《大学英语》课程综合教程教学资源（外刊选读）Financial Times -15-05-25

FINANCIAL TIMESMenday 25 Mey 2015INTERNATIONALnsurgencyReferendum.Same-sex unionColombia'sIrish surprise themselves in marriage voteSantos callsforpeacetalksResult undermines stereotypeto accelerateofa conservativenationheldin thrall to the CatholicchurchOTtinAmercanaporadeorr9ohashlThisisthoendoftheararhaicehithahilmectnowwheorthemPilgrims hail archbishop but gang warsEVERY FT,put thepeacehediedfor out ofreachEVERYWHEREThe FT ePaper.Free with yournewspapersubscriptioronsonhethRead the FT wherever you are, even on dayswhen it isn'tpublished.TheePapergivesyouthenewspaper inahandydownloadabform.so you can read it wheneveryoulikeon any devidawhoeasy.enjoyableanceetooursubscriberVisitft.com/epapertoreadordownloacittodayT5ROMEROVIFINANCIALTIMESItiswhatyouknow

6 ★ FINANCIAL TIMES Monday 25 May 2015 INTERNATIONAL ANDRES SCHIPANI — BOGOTÁ Juan Manuel Santos, Colombia’s president, has called for the speed￾ing-up of negotiations with Marxist rebels aimed at ending Latin America’s oldestguerrillainsurgency. The announcement comes amid recent attacks by both sides in the five-decade￾long conflict. Last week, an air strike killed over two dozen members of the Revolutionary Armed Forces of Colom￾bia (Farc) in the southwestern region of Cauca. On Saturday, another eight guer￾rillas were killed and yesterday a police officerdiedinabombattack. “We have to make decisions to stop this war as soon as possible and I’m readytoacceleratenegotiationstoreach a final and definitive bilateral ceasefire asquicklyaspossible,”MrSantossaid. Last week, in retaliation for the first attack, the rebels lifted their six-month unilateral armistice. “The suspension of the unilateral ceasefire was not in our sights,” the Farc said in a statement late on Friday, “but the incoherence of San￾tos’governmenthasachievedit.” A month ago Farc killed 11 soldiers, prompting Mr Santos to restart bomb￾ing raids on Farc camps, which he had frozen to help peace talks in Cuba that havegoneonformorethantwoyears. Both sides have agreed on three of the five points in the peace agenda, and sen￾ior security advisers say Farc leaders are aware this is the best chance to end a warthathaskilledmorethan200,000. Cerac,arespectedsecuritythink-tank inBogotá,saidinareport:“Wemaintain our consideration that the negotiation process is irreversible. Notwithstand￾ing, this consideration is subject to the scale and nature of the violence that we willfaceinthenearfuture.” Resumption of Farc hostilities would takeatollonenergyinfrastructure,ana￾lysts say, in an economic blow to Latin America’sfourth-largestoilproducer. Insurgency Colombia’s Santos calls for peace talks to accelerate VINCENT BOLAND — DUBLIN Irish people tend not to go in for social revolutions; they prefer to leave those things to the Americans and the French. In the immortal words of the fictional television priest Father Ted, “Down withthissortofthing.” YettheIrishwokeupyesterdaytofind themselves dominating the world’s news headlines after their resounding endorsement of same-sex marriage, becoming the first country to support it in a popular vote. The scale of the endorsement — 62 per cent of voters said Yes in Friday’s referendum, in an unusually high turnout — has not only surprised the rest of the world, however. IthassurprisedtheIrishthemselves. “We are a small country with a big message,” said Enda Kenny, the prime minister,orTaoiseach. The embrace of same-sex marriage turns on its head the old stereotype of the Irish as a conservative nation where the values of the Catholic church have always set the pace of social change. This has not been true for two decades, but some political and religious leaders may have underestimated the extent of the transformation of Irish society in those years. After the referendum, they will have no choice but to accommodate themselvestoit. The biggest loser from the referen￾dum is the Catholic church. The institu￾tion that more than any other has shaped the cultural and social values of the Republic over nearly a century has seen its authority diminished over the past 20 years after a series of revelations of the sexual abuse of children by priests, and of the way the church cov￾eredupthecrimes. The Irish church’s leadership never fully appreciated how completely it failed many Irish children whose par￾ents were once unquestioning believers in its authority. A lot of the voters who endorsedsame-sexmarriagewerethose now-grown-up children and their friends and families. Only a handful of them might be gay, but the referendum was a rare and collective opportunity to announce the end of an unequal and damagingbalanceofpower. “This marks the end of the narrative of the last 90 years where Irish people were happy to have had their values cre￾atedandpasseddowntothembypeople who claimed to know what was best for them,” says Colm O’Gorman, head of Amnesty International in Ireland, who was a leading Yes campaigner and is a survivorofclericalabuse. Speaking on RTE, a weary-looking Diarmuid Martin, the archbishop of Dublin, acknowledged as much. “It is very clear that if this referendum is an affirmation of the views of young peo￾ple, then the church has a huge task in front of it to find the language to be able to talk to and to get its message across to young people, not just on this issue but ingeneral,”hesaid. There is anotherreason why the Irish embraced same-sex marriage. This is the increased visibility of gay people in Ireland — from sports stars such as Donal Óg Cusack, the hurler, to health minister Leo Varadkar, novelist Colm Tóibín and other public figures such as musiciansandnewsanchors. The gay-rights campaigner Senator David Norris says the Irish have always been more accepting of difference than their leaders. Aodhán Ó’Ríordáin, the equality minister, says voters have “rejected that judgmental, Pharisee mentality that used to tut-tut at people” becausetheyweredifferent. There is no doubt that Irish people are feeling good about themselves after the same-sex marriage referendum. There is now likely to be a scramble among political leaders to claim credit for that feelgood factor — the first time it has been palpable on the streets since the collapse of the Celtic Tiger economy sevenyearsago. All the main parties supported the referendum, although it was the initia￾tive of the Labour party, the junior part￾nerinMrKenny’scentre-rightcoalition, which was seeking an issue to differenti￾ate itself in government. The Taoiseach was initially wary of its implications. With less than a year before the next general election must be held, he may nowbetemptedtoseekanearlypoll. However, his Fine Gael party lost a by￾election in the heartland farming coun￾ties of Carlow and Kilkenny on the same day as the referendum.Voters, it seems, canstrikeintwodirectionsatonce. Referendum. Same-sex union Irish surprise themselves in marriage vote Result undermines stereotype of a conservative nation held in thrall to the Catholic church Irish eyes: People in Dublin react to the news that Ireland has voted to endorse gay marriage Cathal McNaughton/Reuters ‘This is the end of the narrative where the Irish were happy to have their values created by people who claimed to know what was best for them’ JUDE WEBBER — SAN SALVADOR Thirty-five years after the archbishop of San Salvador was gunned down by a rightwing death squad while celebrat￾ing mass, Oscar Romero was formally declareda saint-in-the-making. Amid balloons, banners and a sea of cel￾ebratory T-shirts, some 300,000 pil￾grims gathered under the blazing sun to witness Saturday’s beatification cere￾mony. Many among the congregation felt the honour was long overdue for a priest who had spoken out against the military regime, poverty, social injus￾tice,assassinationsandtorture. On the eve of his murder, Romero uttered the words that many believe sealed his death: “I beg you, I beseech you, I order you in the name of God,” he urged security forces. “Stop the repression.” Butwithanaverageof22deathsaday, and May shaping up to be the most vio￾lent month in a decade, the peace Romero prayed for looks elusive in El Salvador. Violence between two brutal gangs, the Mara Salvatrucha, or MS-13, and Barrio 18, has escalated into what Insight Crime, a consultancy, describes as a “low-intensity war” of ever greater confrontation with security forces since lastyear’scollapseofagangtruce. In a video purporting to be a united message from the two gangs to the gov￾ernment that was aired on social media last month, a masked figure brandish￾ing an AK-47 says they are preparing for “dialogue or war”. For the leftist govern￾ment,whichlastweekdeployedthefirst of its new anti-gang battalions to quell violence, the choice is stark, the black￾clad figure says: “Talks or lead — you decide.” Juan José Valle, a gardener in Altavista, a poor neighbourhood on the outskirts of the capital in the grip of the Barrio 18, says the violence is worse now than during the 12-year civil war that intensified following Romero’s murder, claiming 75,000 lives. “I can’t go to the bakery up there because that’s the other side’s turf,” he says, resigned to being “a prisoner” in his neighbourhood. “If I do, they’llgoaftermychildren.” Like most of the country, the run￾down periphery of San Salvador, where many houses have corrugated tin roofs and lookouts with mobile phonesloiter in side alleys and on street corners, has been carved up by the gangs. They label their territories “letters” — MS — or “numbers”—18. San Salvador has an estimated 20,000 or more gang members, many sucked into crime by the dearth of jobs and opportunities. “Here it’s a crime to be young,” says Berta Alvarez, a