Month: September 2009

Raw Deal

Yesterday Slovenia and Croatia reached and agreement regarding the ongoing border dispute and related Slovenian blocking of Croatian EU membership negotiations. The deal was struck in Ljubljana by heads of governments of boths countries amid what appears to be a second honeymoon between the two countries and especially between the two prime ministers: Slovene PM Borut Pahor and his Croatian counterpart Jadranka Kosor. While the deal does not settle the border dispute itself, it opens the way for continuation of Croatian EU negotiantions, much to the delight of Zagreb and Brussels. Also, it needs to be said that Croatian EU membership is also in Slovenian interest, both politically as well as economically.

pahor_kosor.jpg
PMs Kosor and Pahor in downtown Ljubljana (source)

In Slovenia the deal came under intense fire from the political right-wing, especially from Zmago Jelinčič’s Slovene National Party (SNS) as well as Slovene People’s Party (SLS), as of recently headed by Radovan Žerjav. Predictably, Janez Janša’s SDS is also making unhappy noises, but since the top dog of the party remains silent, their position can change quickly, in accordance with his instructions.

But yesteday was apparently a happy occasion for both sides and both heads of government decides to celebrate by having a coffee in downtown Ljubljana, which was definitely a first. Okay, so Borut and Jadranka could have picked a better spot than the tourist-trap that is the cafe on Prešeren square, but there you go.

Appearances, however, can be deceiving. According to the official press release the deal has three basic points:

  • 1. In a letter (faxed from Pahor’s office just prior to the meeting, mind you) to Swedish PM currently holding EU presidency, Croatian PM Kosor stated that “no document, position, written or oral statement within the framework of the negotiation process shall prejudice the final determination of the border.“
  • 2. Kosor’s letter apparently includes a statement that “the border dispute will be settled by way of international arbitration, as proposed by the European Commission, and that negotiations will proceed from the point at which they were suspended on 15 June 2009,”
  • 3. Agreement on the method of settling this dispute will be reached before the vote on accession treaty takes place in the Slovenian National Assembly

    • To put it in layman’s terms: PM Kosor stated that anything said, done, written or submitted regading border with Slovenia in the process of EU negotiations does not pre-judge the disputed border areas. Secondly, the dispute will continue to be sovled where it was left off by EU Commissioner Olli Rehn, while the manner of the dispute will be solved by the time Slovene parliament votes on Croatian accession to the EU.

    Finally (and this is not included in the press release) any and all documents and actions regarding the border between the two countries passed after 25 June 1991 (the day both coutries declared independence) will not ne applicable when settling the dispute.

    Pengovsky would be very much thrilled if this were a good, or at least an even-sided deal, but I’m afraid this isn’t it. Not even close.

    First of all, there are the documents, which Croatia submitted to the European Commission and which PM Kosor said that they do not prejudge the border. The problem is twofold: firstly, PM Kosor gave assurances that were not hers to give. These documents were passed by the Croatian parliament and their nature can only be changed by the very same institution. But that is a problem for Croatia.

    Secondly, these documents are still a part of Croatian legislation and will – since they will apparently not be withdrawn – become an integral part of Croatian Treaty of Accession to the EU, which will become part of European legislation once ratified by all member states. Given the fact that these documents, which draw the maritime border down the middle of the bay of Piran, cutting Slovenia out of direct access to high seas are fully in force in Croatia today, their becoming part of EU law could undermine Slovenia’s negotiating position, regardless of the manner in which the dispute will be solved.

    Thirdly, declaring all documents and agreements after 25/6/91 invalid is problematic. Admittedly, this includes all unilateral acts, which include Slovenian declaration claiming the entire bay of Piran, as well as Croatian setting up border check-points north in the disputed area. And most importantly, it includes the Drnovšek-Račan agreement. The latter (which is as close as the two countires ever came to a solution) is now officially dead. The only problem is that past Croatian attemps to create a new reality on the ground are still there.

