]

Nije bas EU ali puno utice. Stanje SAD ekonomije:

The U.S. economic recovery has been weak and the looming fiscal cliff threatens to act as a further drag on the economy. Europe is imploding with the chances of a 'Grexit' increasing, and Spain's economy deteriorating and risking contagion.In his latest report "Charts With Dave", bearish Gluskin Sheff economist David Rosenberg looks at the state of the U.S. and global economy and writes that the recovery isn't where it should be."Three years into the aftermath of the worst recession since the 1930s, the global economy still cannot manage to expand organically — that is, without the need for ongoing life support from central banks and governments," writes Rosenberg.

DAVID ROSENBERG: 51 Signs The Economy Is A Total Disaster

[Sirius]

1. Rekordna nezaposlenost u Evrozoni2. Iznad 50 je ekspanzija ispod 50 kontrakcija.

[Sirius]

Zanimljivo je videti kretanje prozivodnje po najzancajnim zemljama:1. EU(Nemacka, Italija, Francuska)-nastavak pada2. Rusija-rast3. Kina-pad ili stagnacija u zavisnosti od podatka4. SAD-verovatno rast.

[Prospero]

A federal Europe, by orderby Serge HalimiThe true believer’s faith is strengthened by disaster. So the true believers in a federal Europe have no intention of abandoning the monetary, budgetary and commercial integration policies that have exacerbated and prolonged the economic crisis. On the contrary, they want to increase the authority of those responsible for these policies. If European summits, stability pacts and disciplinary measures haven’t solved the problem, then that, our true believers assure us, is because they did not go far enough: we owe all our successes to Europe, all our failures to its absence. On the strength of this blind faith, they sleep soundly and dream happy dreams.They also have nightmares, because federalists do not dislike storms: warnings of storms ahead give them the pretext of an emergency with which to subdue resistance to their grand design. Caught in mid-stream and under fire, you cannot go back. You must reach the other bank or die in the attempt, make the great “federal leap” or fail. As the former German foreign minister, Joschka Fischer, said last year: “Unless the current confederation evolves into a political federation with a central government, the eurozone — and the Union as a whole — will disintegrate” (*1). In France, the three major radio networks and two of the main newspapers say the same thing every day.Listening to the federalists, you would think the European institutions have no power or resources, while states have unlimited authority and means. But the European Central Bank (ECB), which has managed the crisis with the success we know, producing €1,000bn to refinance the banks, does not depend on EU governments or EU voters. Far from being under excessive constraints because of any lack of integration (a common budget, a single minister), the harmonisation of European policies under the German austerity regime has succeeded in increasing national debt and public poverty.Today’s prophets of doom are former optimists. They were behind the European Community policies technocratically imposed 30 years ago; they celebrated the greatest market in the world, then the single currency, then the “policy of civilisation”; ignored public opinion as soon as it dissented; destroyed any plan for European integration based on social welfare, public services or trade protection. But when midnight strikes and their coach turns into a pumpkin, they forget how happy they were, and swear they always warned us the scheme would never work.Will the current drama be the pretext for imposing a new federal leap forward without allowing universal suffrage a last bow? Europe is already in trouble; it cannot afford to deny democracy yet again.(*1) Le Figaro, Paris, 7 November 2011

[casperbgd]

1. Rekordna nezaposlenost u Evrozoni2. Iznad 50 je ekspanzija ispod 50 kontrakcija.

Jel to po ovome znaci da je najveca nezaposlenost bila 2009te?

[Sirius]

Ne, najveca nezaposlenost je sada. Nezaposlenost je tzv. lagging indicator ona se menja pozitivno-negativno kada se pomera citava ekonomija ne pojedini sektori. Ako malo razmislis videces da je nezaposlenost indikator koji dolazi tek posle velikih potresa. Nezaposlenost je vise idnikator za politicare. Indikator poput industrijiske proizvodnje kaze da je moguca recesija ili jako slab rast. Onaj ko se bavi ekonomijom, berzom vidi PMI i zna da ce nezaposlenost rasti/padati ali PMI MI na 49.7 ne znaci nista za obicnog coveka, pa i politicara, ali nezaposlenost sa 10% na 11% itekako znaci. Upravo imamo takav primer u SAD. Indeks industrijiske proizvodnje je izasao kao kontrakcija, prvi put za 3 godine, ali sektor usluga se jos drzi iznad vode. Slabo ali se jos uvek drzi. Zaposljavanje je znacajno usporeno i dolazi iz sektora usluga. Rast,ako ne bude recesije, ce biti skroman.