shopkeeper in the Villa Lourdes neighbourhood. “It’s only the youngwhodie.” Allegiances can switch within a mat￾ter of streets; the gangs mark their turf withgraffitionvirtuallyallthewallsand bykilling rivalswhodaretoventureinto their territory as well as locals who fail to pay the extortion money, or “rent”, thatthegangsdemand. “You have to see, hear and shut up,” MrVallesays. But some say the state security forces are little better. Alma Elizabeth Gómez, who runs a small shop in Campos Ver￾des, another Barrio 18 bastion, says police threatened her after her daughter reportedastolenphone. “I got a call telling me that if I didn’t hand over $500 that day, they’d kill my children,” she recalls. “It wasn’t the voice of a bicho,” she adds, using the nickname — “bug” — that is commonly used to describe gang members. “It wasn’t their slang. Here, you can’t even trusttheauthorities.” Faced with nearly 2,000 murdersthis year, President Salvador Sánchez Cerén, a former leftist guerrilla leader, has pro￾moted a Safe El Salvador Plan, including social policies. The president has inflamed tensions by moving some sen￾ior gang bosses back to the high security Zacatecoluca prison in the south, dubbed “Zacatraz”, after they were moved to ordinary jails during the truce. But hisstrategy of taking on the gangs may backfire, warns José Miguel Cruz, an expert on gangs at Florida Interna￾tional University. “The anti-gang battal￾ions the government has begun to deploy are a tactic that has failed in the past . . . I don’t think it’s going to work. It’s just going to escalate the conflict with gangs attacking the military and policeofficers,”hesays. Many, like Ms Gómez, one of El Salva￾dor’s growing number of evangelical Christians, believe the answer is in prayer. It is a sentiment shared by Monsignor Rafael Urrutia, who has long pressed the case for beatification of the assassinated archbishop despite Vatican concerns his sympathies were Marxist. Pope Francis finally speeded up the process on his election. “I think the intercession of Msgr Romero can help us reach peace,” he says. El Salvador Pilgrims hail archbishop but gang wars put the peace he diedfor out of reach Catholics celebrate the beatification of the slain Archbishop Romero — AFP/AP 300,000 Number of people who attended Oscar Romero’s beatification 22 Average number of deaths a day in El Salvador MAY 25 2015 Section:World Time: 24/5/2015 - 18:25 User: jamesa Page Name: WORLD3, Part,Page,Edition: LON, 6, 1

FINANCIAL TIMESMonday 25 May 2015FT BIG READ.HAITILargeparts ofthecapital,Port-au-Prince,havebeen rebuilt sincethedevastating2010earthquake,but itisprovingmoredifficultto install theinstitutions needed to ensurethecountry's economicfuture.ByAndrewJackandAndresSchipanimal:23000hmtrepRisingfromtherubble1ntmanrhaeteinalat-ouearaFmnesraaldasawToise.Fallingbehindm-hie..heontheinhiDorshoaitionvthAmeritatitianDominican Republic set todeportthousandstoHaitiSlic halThloahtahaen19ettT:ni

Monday 25 May 2015 ★ FINANCIAL TIMES 7 Large parts of the capital, Port-au-Prince, have been rebuilt since the devastating 2010 earthquake, but it is proving more difficult to install the institutions needed to ensure the country’s economic future. By AndrewJack and Andres Schipani Time is running out for Timothée, who stands on the Dominican Republic side of the border bridge at Dajabon, awaiting buyers for the cheap goods in his rickety wheelbarrow. An ethnic Haitian, he was born in the Dominican Republic but has no way to prove it. “I feel Dominican, I am Dominican,” he says. “But soon, I could be left without the little I have and be sent to Haiti because I have none of the documents they ask for.” The two countries on Hispaniola share a tumultuous history, exemplified by the River Massacre flowing beneath him, where bodies were dumped after the killing of thousands of Haitians in 1937. Today, relations between the countries are again straining. The Dominican Republic has long considered anyone born in the country a national. But its Constitutional Court ruled in 2013 that children of immigrants do not qualify. Among those affected are the children of Haitian migrants, some of whom do not speak its national languages of Creole and French. “There are thousands of ethnic Haitians who consider themselves Dominicans but are at risk of becoming stateless,” says Gregoire Goodstein, chief of the International Organisation for Migration in Haiti. The deadline for expulsions is June 17 and up to 220,000 people — among the 800,000 Haitians living in the more prosperous Dominican Republic — are at risk of becoming stateless. Another 300,000 may be expelled as illegals. The government of President Danilo Medina appears to have increased repatriations of people of Haitian descent, says Michel Alcimé, coordinator of Solidarite Fwontalyè, a rights group, pointing to 512 cases in a single day in March. “There have been abuses, flags have been burnt, a murdered Haitian was hanged from a tree,” he says. “There are people adding fuel to the fire with extremist rhetoric.” A potential mass deportation could turn nasty by the hurricane season at the start of the summer, warns Mr Goodstein: “When it floods municipal authorities can hardly accommodate those locally displaced. If we add thousands of migrants forcibly returned from the Dominican Republic, we could face a serious crisis.” Little neighbourly love Dominican Republic set to deport thousands to Haiti A t first glance, the Iron Mar￾ket in Port-au-Prince is a monumenttoarenaissance in Haiti. With its restored Victorian-era brickwork and metal roof shielding dozens of bus￾tling vendors from the sun, it symbol￾isesrenewedenergyandinvestmentina country devastated just five years ago by an earthquake so severe it left 230,000 people dead. Yet the building with four minarets at the heart of the capital also highlights the frailty of the country and its continued dependence onfickleforeigninfluence. Bought in France in the late-19th cen￾tury, the historic structure fell into dis￾repair long before 2010. Restored after the earthquake with an $18m donation from Denis O’Brien, an Irish telecoms entrepreneur, the reopened market was inaugurated in 2011 by former US Presi￾dentBillClinton. Away from the shadow of the beauti￾ful façade however, and despite other signs of progress, Haiti remains one of the poorest countries in the world. A World Bank study in April revealed that a quarter of the 10m population live on lessthan$1.23aday There are, however,signs of fresh eco￾nomic activity and political reform, from the recently opened Marriott Hotel hosting foreign business visitors to higher attendance in newly-built state schools and government subsidies for private ones. They signal substantial evolution since the tremors in 2010 that left 1.5m people homeless and destroyed thousands of buildings across thecity. “This government has made tremen￾dous progress,” says Wilson Laleau, minister of finance since 2011. “In four years, there have been an enormous number of things that have changed. We have built roads, bridges and more than 100 schools. There are projects in every community of the republic. Haiti willre-emerge.” The question for local people, bracing for fresh elections this summer, is not if Haiti can repair the short-term physical damage of the earthquake. Instead they want to know whether it can free itself from the cycle of weakness and depend￾ency that contributedto the devastation of the earthquake in the first place: the decades of neglect, weak institutions andthevagariesofforeigninterference. At the same time Haiti faces waning foreign assistance and competition for investment— including from its north￾ern neighbour Cuba following its rap￾prochementwiththeUS. “What I see is lots of talk and good public relations,” says Robert Maguire, professor of the Practice of Interna￾tional Affairs at George Washington University in the US. “If you look at Haiti’s history, those with economic power have always used it for their own benefit and those with political power haveusedittogetaccesstothestate.” Falling behind One striking contrast is with the Domin￾ican Republic, Haiti’s far richer eastern neighbour,with which it shares the Car￾ibbean island of Hispaniola. While both share a heritage of slavery, dictatorship and instability, the Dominican Republic has emerged as far more prosperous over the past half century.In 1960, Haiti had the same income per capita as the Dominican Republic. Since then, the fig￾ure has trebled for its next door neigh￾bourwhileithashalvedforHaiti. JaredDiamond,aprofessorattheUni￾versity of California, Los Angeles, sug￾gested in his book Collapsethat the dif￾ference is down to geography. Haiti’s greater population density in a smaller space, he argues, combined with lower rainfall, less fertile soil and land more difficult to cultivate, led to greater deforestation and declining agricultural productivity. Others point to history. While the Dominican Republic was a Spanish col￾ony that continued to attract invest￾ment and immigration, Haiti was iso￾lated after its fight for independence from France as the world’s first black state in 1804. Yet it continued to be manipulated by foreign powers, from Paris’s continued demands for debt repayment to more recent military interventionsbytheUS. While the Dominican Republic bal￾anced inward investment with authori￾tarianism, even after the assassination of President Rafael Trujillo in 1961, Haiti fell under the more repressive, inward-looking control of Francois “Papa doc” Duvalier and his son “Baby doc” from 1957 until 1986. Many citi￾zens went into exile, depriving their homeland of talent and energy while creating a