Eurozone - A crisis waiting to happen?

French colleagues around at the time report that General de Gaulle was a man of few words; one of them being "Non" But he wasn't averse to soundbites: "How can you govern a country which makes 146 types of cheese?"

Imagine how much harder it is for the European Union with a domain stretching from the Baltic to the Aegean. Election results in France and Greece demonstrate there is no longer an appetite for austerity and despite scolding from Chancellor Merkel, the days of the complete Eurozone could be numbered, with some members taking an early exit.

It started well; after World War II the desire was to co-operate not fight. We had the ECSC, EFTA, then the EU: lots of initials, little actual co-operation. So how could the venerable ideal of a European Union become so unstuck?

Fuelling The Crisis?

A World War Two poster issued by the Information Ministry around the time of the Blitz is now re-doing the rounds on t-shirts, coffee mugs and even duvet covers. It reads very simply: ‘Keep Calm and Carry On’. Some things never go out of fashion. Compare that with the conflicting messaging coming out of the UK Government last week on possible petrol shortages even before a strike had been called.

The tanker driver issue has been bubbling on for over a year, so following classic crisis theory, Ministers should have known and been prepared. It's called 'horizon scanning'; an early warning system of problems ahead. There should also have been a unified management plan with agreed communication objectives, delivery system and of course, key messages.

On a wing and another prayer

Perhaps the best soundbite to emerge out of the protest outside St Paul's Cathedral came at the weekend from Ken Costa, former chairman of Lazard's Investment Bank who has been tasked by the church to head a group looking at what can be done about the issues which have been highlighted. He is, he said, looking to reconnect "the financial with the ethical." And he goes on to argue that maximising shareholder returns should no longer be the sole criteria for judging how a company is run (or sins).

Sterling stuff but there is still a whiff of a church trying to catch up. The structure of the Church does not allow a command and control system in the normal form, so the fragmented system in place has allowed the Cathedral response to appear disjointed. The Archbishop of Canterbury has, in the word of one commentator, broken his silence and attempted to rest control of the agenda; it was a rudderless ship with events taking over.

On a wing and a prayer

To lose one cleric may be regarded as a misfortune; to lose two looks like carelessness. (With apologies to Oscar Wilde.) St Paul's has now lost its Dean, following on from the resignation of the Canon. All driven by confusion of how to deal with the anti-capitalist protest on the doorstep.

To be fair it is hard for a symbol of the established church in England to come up with a coherent way of dealing with an event which has managed to close the doors of St Paul's with a subsequent loss of revenue and international prestige. Hard, but not impossible.

Goodnight Irene

For a reader whose memory stretches back into the 1980s, you might recall the above track from Dexy's Midnight Runners. Over the weekend it was turned into a slogan by some residents of the US East Coast who refused to evacuate in the face of the hurricane. “Come on, Irene!” proclaimed the posters of the protesters. “We can cope” was the sub text.

As the hurricane, downgraded to a Cat 1 storm, moves on the inevitable questions are being asked. This was no Katrina so was there over-reaction by politicians and press?

Quote, Unquote

Economist John Maynard Keynes once said of the business cycle that in the long run all would be well. He added waspishly, "but in the long run we are all dead."

Watching last week's unraveling of the financial system he might have a point ... but this time in the short run. $2.5 trillion has been wiped off global stock exchanges. It has been the worse week in the markets since 2008 and Lehman Brothers.

And the response from government? As another economist J K Galbraith put it, "In the US though power corrupts, the expectation of power paralyzes." Barack Obama has been characterised as being well meaning but ineffectual. Things have hardly been any better in Europe.

Dipping below the radar

The word Radar … Radio Detection and Ranging … was coined by the Americans. Pity nobody shared it with US company News Corp. It has become self-evident that the Murdoch Empire did not have in place anything approaching a crisis management plan to deal with the fallout from the phone hacking scandal, which could still engulf the corporation. Leaving aside the issues of corporate governance, although the shareholders probably won't, it is extraordinary that seemingly nobody in the company was using radar to scan the horizon for potential incoming. After all, hacking is hardly new.

Perhaps even more extraordinary is that a media conglomerate seemed very unsure about how to deal with the media when the crisis broke. As we have pointed out before, summarily sacking 200 journalists who had nothing to do with the hacking does nothing to endear you to the Fourth Estate. There seemed to have been no joined up thinking. Do we appear before the Select Committee or stay away? How do we deal with the BSkyB bid? What are the key messages? Surely, it wasn’t just us who knew nothing about it?