    Truth be told, there seems to be some sort of confusion on this point. The official Slovenian press release does not say a word about it, while the translation of Kosor’s letter (Slovenian translation provided by Pahor’s office) states that any unilateral acts and documents will not be considered valid when deciding the border question. The official Croatian press release, however, states that “no document or unilateral move after 25 June 1991
    has legal effect in the settlement of the border dispute    ”

    So, reading the Croatian press relase letter-by-letter, the Drnovšek-Račan agreement is dead. Reading the Slovenian translation of Kosor’s letter to Swedish EU presidency, the agreement is not dead, as the letter talks about unilateral deals only. And reading the Slovenian press release, there is no mention of any of this at all.

    And finally, there’s the point of “deciding on method of settling this dispute will be reached before the vote on accession treaty takes place”. This does not mean that the border dispute itself will be solved by then. Given the wording of the document, it most likely will not be. It only means that by the time the vote on Croatian EU membership comes up in Slovenian parliament the manner in which the dispute is to be solved must be decided. Which means that Slovenia has just dropped its lone ace in the game.

    And what happens if my some chance even the method cannot be agreed upon by the time Slovenian parliament votes on the Croatian accession? Will Slovenia block the process once again? It could, but it will get even less support in the EU then it did this time around. Namely, if until now Slovenia had specific grievances towards specific documents, in a few years time it would be blocking a fully harmonised candidate state. Until Friday, Slovenia was able to nitpick and complicate things in a accession process. As of now, any more attempts at a blockade will be treated with contempt, because we had our chance to solve the problems.

    So, unless things go really good really fast, prime minister Borut Pahor will turn out to have fucked up spectacularly. And if the last eighteen years are anything to go by, things will not go really good really fast. All along the Croatian modus operandi was to secure their basic interests and not move an inch beyond that. Now that the blockade is about to be removed, they have little incentive to do anything more about the border dispute. Unless, of course, either country’s parliament steps in and undermines the deal. At which point we would be seriously back to sqare one, without a solution in sight.

    So, rather than being hailed as a triumph of dialogue, the Kosor/Pahor deal can well be seen as Slovenia backing down yet again and putting off the inevitable show of force until the vote on Croatian EU membership. By which time it will have been too late, unless the process of finding a solution to the border problem makes substantial headway very soon.

    The Curious Case of Franci Križanič

    In the last week or so the government of Borut Pahor was dealing with yet another reality check. Not that it really needed one, but there you go. The reality in this case being the fact that not nearly enough money is flowing into its coffers. The reason is simple and countries all over the world are trying to deal with it: as productivity took a dive, so did the amount of taxes and excises levied. This goes for both personal income tax and value added tax, as well as most other taxes.

    20090909_krozanic.jpg
    “He works better than talks” PM Pahor on finance minister Franci Križanič (source)

    So, what to do about it? Finance minister Franci Križanič (nick-named “minister for optimism” by PM Pahor) said days ago that te government will have to re-introduce one or two levels on personal income tax for top earners. In plain-speak that meant going back to nearly 50% taxation of personal income of the wealthiest Slovenians, those who earn more than 37,000 EUR per year. Now, to put things in perspective: average monthly income in Slovenia is about 11,000 euros per year (slightly more than 900 EUR per month), with two-thirds of Slovenians earning less than that. Reintroduction of the highest level of taxation would thus affect only the extremely rich.

    However, all hell broke loose. Virtually within hours Križanič’s plan was attacked as anti-development oriented and de-stimulative, inciting people to earn even less and thus buy even less, therefore causing an even bigger budget deficit, whereas those who will still earn a lot will be even more prone to tax evasion. Strangely, the flak Križanič was taking did not only come from the direction of the opposition (it was Janša’s government which did away with the top levels of taxation), but from media in general.