[Sirius]

Eurozone crisis will last for 20 yearsI always wondered who buys risky assets after one of these “historic” statements from the European Council. Sometimes the rally lasts for hours. Other times it lasts for days. The last one ended after less than a week; Italian and Spanish spreads are now above pre-summit levels.The consensus among observers had been that the EU had taken an important step in the right direction by agreeing a pathway towards a banking union, but that they did not do enough on crisis resolution. I disagree with that statement. I think it was a very large step – in the wrong direction. The summit made a concrete crisis resolution decision contingent on a future decision, which will be even harder to reach, and thus even more likely to fail.They agreed that there shall be no common bank recapitalisation until a full banking union is established. And the Bundesbank has reminded us that the latter is not possible without a political union. The logical implication is that we won’t solve the crisis for the next 20 years.What we know now is that Germany will not agree to mutualised deposit insurance. It cannot even agree to give the European Stability Mechanism a banking licence so that it can leverage itself. If Germany cannot do the minimum necessary now, why should anybody think it can agree a political union? This is less credible than the promise by an alcoholic to give up drinking in five years.The politics of the euro rescue has crossed an important threshold in Germany. A narrow majority is still in favour of the euro, but a majority is against further rescues. A group of 160 economists, led by Hans-Werner Sinn, president of the Ifo economics institute, last week published a manifesto against a banking union. It was full of sound and fury, but the importance of this document is that it reflects a consensus view.Angela Merkel’s answer was revealing. She told them that there is nothing to worry about. The banking union was about joint supervision, she said. There will be no joint deposit insurance. She has a very different understanding of a banking union than the European Central Bank. At most, I expect this new banking union to cover the 25 largest banks, and leave those cajas and Landesbanken in national control. This is like an alcoholic who promises to drink only the better cognacs from now on.The banking union that is required is the one Germany will not accept: central regulation and supervision, a common restructuring fund and common deposit insurance. It would take years to create. If done properly, it would require a change of national constitutions and European treaties, if only to redefine the role of the ECB. It is sheer madness to make crisis resolution contingent on the success of what would be the biggest European integration exercise in history.With interest rates on 10-year government bonds over 6 per cent, neither Italy nor Spain can sustain their membership in the eurozone. This is what Mario Monti and Mariano Rajoy should have made clear to Angela Merkel at the summit. They should have told her that their governments would make preparations for a withdrawal from the eurozone if there was no change in policy. A resolution requires either a eurozone bond – or some other form of debt mutualisation –in both the public and private sectors, and ECB bond purchases. Germany does not accept the former. The ECB does not accept the latter.If something is neither sustainable nor self-correcting, there are only two courses of action left. The first is to wait patiently until the situation breaks down. This is the strategy pursued by the European Council – and by alcoholics. The alternative is to start making preparations – and be careful not to trigger a breakdown in the process. It is hard to envisage an exit without breaching hundreds of national and European laws. This is why nobody is doing it. One would have to use a force majeure defence. One cannot prepare for such an event. It took a decade to create the euro. It will take more than a long weekend to undo it. A collapse would constitute the biggest economic shock of our age. But among a list of bad breakup choices, some are a better than others. I will write about these in a future column.Back in November, I wrote that the European Council had ten days to save the euro. If they had laid the groundwork for a banking and a fiscal union back then, they might now be in a position to agree an effective crisis resolution strategy – consisting of bank recapitalisation and bond purchases. They did not do it then. And they are not in a position to solve the crisis now.The message I took away from the summit is that the eurozone will not resolve the crisis. In that sense, it was indeed a “historic” meeting.

