1 Euro as the ‘New’ Coke of currencies (Larry Elliott in The Guardian) The date 23 April 1985 was a momentous day in the life of the Coca-Cola corporation. For years, the company had been planning a new drink to see off the challenge from Pepsi. There was no expense spared for Project Kansas.
“New” Coke (as it was dubbed) bombed. The company responded with alacrity. It didn’t say consumers were wrong. It didn’t say that given time New Coke would be a success. Instead, it recognised that there was only one option: to go back to the traditional formula. This returned to the shelves on 11 July 1985, within three months of “New” Coke’s launch.
There is a lesson here for both businesses and policymakers – and European policymakers in particular. Sixteen years after its launch, it should be clear even to its most die-hard supporters that the euro is New Coke. European politicians took a formula that was working and messed around with it.
They changed the ingredients that made the European Union a success, thinking it would be an improvement. Coca-Cola thought New Coke would see off the challenge from Pepsi. Europe thought the euro would see off the challenge from the US. Both were wrong. The only difference is that Coke quickly saw the writing on the wall, and that Europe still hasn’t.
It is not hard to see why the pre-euro European Union was popular. The EU was seen as a symbol of peace and prosperity after a period when the continent had been beset by mass unemployment, poverty, dictatorship and war. Britain’s decision to join what was then the European Economic Community in 1973 was mainly due to the feeling that Germany, France and Italy had found the secret of economic success.
Since the birth of the euro, it has been a different story. In the good times, monetary policy is too loose for their needs, leading to asset bubbles, inflationary pressure and the loss of competitiveness. In the bad times, there are no shock absorbers. Devaluation of the currency is not possible. The euro was a bad idea. Getting rid of it and reverting to a more sensible way of running the European economy is not as easy as taking a product off the shelves. But the single currency is New Coke, and the sooner Europe realises that the better.
2 IBM sales drop for 13th straight quarter (BBC) IBM has reported a fall in sales for the 13th consecutive quarter. The world’s largest technology services company said that revenue fell 13.5% to $20.8bn, while net profit fell 17% to $3.5bn.
The strong US dollar and IBM’s decision to move away from its hardware business to focus on higher-margin operations both hit its performance. Chief executive Ginni Rometty said that the second-quarter results reflected the company’s ongoing transformation.
IBM said much of the fall was due to the impact of the strong US dollar and the sale of its System x business. Excluding that unit, sales were down by just 18%. In contrast, it said revenues from its new areas of focus – cloud computing, analytics and engagement – had risen by more than 20% this year.
3 Why parents push kids into the rat race (Asha Iyer Kumar in Khaleej Times) The task of finding our wards a niche in this world isn’t easy anymore, for things aren’t the same as when we or our parents were children. The challenges of child bearing and rearing aren’t the same as it was then and parents are at their wit’s end trying to chart the course of their children’s progress.
Parents of past generations wanted their children to be ‘happily settled,’ the term essentially implying comfortable finances and amiable domesticity. Parents today are fighting battles at different levels – with the world to make sure their young ones stay unharmed by its toxic influences and vagaries; with societal prejudices and false standards of worth that can shatter their children’s self-esteem, with themselves, and with self-assertive children whose demands are exceedingly materialistic.
Even when we berate the rat race, we exhort them to it. Compete. Succeed. Be aggressive. Achieve things in life that we didn’t. Be happy. Make us proud. It’s all we want of you in life. Simultaneously, we also seek ‘peace of mind’ for them, but we don’t utter it, for we realise that things that fetch true peacefulness are unmaterialistic and we are afraid to prescribe it.
So we strive to arm them to the teeth and watch nervously from the sidelines as they battle it out in the middle, unsure if they will still romp home in victory. In the end we merely say a tad resignedly, ‘we did our bit. Now it’s their destiny’.