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

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 WorldView! 

‘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 yearand who describes himself as a “computer nerd” has found a unique wayto ruin Valentine’s Day for numerous other couples in Shanghai. Anycouple wanting to go to the cinema to see the popular movie BeijingLove Story will have to split up. Using crowdfunding, “UP” collectedenough money from “brilliant, bitter singles” to purchase tickets toall the odd-numbered seats in the theatre, so that any lovers wantingto see the movie will have to sit at least one seat apart from eachother. 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 growfonder. Give us singles a chance.

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

This is not the first time that young Chinese have rebelled againstValentine’s Day. In the 1990s, they created “Singles Day” to becelebrated each year on November 11 (11/11) because of the four 1’s inthe date. There was a particularly big Singles Day celebration in2011 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% inNovember, according to the country’s statistics agency ELSTAT(Hellenic Statistical Authority). Youth unemployment also reached arecord high rate of 61.4%. Economists expect things to get worse inthe early part of this year as companies continue to restructure andfire 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, whichpresumably means that private savings would be confiscated, ashappened in the bailout of Cyprus last year. Also under considerationis a voluntary EU savings account, where investors could pool theirmoney for investment in small companies. (The Obama administrationhas proposed a similar plan known as “MyRA”.) 

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

The sharp deterioration of the public finances inmany countries has revived interest in a “capital levy” — aone-off tax on private wealth — as an exceptional measure torestore debt sustainability. The appeal is that such a tax, if itis implemented before avoidance is possible and there is a beliefthat it will never be repeated, does not distort behavior (and maybe seen by some as fair). There have been illustrious supporters,including Pigou, Ricardo, Schumpeter, and — until he changed hismind — Keynes. The conditions for success are strong, but alsoneed to be weighed against the risks of the alternatives, whichinclude repudiating public debt or inflating it away (these, inturn, 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, assuch levies were widely adopted in Europe after World War I and inGermany and Japan after World War II. Reviewed in Eichengreen(1990), this experience suggests that more notable than any lossof credibility was a simple failure to achieve debt reduction,largely because the delay in introduction gave space for extensiveavoidance and capital flight — in turn spurring inflation. Thetax rates needed to bring down public debt to precrisis levels,moreover, are sizable: reducing debt ratios to end-2007 levelswould require (for a sample of 15 euro area countries) a tax rateof about 10 percent on households with positive netwealth.

In other words, confiscating people’s assets and savings is mosteffective when it’s a complete surprise so that people can’t practice

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 inmarital bliss, thanks to a mass wedding held on Wednesday by theUnification Church, founded by the late Sun Myung Moon. The massweddings began in the 1960s with only a few couples, but they reacheda peak in 1997 with 30,000 couples. Many of the couples met only afew hours before the wedding, having been personally matched by SunMyung Moon or, since his death, by his widow. However, marriage won’tbe TOO blissful on Valentine’s Day, since the couple must promise torefrain from sexual relations for at least 40 days after marriage. 

South Korea isn’t the only country holding mass weddings. InPakistan, a charitable organization donated dowries to 70 poor youngwomen in Punjab, allowing them all to finally get married in a masswedding. In Nigeria, a mass wedding program was launched in 2012 toenforce Islamic law by helping single people pair up. The Nigeriangovernment 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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