Ovo je iz Financial Timesa a sledece je analiza Reutersa:Analysis: Euro zone fragmenting faster than EU can act :)

[Sirius]

Danas u Madridu:Police fire rubber bullets on austerity protest in Spain, witnesses say

[Giga Moravac]

Na you tube-u ima lik koji se zove Richard Wolff. Lik je Americki ekonomista i na jednostavan i razumljiv nacin prati krizu. Za razvoj i ocekivanja krize u Americi videti predavanje koje se zove Capitalism has hit the fan. A u vezi Evopske unije bilo mi je vrlo zanimljivo ovo (pocev od 19-minuta do kraja- prava prica pocinje od 24-tog)

Edited July 12, 2012 by Giga Moravac

[angern]

Stotine tisuća ljudi na ulicama Madrida: 'Žele uništiti zemlju. Moramo ih spriječiti'Specijalna policija palicama i gumenim mecima pokušala je rastjerati ljude. Šest osoba je ozlijeđenoMADRID - Golemo mnoštvo preplavilo je u četvrtak navečer središte Madrida odlučno se protiveći novim mjerama štednje španjolske vlade, povećanju PDV-a i rezanju proračuna koji pogađa zaposlenike u javnom sektoru i nezaposlene.Pred kraj prosvjednog okupljanja izbili su izgredi pa je specijalna policija palicama i gumenim mecima pokušala rastjerati sudionike. Šest osoba je lakše ozlijeđeno a sedam je uhićeno, javila je policija."Ruke u zrak, ovo je prepad", izvikivali su prosvjednici koji su se okupili nekoliko sati ranije, polagano šetajući u povorci glavnim prometnicama, preuzimajući slogan što se prometnuo u poziv na ujedinjenje prosvjednika koji sve češće izlaze na ulicu otkako je vlada 11. srpnja najavila mjere kojima kani uštedjeti 65 milijarda eura.U Madridu se okupilo više stotina tisuća ljudi, izvijestili su novinari na licu mjesta. Sindikati su pozvali na prosvjede u 80 gradova, pod geslom "Žele uništiti zemlju. Moramo ih spriječiti".Nove mjere otežavaju ionako teško stanje u Španjolskoj koja je u recesiji i ima čak 25 posto nezaposlenih.Ne možemo učiniti ništa doli da izađemo na ulicu. U zadnje četiri godine izgubila sam 10 do 15 posto plaće. A nove mjere neće riješiti krizu", ogorčena je Sara Alvera, 51-godišnja zaposlenica u državnoj revizorskoj kući.Vlada štednjom želi postaviti javne financije na noge: planirana ušteda od 27,3 milijarde eura u 2012. nije dovoljna i Bruxelles traži drakonske uvjete u zamjenu za pomoć španjolskim bankama i odgodu do 2014. da zemlja smanji javni deficit ispod 3 posto.Desničarski premijer Mariano Rajoy, koji je odustao od svojih obećanja, odlučio je sada povisiti PDV, što bi do 2014. trebalo donijeti 22 milijarde eura.Od prošlog tjedna, odgovarajući na poziv sindikata, "gnjevnih" i društvenih mreža, Španjolci iz svih slojeva društva svakodnevno se okupljaju na ulici, odjeveni u majice - žute zaposleni u upravi i pravosuđu, prosvjetari u zelene, zdravstveni radnici u bijele.Pošto su se sudionici prosvjedne povorke mirno razišli s trga Puerte del Sol u središtu Madrida, omanja skupina mladih okupila se pred policijskim kordonom koji je štitio prilaze zgradi parlamenta.Kako se nisu htjeli udaljiti, policajci su ih gurali palicama, ispaljujući gumene metke. Prosvjednici su se razbježali po okolnim ulicama bacajući boce i limenke piva i paleći u prolazu kante za smeće, a neki su se opet okupljali izazivajući policijske kordone. link

[Prospero]