    Curiously enough, just about that time KMPG – the world’s largest auditing and financial consultancy company ever since Arthur Andersed died of shame (which is still a fatal disease in some parts of the galaxy) after Enron scam was discovered – published a report saying that Slovenia has the highest rate of personal income tax in the world. The reaction was predictable: media went on a rampage and public opinion went apeshit. Katarina Kresal’s LDS went on the record saying that the ruling coalition had not yet decided on whether this was really such a good idea and to top it off PM Pahor said of his minister that “[Križanič] is the only minister who speaks his mind, but that he works better than he talks” Which meant that Križanič’s plan was basically dead in the water.

    Slightly off topic: I suspect Freudian psychoanalysts would have a field day with Pahor assesment of Križanič. PM effectively said that noone in the government save Križanič is speaking his mind and that (by extention) everyone else – himself included – are better as speaking than doing. I’m sure Pahor did not mean to say that, but he said it, albeit via a Freudian slip. Go figure.

    But, to get back at the business at hand: the deconstruction of Križanič was so swift and merciless that is resembled a surgical air strike. Think about it. The finance minister talked about raising taxes to the top couple of percent of Slovenians. Although this country is not as egalitarian as it once was, the divisions between the filthy rich and those who are not comfortably well off, are nothing compared to the US, Great Britain or Russia (to pick three examples at random). And yet the idea of taxing the rich is welcomed at gunpoint, especially by the media. Why?

    The usual answer would be that higher taxes would hurt the media owners. But Slovenia does not have those – not in terms of Rupert Murdoch or Robert Maxwell at least. And ever since Boško Šrot is over and done with, we’re not likely to see media owners directing fiscal policy. Most newspapers are owned by several competing funds or firms, none of which have a dominant influence on them. And owners of those few media which are foreign owned have so little vested interest that one can hardly accuse them of letting their media loose on the government. Besides, that would not explain the across the board rejection of Križanič’s plan. In fact, for better or for worse, in Slovenia it is still politics, which controls the economy and not the other way around.

    So, it wasn’t the media owners and it wasn’t the egalitarian-oriented society. Which means that the plan was sabotaged from within. Actually, you don’t have to be a rocket scientist to figure that one out, especially since Katarina Kresal’s Liberal democrats (LDS) made their displeasure with Križanič’s original plan moe than clear. So what probably happened (and this would account for the media rampage which killed the plan) is that a small lobbying operation took place, where some elements of big business reminded LDS who their really were. All that was needed were a couple of carefully placed press releases or subtle hints about KPMG’s report by one PR agency or the other, while the herding instinct of Slovenian media (not wanting to be outdone for a story) did the rest.

    But Fortune is a fickle lady as Katarina Kresal learned not long ago, when Draško Veselinovič, her pick for the top dog of NLB, failed miserably and within weeks found himself on the very end of a long wooden plank, while his political sponsor took a big black eye. She may very well get bitch-slapped yet again (metaphorically speaking, of course :mrgreen:). Only days ago the government proposed keeping all social expenditures in the next fiscal year on this year’s levels, meaning that no public sector paycheques, no pensions and no state scholarships will be adjusted for inflation in 2010 and will thus be effectively lowered. Even more, even raises that were already negotiated are to be shelved. This naturally sent shivers down the spine of most people and suddenly taxing the rich doesn’t seem such a bad idea at all…

    So far, cuts in the social expenditures are apparently a go, while taxing the rich is “not off the table”, to quote minister of labour Ivan Svetlik. But the way things are going, the government will probably have to do both anyhow, at which point little of what will be said will matter, and getting things done will be the only true measure of things

    Please Enter Your Username And Password

    The good doctor posted on whether media should be freely available on the internet or whether it should be paid for. The subject probably deserves far more thoght an analysis than just a couple of blog posts (via Jure Gostiša) but since this subject is close to the itch I still have to scratch regarding Slovenian media, I might as well chip in my two eurocents.

    20090905_blog01.jpg

    Implications of web media content being universaily charged exceed mere economic aspects of the issue. The social consequences of effectively limiting acces to content would be enormous. Information is namely much more than just a product one pays for because it has no end quantity. To put it blunty: once you eat a loaf of bread, it is gone. Once you read/hear/see a piece of information, it is still there for others to do the same.