thriving 4m-strong diaspora intheUS,CanadaandFrance. The period after Jean-Claude Duval￾lier fled in 1986, was littered with putsches and the overthrow of elected leaders including Jean-Bertrand Aris￾tide, who was twice deposed. Leslie Vol￾taire, a former official in his administra￾tion, says: “We had two centuries of oppression for the majority, followed by two decades [up to the mid-2000s] of liberationwithnoorder.” The diaspora still provides one-fifth of national income through some $2bn in remittances sent home to support families. Foreign assistance provides nearly the same proportion again, over￾shadowing the country’s internally-gen￾erated resources and, say observers, underminingitsgovernancesystems. InJanuary,HaitianspicketedtheClin￾ton Foundation in New York to express frustration at what they see as a lack of progress despite billions of dollars pledged since the earthquake. They argue high-profile projects backed by the Foundation, including the Caracol industrial park and the Marriott hotel, have progressed slowly and favoured foreign investors and the country’s elite morethanitsimpoverishedmajority. “However much foreign assistance pours in, there is little chance of Haiti getting on a solid track unless the state can perform its basic functions,” says Michael Shifter, president of Inter￾American Dialogue, a US think-tank. “It can’t be supplanted by other players, evenwell-intentionedones.” Optimists point to significant progress in Haiti since 2010, not least in infrastructure. In 2011, Michel Martelly, a colourful local singer, became presi￾dent, signalling one of the first peaceful political transitions since Haiti’s inde￾pendence. But his relations with parlia￾ment were tense from the start, with a deadlock on legislative reform that led to the dissolution of the National Assembly last year and rule by presi￾dential decree. New elections have now been scheduled for August and a presi￾dentialraceinOctober. Elsewhere security has been stepped up; there has been active encourage￾ment of tourism and textiles — the country’s main export; and building of roadsandlocalcommunityfacilities. Donor shortage Yet Haiti faces obstacles to future growth. One is identifying fresh sources of income. Its tax base remains low, sup￾port from the diaspora is stagnant and moneyfromdonorsisrunningout. “The international community has moved on to other crises like Ebola so Haiti is no longer a priority,” says Gregoire Goodstein, the local head of mission of the International Organisa￾tionforMigration. Annual aid of $1bn before the earth￾quaketrebledafterwardsbutisnowfall￾ing. Agustín Aguerre, head of the Haiti office of the Inter-American Develop￾ment Bank, says: “Some countries have reduced contributions and it’s getting tougher to get new commitments given other crises and tighter economies. Oth￾ers have commitments until 2020. The big question is what happens in 2021? How do we move from a donor-funded economy to a sustainable one managed andgeneratedbyHaitians?” Missedopportunity The largest single windfall for Mr Mar￾telly has been PetroCaribe, a subsidised oil programme provided by Venezuela since 2008, which has added $400m a year to the government budget. Despite some debt forgiveness in 2010, its struc￾ture means the fall in global oil prices has increased repayment terms for Haiti. But with Venezuela now strug￾gling economically, many believe the programmeisunderthreat. Gregory Brandt, chairman of the Pri￾vate Sector Economic Forum, repre￾senting a number of leading companies, says the country is going backwards: “The image of Haiti has improved over the past five years, but if you scratch beneath the surface we are back [in the same place we were in before]the earth￾quake . . . We had a window of opportu￾nity but now Cuba is opening up, the moneywillflyoverustothere.” At less than $200m a year, foreign investment remains modest and unbal￾anced, blocked by heavy bureaucracy, opaque land ownership, and poor qual￾ity roads, electricity and water supplies. “You have Digicel [a telecoms provider owned by Mr O’Brien], Heineken and SeaA [a Korean textiles plant]. There is no number four [investor],” says one internationalofficial. Mostformalemploymentcomesfrom agriculture and low-paid, unskilled work in textile plants. A significant pro￾portion of the economy is still held in the hands of around a dozen local fami￾lies, who have long been viewed as power brokers influencing policy to limit diversification or competition. There are few foreign bankers and local lendingtermsarehigh. There is scant investment in farming and Haiti, which was once self-reliant for rice, is now dependent on purchases from abroad. Domestic production is also under pressure from cut-price chicken, eggs and other products importedfromtheUSandacrossitsbor￾derwiththeDominicanRepublic. Amore fundamental issue for Haiti is its weak institutions: notably the judici￾ary, and checks and balances on the gov￾ernment, which is widely accused of opacity and corruption. Sophie de Caen, chief of the UN Development Pro￾gramme, says: “Investment needs the ruleoflaw.Thereisalongwaytogo.” “Mr Martelly focused on constructing buildings rather than institutions,” says Mr Voltaire. He points to an unusually frank report released by Haiti’s Public Accounts Chamber, which highlighted a lack of transparency around the distri￾butionofPetroCaribefunds.Italsohigh￾lighted how most construction con￾tracts were awarded by the state to a small group of companies without ten￾ders, and that the work was often not completed. Maryse Narcisse, a politician close to Mr Aristide who plans to stand in the presidential elections, calls the report “alarming” and Mr Martelly’s legacy “catastrophic” for Haitians. She warns: “The new governmentwill face a disas￾troussituation.” Many post-earthquake construction projects remain unfinished. But Lau￾rent Lamothe, who was forced out as prime ministerlast year, argues that his administration did what it could to address themost urgent problems after thedisaster. “You do what you can with what you have. The whole country had crumbled, with no construction in years. It was development on a shoestring,” says Mr Lamothe who is standing forthe presi￾dency.“Institution-buildingtakestime.” Risingfrom the rubble FT BIG READ. HAITI Then and now: The Iron Market in Port-au￾Prince after the 2010 disaster and today — Mario Tama/Getty; Allison Shelley/Getty Caribbean Sea VENEZUELA DOMINICAN REPUBLIC COLOMBIA CUBA PUERTO RICO HAITI JAMAICA 200 km Santo Domingo Port-au￾Prince Migrant remittances Source: World Bank % of GDP, 2013 0 5 10 15 20 Haiti Jamaica São Tome and Principe Dominican Republic St Kitts and Nevis Dominica Grenada St Lucia Antigua and Barbuda Trinidad and Tobago GDP per capita Current $, ’000 0 2 4 6 8 10 12 14 16 1960 70 80 90 2000 13 Haiti Dominican Republic Antigua and Barbuda Caribbean small states Jamaica Latin America & Caribbean Aftershocks The 2010 earthquake left 230,000 people dead and 1.5m homeless — a quarter of the 10m population still live on $1.23 per day Funding battle Haiti faces fresh competition for future investment flows — including from its northern neighbour Cuba Under threat A subsidised oil scheme, PetroCaribe, provided by Venezuela, has added $400m a year to Haiti’s budget but may not be renewed MAY 25 2015 Section:Features Time: 24/5/2015 - 19:22 User: allenk Page Name: BIGPAGE, Part,Page,Edition: LON, 7, 1

FINANCIAL TIMESLettersIirdide davtinRegulator's report onBanksbetrayinvestorsas wellasfinancial sectorHBOSislongoverdueotre stage of theanasFINANCIALTIMES"Without fearand without favourMONDAY.25 MAY 2015America'sdisappointingblish ieconomicrecoveryUSFedomthaatrmraddatreportgrowth in Big Pharmaakif.eeneSurreve.YetiReferendum debate needsrkingiairandclearvoicesnenaim1cehertofinfeatohotfsethepieoTrecoupinaaeshaveloeerjse, BedgiunDisplays of empathy helprdefuse a reputational crisisoughconseauencesofGreectanrhoiwastWarsaw deprived ofa glutatheritop-endrestaurantsodhaelEernaRNC.USA level playing fieldThe cashless society isrbete.Belgihundreds of years awaybenefits football's eliteEuropean business alwaysSir, You report that total casuffers from uncertaintiesUefa'sfinancialfairplayrulewell-meaningbuWellitfaAdramatictakeon theprospectofBrexitHmcismtingthrsatetheBook reviewBy Vincent BolandlesthaloulningtheprospecSoTmwhimits thatenablet00Endg,But the authors admiar(again)fortheslteontha