Speech by Mario Draghi, President of the European Central Bankat the Global Investment Conference in London26 July 2012I asked myself what sort of message I want to give to you; I wouldn’t use the word “sell”, but actually I think the best thing I could do, is to give you a candid assessment of how we view the euro situation from Frankfurt.And the first thing that came to mind was something that people said many years ago and then stopped saying it: The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does. So the euro was a bumblebee that flew very well for several years. And now – and I think people ask “how come?” – probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what after the financial crisis. The bumblebee would have to graduate to a real bee. And that’s what it’s doing. The first message I would like to send, is that the euro is much, much stronger, the euro area is much, much stronger than people acknowledge today. Not only if you look over the last 10 years but also if you look at it now, you see that as far as inflation, employment, productivity, the euro area has done either like or better than US or Japan.Then the comparison becomes even more dramatic when we come to deficit and debt. The euro area has much lower deficit, much lower debt than these two countries. And also not less important, it has a balanced current account, no deficits, but it also has a degree of social cohesion that you wouldn’t find either in the other two countries.That is a very important ingredient for undertaking all the structural reforms that will actually graduate the bumblebee into a real bee.The second point, the second message I would like to send today, is that progress has been extraordinary in the last six months. If you compare today the euro area member states with six months ago, you will see that the world is entirely different today, and for the better.And this progress has taken different shapes. At national level, because of course, while I was saying, while I was glorifying the merits of the euro, you were thinking “but that’s an average!”, and “in fact countries diverge so much within the euro area, that averages are not representative any longer, when the variance is so big”.But I would say that over the last six months, this average, well the variances tend to decrease and countries tend to converge much more than they have done in many years - both at national level, in countries like Portugal, Ireland and countries that are not in the programme, like Spain and Italy.The progress in undertaking deficit control, structural reforms has been remarkable. And they will have to continue to do so. But the pace has been set and all the signals that we get is that they don’t relent, stop reforming themselves. It’s a complex process because for many years, very little was done – I will come to this in a moment.But a lot of progress has been done at supranational level. That’s why I always say that the last summit was a real success. The last summit was a real success because for the first time in many years, all the leaders of the 27 countries of Europe, including UK etc., said that the only way out of this present crisis is to have more Europe, not less Europe.A Europe that is founded on four building blocks: a fiscal union, a financial union, an economic union and a political union. These blocks, in two words – we can continue discussing this later – mean that much more of what is national sovereignty is going to be exercised at supranational level, that common fiscal rules will bind government actions on the fiscal side.Then in the banking union or financial markets union, we will have one supervisor for the whole euro area. And to show that there is full determination to move ahead and these are not just empty words, the European Commission will present a proposal for the supervisor in early September. So in a month. And I think I can say that works are quite advanced in this direction.So more Europe, but also the various firewalls have been given attention and now they are ready to work much better than in the past.The second message is that there is more progress than it has been acknowledged.But the third point I want to make is in a sense more political.When people talk about the fragility of the euro and the increasing fragility of the euro, and perhaps the crisis of the euro, very often non-euro area member states or leaders, underestimate the amount of political capital that is being invested in the euro.And so we view this, and I do not think we are unbiased observers, we think the euro is irreversible. And it’s not an empty word now, because I preceded saying exactly what actions have been made, are being made to make it irreversible. But there is another message I want to tell you.Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.There are some short-term challenges, to say the least. The short-term challenges in our view relate mostly to the financial fragmentation that has taken place in the euro area. Investors retreated within their national boundaries. The interbank market is not functioning. It is only functioning very little within each country by the way, but it is certainly not functioning across countries.And I think the key strategy point here is that if we want to get out of this crisis, we have to repair this financial fragmentation.There are at least two dimensions to this. The interbank market is not functioning, because for any bank in the world the current liquidity regulations make - to lend to other banks or borrow from other banks - a money losing proposition. So the first reason is that regulation has to be recalibrated completely.The second point is in a sense a collective action problem: because national supervisors, looking at the crisis, have asked their banks, the banks under their supervision, to withdraw their activities within national boundaries. And they ring fenced liquidity positions so liquidity can’t flow, even across the same holding group because the financial sector supervisors are saying “no”.So even though each one of them may be right, collectively they have been wrong. And this situation will have to be overcome of course.And then there is a risk aversion factor. Risk aversion has to do with counterparty risk. Now to the extent that I think my counterparty is going to default, I am not going to lend to this counterparty. But it can be because it is short of funding. And I think we took care of that with the two big LTROs where we injected half a trillion of net liquidity into the euro area banks. We took care of that.Then you have the counterparty recess related to the perception that my counterparty can fail because of lack of capital. We can do little about that.Then there’s another dimension to this that has to do with the premia that are being charged on sovereign states borrowings. These premia have to do, as I said, with default, with liquidity, but they also have to do more and more with convertibility, with the risk of convertibility. Now to the extent that these premia do not have to do with factors inherent to my counterparty - they come into our mandate. They come within our remit.To the extent that the size of these sovereign premia hampers the functioning of the monetary policy transmission channel, they come within our mandate.So we have to cope with this financial fragmentation addressing these issues. I think I will stop here; I think my assessment was candid and frank enough. Thank you.