    At first sight the dilemma is simple. Someone (a journalist working for a media company) got hold of a piece of information, has edited it, put it into context and published it, thus making it relevant to his readers/listeners/viewers (“users”). And in case of a newspaper, you pay for that by buying a copy. But since no newspaper can survive just on income from sales of its editions, it features advertisments as well. So if you pay for that piece of information by buying paper (hardcopy) version, why should you get the e-version for free?

    Things get a little more complicated in case of electronic media. Most of these around the world are free of charge and finance themselves mostly through advertising. No matter if you switch on CNN, Fox News or POP TV and Radio KAOS here in Slovenia (to pick four examples completely at random), you get them free of charge. Not entirely for free, of course, because you “pay” for viewing them by being bombaredd by tons and tons of advertising, but so it goes.

    To add to the confusion, there are public media, which are financed by some ingenious solution to get a hold of taxpayer’s money. In case of Slovenia this means a compulsory payment of a fixed sum by every household which has an electric power suppy. Which means every household. Period.

    And to muddle the picture completely, there is the so-called “citizen journalism” (bloggerati, twitterati and similar), which brings a whole new set of problems to an area which already suffers from a severe case of identity crisis.

    But in all fairnes it seems that two questions are being mixed up in this debate. The actual question is whether access to infomation should be charged. But this question often gets confused with whether information as such should be free. However, the confusion is legitimate (at least to an extent) as answer to the latter question directly influences the answer to the former question.

    Must information be free?

    To put it bluntly: yes. Please keep in mind that in our case “information” either means the abstract concept of information or (in real life) media content for more or less general consumption. Information is the fourth production factor (in addition to work, land and capital – Marxism 101). Indeed (to quote what little I remember from reading Tehranian), if Karl Marx was alive today, he would have probably entitled his seminal work Die Information rather than Das Kapital. Contrary to the other three, information is not gone when “consumed”. It remains to be “consumed” by another user (listener/viewer/reader). Therefore, information theoretically does not have a finite quantity and is thus not infuenced by the usual supply/demand logic.

    To translate this in real life: once media content is available, it will not diminish, wear, dilute or become more scarce in any way, shape or form, no matter how many people have accessed it. Furthermore, media perform (should perform) several social roles, profitability being only one of them. The other, equally important, is the role of protecting the public interest. Not public’s interest, but public interest. The latter can be defined as longterm interests of the society as a whole (citizens, instututions, various elites, the state, common values, etc…) To achieve that, information provided within media content must be as complete and as succint as possible. The third important role of the media is that of a social corrective. Those members of a society who have little or no access to the original three production factors (work, land, capital) can only compete with the rest of the society if they have unimpeded access to the forth factor, which (as we have seen) does not have a finite quantity. And in order to compete, access to information cannot be based on possession of work, land or capital. Therefore, information must be free.

    However, does this mean that media content must be free as well? Not necesarily.

    Someone has to pay

    In addition to information it provides, media content does have an added value. Ideally, having been edited, stripped of nonsense and presented in an understandable manner (did you know that most of you follow media on the level of an intelligent twelve-year-old?), content delivered is very much different from the unabrigged, “raw” reality. Pengovsky usually says that media create reality rather than simply report it, but we’ll deal with that some other time. To put is simply, creating media content costs money.

    Which is certainly not news (pun very much intended). We’ve been paying for newspapers since the dawn of time. Until twenty years ago, most countries in the world had their citizens pay a fee if they owned a TV (and in some cases a radio) receiver. Some still do. This was both a nice way to keep tabs on the citizens as well as a welcome source of income for maintaining the terrestrial transciever network. But the bottom line is that regardless of whether the newspaper, radio or television were state- or private-owned, they had to be paid for and – most importantly – people creating content had to be paid (for).

    Please enter your username and password and have your credit card ready

    Enter the internet as we know it today. Suprising as it may seem, the concept of media has changed extremely little. Despite occasional dabbling in media convergence, most media still do on-line what they do off-line. Newspapers deliver articles, TV stations deliver videos, radio station delier streams and podcasts. Most of them only publish online what they’ve already published off-line. And that was already paid for.