8 ★ FINANCIAL TIMES Monday 25 May 2015 Letters MONDAY 25 MAY 2015 Email: letters.editor@ft.com or Fax: +44 (0) 20 7873 5938 Include daytime telephone number and full address Corrections: corrections@ft.com In Samuel Beckett’s play, Endgame, one of the two main charactersis unable to stand up and the other is unable to sit down. As a metaphorfor the lopsided relations between the UK and the EU, it sums up perfectly their inability to see eye to eye. It is not for nothing that the editors of Britain and Europe: The Endgame— An Irish Perspectiveraided Beckett for theirtitle. The authors of this clear￾eyed, comprehensive, historically informed and not entirely unsympathetic set of musings, on why the British are so prickly about the EU and what can be done about it, believe the issue is now so serious that both sides are indeed at the endgame. A referendum on the UK’s membership islikely now that the election is over, with the outcome uncertain. “What’s happening now is not just another episode in the saga but its closing scene,” writes Dáithí O’Ceallaigh, Irish ambassador in London from 2001 to 2007.(His co￾editor, Paul Gillespie, is a former Irish Timesforeign policy editor.) That is a downbeat opening assessment of the prospect of a British withdrawal from the EU. But the authorsjustify it. Britain, they argue, can have one of fourfuture relationships with Europe: fully in, half in, half out and fully out. While the second and third scenarios may be the best achievable in present circumstances, the fourth is more likely than the first. It is a given in this book— and in official circlesin Dublin —that a UK withdrawal from the EU is emphatically not in Irish interests. It could revive the border between the Republic and Northern Ireland — which, while largely symbolic today, is still a legal and political fact. It would complicate trading relations, which are flourishing. It would erect an invisible but awkward barrier between two countries with centuries of cultural, social and other ties. And it could undermine the brittle but enduring peace in the north. The authors’ purpose is to show how the UK and the EU arrived here, and how they can retreat from it. On the latter their argument is that it is worth the EU’s while to make it worth Britain’s while to remain a member, even if a semi-detached one. And Ireland, they argue, can play a critical role in facilitating this outcome. They cite three occasions on which the Irish brokered compromises at European summits that enabled British prime ministers to snatch successfrom the jaws of defeat: for Harold Wilson in 1975; Margaret Thatcher in 1984; and John Major in 1991. Moreover, many EU countries and the Brusselsinstitutions “trust Ireland’s bona fidesin the search for a compromise and would accept its interpretation of UK policy”. Brokering a new relationship between the UK and the EU will be a formidable challenge for Ireland’s diplomatsin London and Brussels. The EU isshrinking to its core in the eurozone, which the UK looks unlikely ever to join. But the authors suggest a strategy: creating complementary “cores” on issues close to UK interests such as capital markets, security and energy. In other words, offer the British incentives to remain in the EU. This raises two questions. Willsuch incentives be enough not just to keep Britain in but to change itsrelations with Brusselsfrom antagonism to constructive engagement? And do the authors overstate their case that Brexit would be a disasterfor Ireland? There are some in Dublin who think England’s latest difficulty will be Ireland’s opportunity— perhaps even reopening the prospect of a united island. The resurgence of the Scottish National party after the UK election suggests that, despite the SNP’s defeat on independence for Scotland, the future of the union is again in question. Scotland leaves the UK and the rump UK is outside the EU. One of the strengths of the Irish position on the UK and Europe, and of this book, is that they give the British a fair hearing. But the authors admit much is uncertain. They raid Beckett(again) for the best way to express this sense of foreboding about something important but unknown, with the exchange between Hamm and Clov, the two characters mentioned above. Hamm asks: “What’s happening?” Clov replies: “Something is taking its course.” Does Prime Minister David Cameron, with his enhanced electoral mandate, have a better answer? A dramatictake onthe prospect of Brexit Book review By Vincent Boland Britain and Europe: Britain and Europ The Endgame An Irish perspective Edited by Dáithí O’Ceallaigh and Paul Gillespie (Institute of International and European Affairs, free download) Well,itwas a niceidea. LastweekUefa, the association of European football governing bodies, signalled it would be watering down the “financialfair play” lawsithasbeen phasinginover the past fewyears. The rules, which limited clubs’ abil￾ity to run at a loss, were aimed at the worthwhile goal of safeguarding their financial resilience.Butwhether or not they actually contributed to that end, they had the serious drawback of entrenchingan existing elite. Someofthe rules, suchasmonitoring of clubs to ensure prompt payment of salaries and taxes, are unobjectionable and should be retained. But when it comes to the strict break-even require￾ments, Uefa is right to pull back from theinitiativeandthinkagain. The principle of the rules was clear. By forcing clubs to break even, they aimed to prevent overspending and putting their solvency in jeopardy. In practice, because they did not count injections of owners’ cash as revenue, they have disadvantaged teams whose benefactorswishto subsidise theirsuc￾cess. Under the rules, Manchester City in the English Premier League and Paris Saint-Germain in the French Ligue 1, bankrolled respectively by the ruling families of the United Arab Emirates and Qatar, have been hit by potentially large fines and restrictions onfieldingplayers. This doesnotmakemuchsense.Uefa can hardly argue that clubs with such beneficent owners are perilously close to financial collapse. Without allowing such injections of cash into previously underperforming teams, football will be only more dominated by elite clubs with an entrenched fan base and mar￾keting income, such as Manchester UnitedandRealMadrid. Manchester United have won the English Premier League a tedious 13 times in its 22 years of operation. Com￾petitionfrom their rivals across townis welcome. One way to have more clubs with self-sustaining revenue models is to allow their owners to invest in their teams. As it happens, the rules apply￾ing to the lower English leagues — which are in fact more susceptible to rogue chairmen overspending and driving clubs into bankruptcy — make more sense. The bottom two leagues of Englishfootball havefor some time had rules preventing clubs from spending more than a certain percentage oftheir turnover on wages. Crucially, however, that turnover can include donations and equity injections. Wealthy owners are thus able to pour money into their outfit to achieve success, enabling the riseof clubslikeFulham. If the football authorities really wanted to promote financial stability and competition, they would need to move towards a model similar to the oval-ball US National Football League. The NFL has strict caps on salary bills, shares revenue between all teams, has no relegation or promotion and gives theworst-performing teams the pick of new players in the subsequent season. But it is a practical impossibility in Europeanfootball,whereitwould have tobeintroducedsimultaneously across all national leagues to prevent one being able to poach allthe best players fromtheothers. It is too late to adopt US-style social￾ism-in-one-sport for European foot￾ball. Nor does Uefa start with a blank slate: itmust take account of the finan￾cial dominance of a small number of elite clubs. Better to accept that the sugar-daddy model of ownership is here to stay and try to foster competi￾tion within it than imposing rules that aim to create stability but in fact merely entrench an elite. The financial fair play rules were well-intentioned buthave seriousdrawbacksin practice. Uefais right towater them down. Uefa’sfinancial fair play rules were well-meaning but misguided A level playing field benefits football’s elite The coming turn in US interest rates may be the most telegraphed in many cycles.Yet for all JanetYellen’s strivings at clarity, the US outlook remains clouded by poor visibility. Last week MsYellen said the Federal Reservewas still likely to raise interest rates this year— possiblyin September—in spite of the sharp slowdown in first-quarter US growth. For one reason or another, including a series of harsh winters, growth in the first three months ofthe year has tended to underperform the rest ofit, often heavily so. TheUS econ￾omy shrank by an annualised 2.9 per cent in the first quarter of 2014 only to rebound in the next three. Hopefully this year’s anaemic 0.2 per cent first quarter expansion will be equally mis￾leading. It would, however, be rash to make assumptions. It is quite possible 2015 will end as it began with US interest rates still on zero. As Ms Yellen put it: “Based on many years of making eco￾nomic projections, I can assure you that any specific projection I write down will turn out to be wrong, per￾hapsmarkedlyso.” Of course, there is a chance her expectations will be wrong on the upside. The Fed is forecasting US growth of 2.5 per cent for the next two years, which is only marginally above the tepid rates achieved since the start of the recovery, which is now about to enter its seventh year. Should unem￾ployment fall to 5per cent bythe endof 2015, wage growth may finally start to pick up, in which case the Fed will probably need to remove the punch bowl. The balance ofrisk is skewed the other way, however. After years of vir￾tually noincome growth,Main Streetis unprepared for positive shocks. It is, for instance, striking that that the US consumer has opted to pocket the recent gains from lower petrol prices rather than boost spending. The same applies to corporateinvestment,which remains disappointingly weak. The US economy’s key growth drivers each seem to be waiting for the other to move first. Investors are reluctant to invest and consumers are hesitant to spend. What will it take to stoke their animalspirits? Ms Yellen’s candour on the limits of what monetary policy can do is also striking. The Fed has kept its pedal to the floor for seven straight years. Yet US growth since the collapse of Leh￾man Brothers in 2008 has consistently undershot previous recoveries. According toHSBC, average US growth in the seven years from the previous peak was 3.5 per cent after 1981, 3.1 per cent after 1990, 2.1 per cent after 2000 and 1.1 per cent since 2007. The direction is unmistakable. Some economists are even talking of a “great reset” that will require the US to adjust downwards to