[Prospero]

Decline Is a ChoiceThe West has nothing to fear but fear itself.BY HUBERT VÉDRINE | DECEMBER 10, 2012The collapse of the Soviet Union in 1991 was supposed to mark both the "end of history" and the birth of an international community founded on the universal acceptance of Western values -- a world in which "market democracy" was the norm. Instead, the West has suffered a litany of disappointments -- from costly wars to financial crises to the rise of non-Western powers -- that has left it deeply disillusioned. Far from a cooperative, rule-based order, the contemporary world is a place of vast, permanent competition -- a muddled melee among regional poles, countries, governments, businesses, banks, financial funds, rating agencies, producers, consumers, individuals, international media, and criminal organizations, if not also between "civilizations." This competition continues even in the forums that are supposed to regulate it: the World Trade Organization, the G-20, and others.After the end of the Cold War, those in the West with universalist sensibilities -- particularly in Europe -- strove to promote international exchange. Of course, this exchange was supposed to be unidirectional -- the projection of the values of freedom and progress and the market economy onto the rest of the world. But, to the consternation of the proselytizing West, the outside world is now being projected onto it. Just as colonized peoples turned colonizers' ideas -- liberté, égalité -- against them, the globalized peoples have begun to leverage the deregulated global economy to their advantage. As a result, we have seen the rise of the BRICS (Brazil, Russia, India, China, and South Africa) and dozens of other "emerging" countries that signal the end of Western control over global affairs.Faced with this disorienting new reality, part of the Western elite has taken refuge in denial, insisting on ever more openness and globalization -- and falling further and further out of touch with public opinion. Meanwhile, the accumulation of these upheavals is producing a sense of vertigo and even panic among Western populations. All the world's flows -- trade, finance, migration, culture -- seem totally unchecked and uncontrollable, at least by the West and the international organizations that have, until now, served their interests. In the United States, the Republican Party is adrift. Unable to accept the end of a John Wayne-esque era, party leaders seek at once to isolate the United States and curb the threat of competition from the "rest." This reaction, no doubt, contributed to the GOP's defeat on Nov. 6.In Europe, we are seeing the rise of utopian and protest votes, quasi-mutinies at the polls, a sharp increase in anti-incumbency, and, on the flip side, voter abstention and general distrust. These phenomena are linked not only to the economic crisis and the recession but also to a gnawing feeling of powerlessness that is undermining civic confidence. Nowhere is the psychological distress more acute than in France, where surveys have found that citizens are more worried about the future than in Afghanistan.The anxiety that prevails in Europe about the emerging world order has created a new audience for catastrophic predictions. This intellectual current, fed by apocalyptic extrapolations of all kinds, seeks utopian panaceas in the form of rational world government, European federalism, international civil society, and international justice. Such ideals offer a substitute for confidence in the market and the veneration of multilateralism and the international "community." It is a mindset that stands in stark contrast with that of non-European peoples, who brim with optimism and regard the future with confidence and appetite.Today, use of the phrase "win-win globalization" amounts to provocation, at least in Europe. Europeans have been especially disappointed by the current shifts because many desperately wanted to believe they were living in a post-tragic world that had evolved beyond history and identity. It was their age of innocence. But instead they got austerity and an almost post-democratic system of sanctions to ensure budgetary discipline.For the moment at least, the debate over eurozone economic policy has been settled in favor of iron-fisted Merkelian rule. But the election of François Hollande in France has opened a crucial parallel debate about growth and the appropriate balance between efficiency and democracy in Europe. As a result, it is not impossible to imagine a compromise involving reforms that are not overly harsh or hasty and that are gradual enough to be socially and politically palatable.It is on this kind of deal-making that the West's future will turn. Given the magnitude of the global shifts under way, the course charted by Western governments today will have a monumental impact on world politics tomorrow. The challenges facing the United States and Europe today are different but intertwined: Europeans must awaken from their strategic slumber; Americans must accept the new global realities and adapt their strategy accordingly.