World View: European Union to 'Mobilize' Private Savings for Bailouts

This morning's key headlines from

  • 'Brilliant, bitter singles' ruin Valentine's Day for Shanghai, China, couples
  • Greece's unemployment reaches new record high
  • European Union to 'mobilize' private savings for bailouts
  • 2,500 couples marry in South Korea in pre-Valentine's Day ceremony

Welcome to the Valentine's Day edition of Generational Dynamics World View! 

'Brilliant, bitter singles' ruin Valentine's Day for Shanghai, China, couples

A scene from Beijing Love Story
A scene from Beijing Love Story

A Shanghai male named "UP" who broke up with his girlfriend last year and who describes himself as a "computer nerd" has found a unique way to ruin Valentine's Day for numerous other couples in Shanghai. Any couple wanting to go to the cinema to see the popular movie Beijing Love Story will have to split up. Using crowdfunding, "UP" collected enough money from "brilliant, bitter singles" to purchase tickets to all the odd-numbered seats in the theatre, so that any lovers wanting to see the movie will have to sit at least one seat apart from each other. According to an online posting by "UP": 

Want to see a movie on Valentine’s Day? Sorry, you’ll have to sit separately. Absence makes the heart grow fonder. Give us singles a chance.

Beijing Love Story is a movie based on a hit TV series. The plot of the movie is told through the eyes of five couples; two teenagers meet and find purest puppy love; a young couple are convinced they are soul mates after making eye contact for the first time; a middle aged couple are torn apart when the husband repeatedly cheats on his wife; a couple who have been married for decades try to spice up their marriage by playing special games; and a grandmother tries to find another woman to take care of her husband after discovering she has a terminal illness. 

This is not the first time that young Chinese have rebelled against Valentine's Day. In the 1990s, they created "Singles Day" to be celebrated each year on November 11 (11/11) because of the four 1's in the date. There was a particularly big Singles Day celebration in 2011 on 11/11/11. Shanghaiist and Global Times (Beijing)

Greece's unemployment reaches new record high

Greece's unemployment rate rose further to a new record high of 28% in November, according to the country's statistics agency ELSTAT (Hellenic Statistical Authority). Youth unemployment also reached a record high rate of 61.4%. Economists expect things to get worse in the early part of this year as companies continue to restructure and fire workers. Greek Reporter

European Union to 'mobilize' private savings for bailouts

The European Union is looking for ways to fund long-term investments, including bailout loans, by "mobilizing" private savings, which presumably means that private savings would be confiscated, as happened in the bailout of Cyprus last year. Also under consideration is a voluntary EU savings account, where investors could pool their money for investment in small companies. (The Obama administration has proposed a similar plan known as "MyRA".) 

This approach is being increasingly discussed. In a publication by the International Monetary Fund (IMF) in October of last year, the following appears on page 49 of the report "Taxing Times": 

The sharp deterioration of the public finances in many countries has revived interest in a "capital levy" -- a one-off tax on private wealth -- as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and -- until he changed his mind -- Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax -- on bondholders -- that also falls on nonresidents). 

There is a surprisingly large amount of experience to draw on, as such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II. Reviewed in Eichengreen (1990), this experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital flight -- in turn spurring inflation. The tax rates needed to bring down public debt to precrisis levels, moreover, are sizable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth.

In other words, confiscating people's assets and savings is most effective when it's a complete surprise so that people can't practice "extensive avoidance and capital flight." Reuters and Zero Hedge and International Monetary Fund (PDF)

2,500 couples marry in South Korea in pre-Valentine's Day ceremony

Korean couples prepare for marriage on Wednesday (AFP)
Korean couples prepare for marriage on Wednesday (AFP)

2,500 South Korean couples will be able to spend Valentine's Day in marital bliss, thanks to a mass wedding held on Wednesday by the Unification Church, founded by the late Sun Myung Moon. The mass weddings began in the 1960s with only a few couples, but they reached a peak in 1997 with 30,000 couples. Many of the couples met only a few hours before the wedding, having been personally matched by Sun Myung Moon or, since his death, by his widow. However, marriage won't be TOO blissful on Valentine's Day, since the couple must promise to refrain from sexual relations for at least 40 days after marriage. 

South Korea isn't the only country holding mass weddings. In Pakistan, a charitable organization donated dowries to 70 poor young women in Punjab, allowing them all to finally get married in a mass wedding. In Nigeria, a mass wedding program was launched in 2012 to enforce Islamic law by helping single people pair up. The Nigerian government provides each bride with a dowry and utensils. AFP and Global Post

KEYS: Generational Dynamics, Valentine's Day, Shanghai, China, Beijing Love Story, Singles Day, Greece, ELSTAT, Hellenic Statistical Authority, European Union, Cyprus, International Monetary Fund, IMF, South Korea, Unification Church, Sun Myung Moon, Pakistan, Nigeria 

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