Japan-stylegrowth.That is probably too gloomy. America has repaired its balance sheet far more rapidly than Japan did in 1990s and its demographic outlook is far healthier. The US also remains the mostinnovative economy in theworld. Yet the growth outlook remains checked by a very un-American sense ofpessimism. If, as expected, US growth rebounds in the next twoquarters,MsYellenmay have little choice but to raise rates in September or shortly afterwards. America’s troublingly low labourforce participation rate gives her little lee￾wayto do otherwise. But the turnin the US cycle is likely to be shallow and moderate. It may take years to return to trend interestrates. As Mohammed El-Erian put it, the US is readying for the “loosest tightening in the modern history of central banking”. In an era of tentative forecasts, that is probably as close to certaintyaswewill get. US Fed is wise to keep its options open at a time of very mixed data America’s disappointing economic recovery Sir, Michael Mackenzie is judicious to put dysfunctional cultural norms centre stage of the latest chilling episode of systemic criminality by our global banks(“Light falls on culture of impunity and immunity”, News, May 21). The story unravelling before us is one of criminal minds working together to circumvent and deceive regulatory authorities that would leave any “normal” industry quaking in its boots. That these banks are already regulated to the hilt and that the objective of these crimes was to seek profit at the expense of direct trusting customers, demonstrates how deeply ingrained this criminal culture has become. Like any unwitting victim, one can only imagine the sense of anger and dismay felt among investors. And shareholders, once again, have been given a shrill reminder of the lack of alignment between their own interests and those of the institutions they chose and trusted to represent them. But it is ironic that the biggest victim of these crimes will be the financial system itself that rewards these bankers so handsomely. There are many working in financial services, myself included, who argue that global capital markets have the potential not only to create wealth, opportunity and new markets where there is none, but also to hold the key to tackling some of the most intractable social and environmental issues that humanity faces today. For as long as the “dark underbelly” Mr Mackenzie refers to persists, our otherwise impenetrable argument will never be won. Paul Robinson Chief Executive, Alquity Investment Management London WC2, UK Sir, Martin Arnold sketches how banks brazenly fixed forex and other markets to fleece their clients over five years (“Barclays admits rigging the market”, May 21) and Lex sharply observes that the fines are unlikely to stop risky behaviour(“Bank fines: the wrong reaction”, May 21). Neither commentatorsurmises whetherthe cost of cheating was worth the revenues gained over five years. Does crime pay? Geoffrey Ridley Barrow Hammond, IN, US Banks betray investors as well asfinancial sector COMMENT ON FT.COM The World blog Isis’s takeover of Palmyra evokes mixed emotions among Syrians, says Sam al-Refaie www.ft.com/theworld Café culture in Warsaw, but Michelin starred venues are harder to find Innovation and scale fuel growth in Big Pharma Sir, Andrew Ward’s analysis (“GlaxoSmithKline: Out of step”, May 12) is balanced and spot on. The current strategy to rely on large￾volume commodity products and expect rewardsfrom innovation is not coherent. Especially with the decision to exit the high-demand oncology business. The UK is a leader in oncology research as is evident by work in basic and translationalsciences at Cancer Research UK and the Institute for Cancer Research. They, among others, are the envy of pharmaceutical companies in Europe, US and Japan. GSK has missed the huge, relevant and timely opportunity in its backyard. A large-volume, affordably priced strategy requires scale but an innovative strategy focused on oncology, for example, requires focused and institutional R&D. It is the commodity market that is crowded and price sensitive, not the market for innovation. Therefore to argue that GSK lacks the scale to compete in the oncology market(which is not crowded), but finds strength in vaccines and consumer healthcare, is to miss the point. Accordingly, it is unlikely that GSK’s “fundamental shift” in strategy will lead to a revival of growth. The shift in focusfrom innovative prescription medicines to large markets, and affordably priced products, makes sense if the products represent meaningful clinical differentiation; if not, it is a descent to a generics mindset, not a revenue￾defined turnaround. A company needs scale to compete in global commodity markets but requires innovation to succeed in high-demand markets. And, true innovation can be a successin both. All elementsfor a real revival in growth are in place. Michael Fernandes Managing director, Medbase Chapel Hill, NC, USA The cashless society is hundreds of years away Sir, You report that total cash transactions by consumers and businesses last yearfell below 50 per cent for the first time (“Notes and coins eclipsed by dash for non-cash”, May 21). But using the Payments Council’s own figures and assuming a constant rate of decline, I have calculated that cash will be around until approximately 2353. Cash isfor the most part free to access, easy to use, universally accepted and offers retailers the added benefit of carrying lower processing costs than cards. Like the paperless office, the cashless society is some way off. Paul Adams Chief Executive, Glory Global Solutions London WC2, UK Tough consequences of the pretence on Greece Sir, With Greece on the brink of default (News, May 23), it is time to look for a solution and avoid a Lehman-like financial panic. The financial condition of Greece is not at all different from that of the past few years. The only new factor is that the Greeks chose a government that stopped pretending that it would one day be possible to repay its debt mountain. The solution is obvious: Europe should pretend that Greece never stopped pretending and loan it the money it needs to repay its debt. This would allow the rest of the world to keep on pretending another few years that all isfine. Luk Delboo Horebeke, Belgium European business always suffers from uncertainties Sir, There is much talk about the promised EU referendum causing business uncertainty (The Big Read, May 21). When has business ever been certain? And, if you do not like uncertainty, maybe you should not be in business. Also, is the certainty we have concerning Europe worth having — remember that key European leaders gave us a nightmare called the euro. There was great pressure from “business leaders” to join the euro as it ‘would end uncertainty associated with a fluctuating currency’. Martin Hewes Hewes & Associates Haselmere, Surrey Referendum debate needs fair and clear voices Sir, I am sure I am not alone in thinking the article by Gérard Errera (Comment, May 19)the epitome of clarity, fairness and accuracy. Written in concise English, it is exactly the kind of thing we should have been reading from the UK’s politicians since the moment David Cameron promised the referendum. The anti-Europe lobby will no doubt use the fact that Mr Errera is French as sufficient evidence of bias or wrongheadedness. The rest of us should recognise the piece for what it is: wise words. Reg Green Overijse, Belgium Displays of empathy help defuse a reputational crisis Sir, Your opinion piece on Thomas Cook (Lombard, May 21) was spot on. With the public outrage continuing, with Mumsnet pulling Thomas Cook adverts and a backlash on social media, we see once more the fallout from chief executives who continue to take the advice of their legal teams over and above the communications person sat at the top table. Companies and lawyers may not wish to admit culpability but they can show empathy, the number one rule in dealing with this kind of tragedy. History is littered with companies who have failed altogether or who limp along with damaged reputations and share prices because of the way they are perceived to have managed such situations. The reverse is true forthose who show humanity; Richard Branson is often a case in point. While the communications director is the guardian of the firm’s reputation it is for all the executive to take it seriously and listen to those who offer wise counsel on the issue. Maria Darby-Walker London NW3, UK Regulator’s report on HBOS is long overdue Sir, In December 2012 the Financial Times called the collapse of HBOS “the UK’sforgotten banking disaster”. Two and a half years on from that comment — and nearly six years from the event itself— there is still no sign of the official report from the Financial Conduct Authority on why it happened and who was to blame. The unwillingness of the regulators to examine their own conduct has been marked. Originally the Financial Services Authority, which was the responsible body at the time, intended that its report remain internal. It had to be shamed into agreeing to publish it by the House of Commons Treasury Committee, but that never happened; the FSA was abolished before the report appeared. The FCA, which took over from the FSA, has steadfastly refused to set a date for publication and still declines to do so, hiding behind the so-called “Maxwellisation” process that allows individuals criticised in official reports to hire expensive lawyers to delay publication indefinitely. No such inhibitions held back the Parliamentary Commission on Banking Standards, which is the only organisation to name the guilty men and attempt