* * *The emergence of certain countries, formerly referred to as "Third World" or by the well-intentioned euphemism "developing countries" (even when they were not), is now an undeniable fact. There is China with its more than 1.3 billion inhabitants and staggering economic growth, the whole of Asia, and the BRICS, minus Russia, which is more hovering than emerging. All told, some observers count as many as 100 emerging countries. This means that we now have the older developed countries of the G-7 and the OECD, the emerging or emerged countries (the most important of which are members of the G-20), and the pre-emerging countries from the so-called Global South, most of which are located in Africa. Indeed, half of the world's 20 fastest-growing economics are located in Africa.A daily barrage of figures and statistics paints a picture of this brave new world. But with the exception of a handful of Western multinational corporations that have a short-term interest in recklessly transferring core or cutting-edge technology, the West remains stupefied by, if not oblivious to, the enormous adjustments that will be required in order to adapt. Already, the West has begun to lose its monopoly on industrial capacity, technical expertise, and even currency, now that China and Japan have begun trading in yuan and yen. Likewise, soft power is now part of the arsenal of a growing list of emerging countries. Even the balance of military power -- as reflected in rising military budgets in China, India, and Brazil -- is shifting ever so slightly, as is the geopolitical clout that is the handmaiden of military might. Indeed, how else can one explain India's and Brazil's decision to ally themselves with Russia and China in the U.N. Security Council to block Western intervention in Syria?There is no aspect of Western supremacy that emerging countries are not prepared to challenge -- now or in the future -- from the distribution of power within international institutions to the values that underwrite them. For the first time in history, as former U.S. national security advisors Zbigniew Brzezinski and Brent Scowcroft rightly pointed out in 2008, "all of humanity is politically active."But if emerging powers have grown increasingly assertive on the world stage, they do not appear poised to supplant their more established counterparts -- at least not yet. The meteoric rise of such powers over the last decade has, to a certain extent, obscured the fact that all suffer from vulnerabilities. Political risks, such as the uncertain future of the Russian and Chinese regimes and a limited but growing opposition in many other countries, could eventually impede their development. Likewise, inequality has risen to explosive levels in many emerging countries, just as growth rates are tapering off and high inflation has necessitated "cooling" policies in places like Brazil. Environmental problems, pollution, overexploitation, and scarcity also loom on the horizon.It is important to remember, moreover, that per capita income is still very low in most emerging countries and will remain so for the foreseeable future. And while demographics can be an asset, they can also be a liability: India is weighed down by overpopulation, China by its aging population, and Russia by depopulation. Russia may have oil and gas, but it is struggling to establish a modern economy. There is also a tendency to overestimate the unity and homogeneity of the emerging powers. They come together to criticize the West and stake claims, but are just as often divided by individual rivalries -- strategic competition between China and India, commercial competition between Brazil and Argentina, and competition between Nigeria and South Africa over leadership in Africa.Likewise, we tend to forget, especially in Europe, that Western countries retain considerable advantages. Not only do they dominate the word's international institutions, but Western countries still enjoy colossal wealth and economic power. The West comprises 58 percent of global GDP and 40 percent of international trade when you include Japan. Moreover, the American capacity for invention and creation remains unrivaled, and its soft power unequaled. The United States has won 39 percent of Nobel Prizes ever awarded and 48 percent of prizes in the sciences, medicine, and technology. What's more, the West boasts almost all the top global universities, and its education levels are still higher than in other parts of the world.Finally, Western countries retain a military advantage that they are unlikely to relinquish anytime soon. U.S. defense spending continues to represent close to half of global military spending, and France and Britain have maintained their military capabilities. Moreover, the prospect of American disengagement is deeply worrying to neighbors of the largest emerging powers, strengthening the United States' position worldwide and making possible proposals like President Barack Obama's plan to establish a trans-Pacific free trade zone that would exclude China. Lastly, American cultural supremacy is beyond question and to that we can add the vitality of Francophonie (even if the French elite is losing interest in it) and Hispanidad. In short, the West is in no danger of being eclipsed by the rest.* * *So what will the future hold? It seems clear that the West will never recover the unique position it held from the 16th through the 20th centuries, nor will the United States regain the kind of unchallenged power it enjoyed in 1945 or during the hyperpower decade of the 1990s. It will no longer be the only force shaping the world. At the same time, however, it is highly unlikely that China -- assuming that it even wants to -- will dominate the world as America has done, for the last century, with its hard power and soft power. Nor will Asia as a whole, much less the many emerging powers, whose interests are far too diverse to form a permanent bloc. We will not be entering a "post-American world" anytime soon. The United States will almost certainly retain its position of leadership -- albeit a leadership that is relative, contested, and challenged -- even after the overall size of China's economy has surpassed it around 2020.It is likely, however, that China will try to tighten its grip on its neighbors and extend its influence over countries whose economies depend heavily on Chinese imports or investment, particularly those in Africa and Latin America. The balance of power among the world's major powers will thus continue to oscillate, following French analyst Pierre Hassner's prediction of a long chaos, or at the very least strategic disorder. Competition will be the defining feature of world politics.