to draw lessonsfor the future from the debacle. In seven months it produced a report, which was both readable and incisive. Yet it had no power to fine anyone, nor to ban individuals from working in financial services. So we have Mike Ellis, who was finance director of HBOS at the time of itsfailure, being authorised by the FCA to be chairman of Skipton Building Society. Of its £54bn total losses, HBOS lost £7bn on its mortgage book. If before approving Mr Ellis for his present role the FCA satisfied itself that he was not in any way responsible for any of those losses, surely it should publish the evidence? The collapse ofHBOS and the subsequent disastrous takeover by Lloyd’s cost the taxpayer £20bn, money that we are only just recouping now. Some 40,000 employees have lost their jobs and several million shareholders — many employee shareholders or smallsavers who got sharesin the demutualisation of Halifax Building Society — have lost most of their investment. In some cases it was their life savings. They are owed an explanation of what went wrong and who was to blame. Ray Perman Edinburgh EH7, UK Warsaw deprived of a glut of top-end restaurants Sir, as part of the “elite” happening to drive German cars in Poland (“Polish voters poised to punish government that delivered prosperity”, May 21), I would like to regretfully point out that there is only one Michelin-starred restaurant in Warsaw. Even worse: the one in Warsaw is the only one in Poland. Marco Bartolini Milan, Italy

FINANCIAL TIMESaedCommentGermany'sThe fate of Greece lies in Tsipras's handsdecisionon coalbrings a clashWolfgangofwillsMinchauOPINIONNickButlerranBig Data's infinite harvestAMERICAs, This is notntare Us coEdwardthat BrlasneLuces..GCestlhonnone ofthekcyfaultlineserevealevermoreF16TakethenewSilkRoadasanopportunitynotathreatOPINIONLiuXiaomingtedt

Monday 25 May 2015 ★ FINANCIAL TIMES 9 I t is all up toAlexis Tsiprasnow. The Greek prime minister will decide soon whether or not he wants a deal with his creditors that would allow Athens to service its debt. If he says “no”,Greecewilldefault.Atthatpoint,it is possible the countrywill have to leave theeurozone. What should he do? He will know his own political constraints. I will focus on the economics. The short answer is: if the deal is reasonable, he should accept. So where is the line between reasonable andunreasonable? The rough answer is whatever it takes to end the uncertainty. No investor is going to put their money into Greece so long as there is a threat of Grexit — a Greek exit from the eurozone. For an agreement to be viable, it would need to reduce the probability of Grexit to zero. ness acumen to open up new markets. What is good for Google is good for America—andtheworld. But there are hidden costs. Ponder how Google and Facebook, are interact￾ing with you. In exchange for free social networking, emails, videos, search, sat￾ellite maps and now telephone calls, they are building your profile in ever moregranulardetail. Without really digesting it, we have made a Faustian bargain. They give us free computing power — beyond our wildest imagination — and we reveal ever more about ourselves. The more Google knows about you, the better it teases out preferences you never real￾isedyouhad. It is an asymmetric exchange. Big Data has our profiles but few of us know how extensive that is. It is the informa￾tion equivalent ofWalmart. The big box retailer drove countless Mom and Pop storestothewallbyacquiringevermore pricing leverage. The job losses went deep, and some of the victims were cus￾tomers.Themodelisself-cannibalising. Apply the Walmart example to the data industry. We now receive most of our content for free (like Asterix against the Romans, the FT, among others, is holding out). Producers of content are suffering. By the end of this decade, most of the world’s books will have been uploaded to Google’s online library. The com￾pany’sswayoverourcultureandknowl￾edge will be unprecedented. Should we charge Big Data for our personal data? Jeff Hammerbacher, former head of data at Facebook, said: “The best minds of my generation are thinking about how to make people click ads.” In a par￾allel universe, they might be figuring out something more noteworthy. But what they do brings us untold benefits. Evildoesnotcomeintoit. We should nevertheless embrace the bargain with open eyes. We are not Big Data’s customers but its product. As long as we grasp that we users are also beingused,lettheharvestcontinue. edward.luce@ft.com But there are other sides to this story. The first is that Google’s chief complain￾ants are US companies. This is not a transatlantic spat. It just so happens that Brussels has a tougher competition regime. Yelp, Microsoft, Expedia and others have complained both to Brussels and Washington’s Federal Trade Commis￾sion about Google’s alleged anti-com￾petitive practices. Indeed, in a 2012 report, the FTC’s own staff recom￾mended action on three counts against Google for conduct that had resulted in “real harm to consumers and to innova￾tion”. Google had been presenting con￾tent “scraped” from other sites as its own. It had also been privileging its own commercial sites in search results — a clear conflict of interest. However, the FTC’s commissioners rejected their staff’s conclusions. It might have been different had the probe been carried out by the Department of Justice, as was the case with Microsoft, which was penal￾ised on both sides of the Atlantic more thanadecadeago. Not even Goldman Sachs can match Google’s lobbying clout nowadays. When the report was leaked to the Wall Street Journal in March, Google cajoled the FTC into distancing itself from its ownconclusions. The idea that US regulators had in fact agreed with their EU counterparts was too dangerous. Johanna Shelton, Google’s chief lobbyist, has visited the White House more than 100 times. Eric Schmidt, Google’s chairman, is closer to President Barack Obama than any other business leader. Google even has its own “data diplomacy” outfit, Google Ideas, which is headed by a former state department official. It combines data initiatives against autocracies with busi￾W elcome, customers, to thiscolumn.Iwritearti￾cles and you subscribe to the FT and tell me how wrong I am (to be fair, some of your are kinder). Now, let us imagine you read this piece, or other FT content, for free on Facebook or Google. It is a far sweeter deal, right? You get something for nothing and Big Data can bask in its own beneficence. Apply that to any amount of diverse content. Rarely in the history of human knowledge have so few offered so much tosomanyfornothing. That, at least, is the story most of us have downloaded. In the rare cases where an entity — such as the European Commission, which is probing Google’s alleged abuse of its dominant position — raises objections, the obloquy is instant. Google, the US government and others accuse Brussels of thinly veiled protec￾tionism. If Europe could innovate like the US, perhaps it would spend less time trying to bring others down. There is a reason Google’s motto is “Don’t be evil”. It invests in ways of bringing ever more knowledgetohumankind. Peter Thiel, a co-founder of PayPal, describes Google as a benign monopoly. If it encountered real competition, its research and development budget would vanish — and with it the self-driv￾ing car,wearable computers, “loon bal￾loons” beaming cellular data from the stratosphere and so on. We should appreciate the upside to its dominance. Google’s monopoly returns enable it to fund the equivalent of AT&T’s legen￾dary Bell Labs, or Xerox Park, which made so many breakthroughs. Besides, the data industry’s barriers to entry are low.Thedisrupterscanbedisrupted. It is true that certain countries have mixed feelings and have yet to make up their minds about joining. If it is old￾fashioned geopolitics that is still bother￾ing them, I would suggest they turn to the observation of another respected strategist. In the 1990s, Zbigniew Brzezinski,theformerUSnationalsecu￾rity adviser, compared the world to a grand chessboard and regarded Eurasia as the most important geopolitical cen￾tre.Intriguingly, he envisaged“the inev￾itably emerging transportation network meant to link more directly Eurasia’s richest and most industrious western andeasternextremities”. The proposed Belt and Road initiative has gone way beyond Mr Brzezinski’s prediction. It means more than just a “transportation network” that will bring Europe and Asia ever more closely to each other. It will bring development and prosperity to the whole of Eurasia — andeverycountrywillstandtobenefit. The writer is China’s ambassador to Britain China is also workingwith central and eastern European countries on the pos￾sibility of a new land and maritime cor￾ridor linking the Hungary-Serbia high￾speed railway to the port of Piraeus in Greece. The blueprint and visions for this initiative are a far cry from monop￾oly or dominance. On the contrary, China welcomes contracting and sub￾contracting by all countries as well as effortstobuildfinancingplatforms. One such platform is the Asia Infra￾structure Investment Bank (AIIB), which has attracted much attention recently. Far from being a replacement, the AIIB is a supplement to existing multilateral development institutions. It will operate within the global eco￾nomic and financial framework, and follow established international prac￾tices. The UK’s decision to be the first of the G7 group of developed nations to join the AIIB is commendable and not without reason. It was soon followed by other European countries who also saw thebusinessopportunitiesitoffered. countries along these two routes — from western China to eastern Europe; from SoutheastAsia to east Africa— are gen￾erally in need of economic develop￾ment. The world could help them to develop and once again become a thor￾oughfarelinkingEuropeandAsia. The Belt and Road initiative is China’s idea and everyone’s opportunity. China intends to use its strength in infrastruc￾ture construction and financial resourcestopromotethisproject.When visiting Pakistan last month, President Xi expressed support for an economic corridor between the two countries comprising energy, infrastructure and industrialco-operation. Some question whether thisis a bid by China for greater land and maritime power in response to the US pivot to Asia.Otherswonderwhetheritisdriven by economic self-interest — a bid to off￾set overcapacity at home or to secure a bigger say in the global financial system. What the sceptics fail to see is that the Chinese mind is never programmed around geopolitical or geoeconomic theory. As Confucius said: “He who wants success should enable others to succeed.” And the initiative of “One Belt, One Road”,short for the Silk Road Economic Belt and the 21st-century Maritime Silk Road, is an offer of a ride on China’s economic express train. It is a public product for the good of the whole world. As President Xi Jinping has said, China will co-operate with countries along the route so that everyone will benefitfromitsdevelopment. Historically, there were two trade routes, on land and at sea, extending fromChina all the way to Europe. Goods and ideas flowed both ways. Today, the A century ago, Sir Halford Mackinder, the British geographer and politician credited as the father of western geopolitics, asserted that: “Who rules East Europe commands the Heartland; Who rules the Heartland commands the World Island; Who rules the World Island com￾mandstheWorld.” Mackinder’stheorycaptivatedgener￾ations of geo-strategists who saw Eura￾sia as the “heartland” of the world’s most populous and pivotal region. More recently, however, it has prompted needless scepticism about China’s new Silk Roadinitiative, which will weave its way westwards through Eurasia on both landandonsea. The same applies to the policies needed if Mr Tsipras says “no”. On that day he wouldneedabrillianteconomicplan. So what economic criteria should he applytoevaluateanyoffer? The single most important part of the agreement concerns the fiscal adjust￾ment that Greece’s creditors are asking Athens to undertake. The variable to look out for is theprimary surplus—the fiscal balance before payment of inter￾est on debt: essentially the money a country has for debt servicing. There is no such thing as an objectively right or wrong number. But experience shows that large primary surpluses are politi￾cally unsustainable. It was the unsus￾tainability of the previous agreement between Greece, its European creditors and the International Monetary Fund thatbroughtSyrizatopower. I heard a respected expert on this issue recently proclaim that a primary surplus of 2.5 per cent of gross domestic product would probably work. The Greeks have demanded 1.5 per cent, which is a reasonable opening bid. One of the so-called “non-papers” — the doc￾uments officials leak without leaving fingerprints — that are circulating among the negotiators had mentioned a figure of 3.5 per cent, which strikes me as too high.A primary surplus of 4.5 per cent, as was demanded from 2016 onwards by the previous loan agree￾ment,isplainlyludicrous. Greek economic mismanagement brought about the crisis in 2010, but the creditors are responsible for the current mess by insisting on an economically illiterate adjustment programme. They had not taken into account the fact that Greece is a relatively closed economy. This means that most of its GDP is pro￾duced and consumed at home. If you force such an economy into extreme austerity during a recession, it stays trapped. The key to a Greek economic revival has to be an end to austerity. This is why Grexit is not necessarily a solution, either, since it might bring even more fiscal consolidation. Greece would be cut off from international cap￾italmarketsandunable torunadeficit. What should happen now is what should have happened in 2010 and 2012 when the first and second Greek loan programmes were agreed. Athens should have been allowed to default. Instead, the creditors offered the coun￾try a dangerous pact: we help you roll over the debt; you run excessive pri￾marysurplusesinthefuture. What would happen if Mr Tsipras was presented with such a choice again, and accepted? Greece would survive the summer without default but would require a third programme of financial help partly because its public finances have deteriorated so much since Janu￾ary. The probability that this process will derail at some point ishigh. So is the probabilitythatinvestorsknowthis. This is why I am sceptical about another round of extend-and-pretend dishonesty where governments or banks grant loans in the full knowledge that they will never be repaid It did work once. A year ago, investors were nearly euphoric. Greece regained access to financial markets. Real growth had briefly turned positive. But do they reallythinktheycanrepeatthistrick? I doubt it. I see three plausible recov￾eryscenarios.First,Greecemaysecurea credible deal with a primary surplus demand the right side of crazy. For this to work, such a deal would need the political backing of Mr Tsipras, the Greek parliament and Greek society. It would need to be opposition-proof because the deal still has to stand even if thegovernmentweretochange. A second scenario would be to allow Greece to default on its debt, for credi￾tors to stop any further sovereign trans￾fers and for the eurozone to take over the equity of the Greek banking system. If the Greek banks are no longer owned domestically and guaranteed by the government, there is no way Greece could ever be forced to leave the euro￾zone.Acollapseofthebankingsystemis thereasonGrexitcouldhappen. And, finally, another way to get rid of Grexit fears would be Grexit itself. I would not favour this option. But credi￾tors should know that it is no more irra￾tionalthanimposingfurtherausterity. munchau@eurointelligence.com Big Data’s infinite harvest They give us free computing power and we reveal ever more about ourselves You can fool all of the people some of the time; a year ago, investors were nearly euphoric Take the new Silk Road as an opportunity not a threat OPINION Liu Xiaoming China intends to use its strength in construction and financial resources to promote this project T he conflict at the heart of Germany’s energy policy is coming to a head. Can Ger￾many claim to be an envi￾ronmental leader while still burning more coal than any other devel￾opedcountryapartfromtheUS? The issue is easier to describe than to resolve. Germany has led the EU in adopting “green” policies, including the promotion and subsidy of renewables. Energy consumers, including industry, have tolerated ever-rising energy costs. The process of closing Germany’s nuclear power stations by 2022 has begun. These policies enjoy support across the political spectrum — the Green party won just 7.3 per cent of the vote in the last federal election but green ideas now permeate the thinking of all parties. The coalition between the Christian Democrats and the Social Democrats is committed to reduce emissionsby40percentby2020,70per cent by 2040 and 80 to 95 per cent by 2050. The German approach is being exported to Brussels with a drive under the European Commission to shape an EUenergypolicyalongthe samelines. But the country is not as pure and green as the rhetoric suggests. Emis￾sions have risen over the past three years. Renewables have also grown, but 44 per cent of electricity still comes from coal, in particular carbon-inten￾sive lignite or brown coal; coal-fired power plants account for a third of all emissions. The decision to close the nuclear sector after the Fukushima accident in Japan opened the door to a rise in coal consumption. Between 2011 and 2015,there will be more than 10GW of new coal-fired capacity. Nor has Ger￾many supported the key steps that could cut emissions, such as the estab￾lishmentofaneffectivecarbonprice. Finally, however, the problem is being addressed. The government is applying US-style regulatory tactics to reduce emissions from coal-powered plants by setting ever higher standards. Under the plan announced by Sigmar Gabriel, the economics and energy minister, the rules will eliminate some 22m tonnes of carbon emissions and allow the country tomeetitstargetsfor2020. The question is whether the plan will go through or if Mr Gabriel, whose SPD depends on trade union support, will back down. The opposition isled by the utilities — which are finding it ever harder to justify continued investment in the sector — with strong support from workers particularly in regions such as North Rhine-Westphalia and Saxony, where coal-fired plants are concen￾trated. Three weeks ago, 13,500 people marched through Berlin in defence of brown coal, claiming 100,000 jobs were at risk — a figure Mr Gabriel denies. The opposition has some support in Chan￾cellor Angela Merkel’s CDU party, not least from those who emphasise the cost of the energy transition — €134bn on some recent estimates. As yet no serious politician has been bold enough to chal￾lengethecoreenvironmentalagenda. The argument highlights the green agenda as one of the key faultlines of European politics, one that cuts across traditional dividing lines.In some coun￾tries, such as France and the UK, the main issue is shale gas development; in others it is nuclear power. Climate change is the backdrop butthe issues at stake are also about the immediate local environment. In political terms, the decision on what happens to coal is a crucial test of will between two of the key forces in German society — the green movement on one side and industry and the unions on the other. The momentum that has been with the greens is being tested. The outcome matters beyond Germany. If the measures against coal go ahead there is every chance something similar willbeappliedacrosstheEU.Ifthe trade unions and the utilities win we may be seeing the turning point — the moment at which the green agenda reaches the limits of the possible in terms of the sac￾rifices electorates are prepared to make. The writer is visiting professor and chair of the Kings Policy Institute at Kings College London Germany’s decision on coal brings a clash of wills OPINION Nick Butler The argument highlights the green agenda as one of the key faultlines of European politics The fate of Greece lies in Tsipras’s hands Matt Kenyon Comment AMERICA Edward Luce EUROPE Wolfgang Münchau MAY 25 2015 Section:Features Time: 24/5/2015 - 20:15 User: allenk Page Name: COMMENT, Part,Page,Edition: LON, 9, 1