* * *Faced with these challenges, how should Western countries proceed? Formulating -- and sticking to -- a coherent strategy will be paramount if the West is to maximize its interests, even as the balance of power shifts in favor of emerging countries. Inevitably, this will mean accepting the necessary adjustments to international institutions and reaching agreements with new powers on rules and norms, as well as on reasonable timetables for any changes agreed upon. All this will require Europeans to re-embrace strategic and historical thought, start thinking of Europe as a power, focus on broader projects, end institutional bickering, and coordinate with each other (at least the largest countries) in order to make Europe a leader in the re-regulation of globalization run amok.As often as possible, Europe should coordinate policies and strategies with the United States. Together, they should forge alliances, issue by issue, with one or more emerging powers. The West must also restimulate economic growth -- not just any kind of growth, but sustainable growth that will drive a "greening" process guided by new economic indicators that are more relevant than stale, simplistic measures like GDP. This growth must be based on market economies re-regulated by sensible rules and safeguards, in which the financial sector is scaled back to reasonable proportions and discouraged from seeking artificial financial gains and engaging in unlimited speculation that is largely unconnected to the real economy. The reordering of the economic sphere, in turn, will depend on our ability to re-legitimize our democratic systems and make them effective once again, perhaps by redirecting some of the energy produced by protest movements or "direct" democracy and better protecting our political systems from the tyranny of focus groups and incessant polling.There is a striking contrast between the West's current position -- and the medium- and long-run potential it still maintains -- and the atmosphere of anxiety that predominates. Europe is weighed down by pessimism, France by melancholy. But if Europe cleans up its finances, kick-starts sufficient levels of growth, and improves efficiency without becoming too technocratic, its future will be enviable.Europe's primary handicap in the multipolar scuffle that has just begun is its pessimism. It should take a cue from Franklin D. Roosevelt and embrace the idea that "the only thing we have to fear is fear itself." The United States, meanwhile, continues to believe in its role, in its capacity for recovery, and in itself. This American religion -- optimism -- is still intact, even if the structure of the electorate that rehired Obama represents a spectacular and irreversible demographic shift. And by giving the incumbent president a second chance in spite of a number of disappointments, the majority of Americans demonstrated an understanding that the United States will not be able to meet the challenges ahead by moving backward. But there are two Americas. Mitt Romney's America and Obama's America have fundamentally different conceptions of how best to respond to the rise of the "rest," and this division will no doubt make consensus on foreign policy very challenging.From the outside, the psychological gap between the United States and Europe is growing wider. The striking contradiction between the global nature of the problems that must be confronted and the national frameworks within which decisions are made is strengthening the resolve of many countries to maintain enough power to impose their will on the international system -- or at least to prevent the system from imposing the will of others upon them. These countries are not putting their confidence in a hypothetical "global government," which will no doubt remain a utopia (though we could see some form of "collective government" in the future). The human race is characterized by thousands of years of differentiation; a few decades of Internet has not homogenized or made it "flat." Progress, therefore, will depend on cooperation, just as it always has.Multipolar competition will occur alongside growing interdependence and mounting pressure from the global environmental time bomb. This situation could lead to increased confrontation and potentially even conflict. Responsible actors must therefore work to deepen cooperative norms. But the road to international cooperation will not be straight, smooth or without turmoil, especially because economic and financial competition, even if it is better regulated, will produce unstable and shifting power relations.If this period of intense competition is to be managed peacefully, all the major powers -- starting with the United States and China -- must cede certain claims and parts of their mythology, without relinquishing the defense of their legitimate vital interests. These countries must then help their populations understand and accept such shifts, despite the existence of fears and the instinct for power. This will not be an easy task. Governance in China will be more difficult in the future than it has been during the past 25 years. And it is unclear whether the American people will learn to accept what their president clearly understands -- that its leadership, if it is to endure, must become more sophisticated, at times exercised "from behind" and at other moments practiced by proxy. Will the United States come to terms with this and benefit from a clear understanding of the new realities and forces at work in the world? Will it accept that, even if it does this, American leadership will still be relative, not absolute? The way the United States, which increasingly resembles a global-nation, responds to this challenge will have a major impact on the world of tomorrow and especially on its European allies. If the United States fails to respond -- and if Europe sinks deeper into despair -- the West won't just lose its monopoly on global power; it will be shut out of the global power structure altogether.