10FINANCIAL TIMESMenday 25 Mey 2015BUSINESSEDUCATIONCatholic Church under scrutinySceptics of Church of EnglandcoursereappraisetheirviewsMissiontooverhaulclergyfinancestriggerstraining,reportsRachelSandersontnxterfarvondnafirstfotholiwouldbnflearninworship services, all ofwhichtheCaahurrhrlarenaneestandorespobiohmsatlianersity(PUtend the Eastervigil mass given by Pope Francis at St Peter's Basilica in Vatican City-RncogneFrancishassho85Dealightonthe importancenganeconomitottheandmangemenacrossparishes-VutchmrehsaebythnatGhurcthureBring your career into focuswRegisterforfreeCanneits.comONNEOTOLASSROOMFINANCIALTIMESFINANCIALTIMESTHEORYTOTHEREALWORLDSTUDENTOFFERo0ndussoewealhoTifastFTofglobalbusinessnewsgives youible,costeffectivewayoIndhustrialoutputidirectlytotheorinaEmuichonslermultmAccesstoFT.comvladesktop,tabletandmobileration ofFTnews into your pretferredlearningplatformSubstantialpricereductionsforstudentsandfacultaOfdyssmailingicensing@ft.comorvisitww.f.com/educationSubscribenowand save50%at ft.com/studentrate30imFINANCIALTIMESFINANCIAL TIMES"FT Globd MBA Ranking 20ItiswhatvouknowItiswhatyouRnow

10 ★ FINANCIAL TIMES Monday 25 May 2015 BUSINESS EDUCATION Cardinals attend the Easter vigil mass given by Pope Francis at St Peter’s Basilica in Vatican City — Franco Origlia/Getty Images The introduction of a business school training course for senior clergy in the Church of England (CoE) has proved controversial, sparking complaints that teaching management techniques would be at the expense of learning pastoral skills, writes Jonathan Moules. In 2014, the CoE worked with Cam￾bridge’s Judge Business School to developaweek-longcoursefordeansof cathedrals and heads of larger churches, teaching skills necessary to better manage their operations, such as reading a balance sheet, strategic plan￾ning and overseeing marketing cam￾paigns. The proposals for the “mini MBA” qualification upset some bishopswhen they were first set out in a report for the church, chaired by Lord Green, former HSBC chairman and a practising Chris￾tian. However, now the first pro￾gramme has finished, many of the 28 people who took part have praised the course, including some who claimtheir initial scepticism about its value was subsequentlyassuaged. Catherine Ogle, dean of Birmingham Cathedral, admits to having had con￾cerns that the teaching would not be put in a theological context, but says theseliftedafterstartingthecourse. “When talking about models for what success looked like, for example, we had to reflect as we went on that we follow a saviour who was not successful in lots of ways in that he didn’t earn much and was a failure in that he died young. The teachers worked with this rather than allowing those views to be subverted,”shesays. Pete Wilcox, dean of Liverpool Cathedral, who helped with the crea￾tion of Lord Green’s report, was already a convert to the merits of formal train￾ing before attending Judge. However, Judge was his first experience of busi￾nessschool. “We are like a small or medium sized enterprise but we need to juggle more things than most businesses,” Mr Wil￾cox says. “That is the beauty of cathe￾drallife.” Liverpool’s cathedral has a turnover in excess of £4m and about 80 people on its payroll. Its activities include a food bank, a volunteer programme for the unemployed and schools out￾reach work, as well as a schedule of daily worship services, all of which require budgeting, planning and mar￾ketingskills,MrWilcoxnotes. “Ask any dean what the deficit is in their training and they will say they find themselves effectively managing a small business and that is where theyknowtheyneedtraining.” Mr Wilcox claims he was particu￾larly impressed with the degree of preparation completed ahead of les￾sons by his tutors at Judge. “The chap who did the session on finance had downloaded our set of cathedral accounts and had created a set of fic￾tional accounts that was credible to useintheclassroom. “Virtually as a mantra, each lec￾turer started by saying I am not an expert in cathedrals or churches so this is going to be a conversation. That established a good learning environ￾ment.” The cost of the CoE training pro￾gramme at Judge has been put at £2m between now and the end of 2016, plus £785,000 a year after that. The first programme, run in March, will now be repeated for a second group of cathedraldeansnextJanuary. Sceptics of Church of England course reappraisetheir views P ope Francis’s clean up of the Catholic Church’s finances is extending far beyond the wallsofVaticanCity. In a first for the Catholic Church, Rome’s Pontifical Lateran Uni￾versity, a hub of teaching for Catholic clergy, has started a course to teach priests and the laity management and financeskills. Organisers say that it is the latest demonstration of Pope Francis’s desire to overhaul Church finances, and the demand forleaders to be better trained to respond to the Church’s economic needs. “The Pope has shone a light on the importance of good management not only at the Vatican Bank but across par￾ishes,” says Charles Zech, faculty direc￾tor for the Center for Church Manage￾ment and Business Ethics (CCMBE) at Villanova School of Business in the US. InpartnersipwiththePontificalLateran University (PUL) in Rome, it is running the programme during the second year of its International School of Pastoral Management. The move follows strides taken by the Church under Pope Francis to shake off a reputation as a murky haven for illicit behaviour from tax evasion to money laundering. Pope Francis has driven reform of the Institute for Religious Works (IOR) — informally known as the Vatican Bank — which has been shrouded in contro￾versy since its founding during the sec￾ondworldwar. His overhaul of the Vatican’s finances has extended from empowering lay spe￾cialists to regulate the city state’s finan￾cial structure and run its bank, to creat￾ing an economic ministry to unify the administration, which has long been characterised by a lack of transparency andcompartmentalisation. Most recently, the Vatican also struck an agreement with Italian authorities to enddecadesofsecretbanking. But church experts say the new course by the PUL is significant because it demonstrates the Pope’s recognition that Church management needs a dra￾matic upgrade at all levels, not just in the Vatican Bank and the Curia. By instructing thePUL to institute this pro￾gramme, he is sending another not-so￾subtle message that finances matter to theVatican. In an investigation that Prof Zech led severalyearsagointoabouthalfofallUS parishes, 85 per cent of them reported finding some embezzlement. Many did a limited audit of their finances, and a fifth of those he surveyed did not do any at all. “It is a huge problem to the credi￾bilityofCatholics,”hesays. The first cohort of students from the PUL began their 15-week programme in February. This will include a week￾long residency at Villanova in April 2016. According to ProfZech,Villanova will provideonlineandin-personeducation, alongside professors from the PUL, to students from around the world. An annual, one-week summer programme will also be established on the US cam￾pus and a series of twice yearly interna￾tional research conferences on church management will take place in Rome andtheUS. A desire to professionalise the admin￾istration of the Church also comes as its leaders in the US and Europe seek to reshape the administration of parishes amidfallingnumbersofpriests. In a move that shook the wider Catho￾lic Church, last year Cardinal Timothy Dolan of New York was forced to merge more than 100 parishes as falling num￾bers of clergy had made them impossi￾bletosustain. As part of the shake-up to allow priests to concentrate on their “day job”, lay managers took over the “temporal” side of church business, leaving it up to theclergytofocusonthespiritualside. For the time being, these lay adminis￾trative roles are often done voluntarily by retirees or as a second career that is usuallylowlypaid. But the professionalisation of the Church’s administration is a trend Prof Zech sees continuing under the guid￾ance of Pope Francis, and also because of the wider modernisation of the Cath￾olic Church and a push for greater transparency. Catholic Church under scrutiny Mission to overhaul clergy finances triggers training, reports Rachel Sanderson Pope Francis has shone a light on the importance of good management across parishes MAY 25 2015 Section:World Time: 24/5/2015 - 18:44 User: tosicc Page Name: BusEd1, Part,Page,Edition: LON, 10, 1