    I’m not kidding. Tthe article you’ve read on your favourite newspaper’s website was already paid for either by subscriers or advertisers. Otherwise it would not exist. Media companies have developed a nasty habit of treating journalists simply as “cost of labour” and if the cost of labour is not covered by income generated, well so much worse for labour. There is so little web-only content generated by media that it’s hardly worth a pair of fetid dingo’s kindeys. From this point of view it becomes obvious that any further charges to access media content on-line are meant only to boost profits of a media company. That is, of course, an entirely legitimate goal if done on a individual basis. But as an argument to have all media charge access to their content, it is hardly persuasive.

    Copyleft, copyright, copy/paste

    Then there’s the whole web 2.0 shebang. At this time the internet is a vehicle for delivering media content functions along exactly the same lines as most other electronic (non-print) media. Media companies compete for reach and relevance and try to cover costs incured, by advertising. The fact that most of them apparenty don’t cover the costs of web-presence, tells us one of three things: 1) that they suck at marketing, 2) that their reach and cerdibility leave a lot to be desired or 3) that they have a problem understanding the web. Since 1 and 2 hardly seem viable options (they would have been swept off the market had that been the case), the only other option left is that they don’t get the web.

    I don’t think a lot of people do mind you. And even those who do, are probably bluffing, so it’s really nothing to be ashamed of.

    But the advent of blogging and “citizen journalism” caught media companies completely unprepared and consequently they are running scared shitless. All of a sudden anyone can post a story on anything and since tools of the trade are becoming increasingly more accessible, the end product of citizen journalism is becoming more and more professional-looking.

    Or does it?

    They say about blogging that never in the history of mankind have so many had so little to say to so few. Sure, there are stories on blogs. But – forgive me for saying so – 95% of those would have hardy make the cut even in the most sleazy and will-publish-anything media in Slovenia. Yes, you can break a story on a blog. Yes it can be used to publish stories that are in the public interest but don’t appear in established media for one reason or another. But blogging and citizen journalism cannot replace established media. Although there is much to be said about the frightfully-fast-declining quality of the established media, they still have both the infrastrutructure as well as the manpower, knowledge and even legal protection to follow a story. Sure, most of the media are not all that they could be, but give them half a chance and you’ll see what relentless media pressure can do.

    On the other hand, what do bloggers do? They tweet, errr… microblog. And take pictures. And do Facebook. If a citizen journalist were to learn the trade for real, he/she would become “just” journalist, which is not simply a past-time activity, but a way of life. You may be disinclined to agree, but it is very much true. Just because you have a camera and a blog, you’re not yet a journalist. Just as not every asshole with a microphone does not automatically become a good journalists, but that’s another matter.

    Back to the basics

    The question therefore is not whether ot not access to media content should be charged for, but what kind of content do we get on the web. Fact of the matter is that most news content is delivered by the few global news agencies in business. Not BBC, CNN of any of the news companies which operate on te 24/7 news cycle, but rather by the old-school news agencies like Reuters, AP, DPA and AFP (to pick a couple examples at random). And most of those charge for access to their content. Just as Slovene Press Agency (STA) does. So if established media would start charging for their content, what’s to stop users to circumvent them entirely and go to press agencies directly? Especially if a lot of what we get is simply copy/pasted from news agencies as it is?

    Content. Good, informative, engaging, provocative and relevant content. That’s what media once were all about and that’s what it should be about. Some are, most aren’t. That is also the only aspect in which citizen journalism can pose any sort of a threat to its full-blooded counterpart. If journalists and media owners hadn’t become complacent and self-sufficient, the debate would be purely academic. As it is, media owners want to re-package and re-sell content which was not made for the web originally and are wondering why the hell are they bleeding users on one end and money on the other. Typically, they’re only concerned with money, whereas users enter the equation only as a source of income and not as sentient beings who want value for money. Journalists, on the other hand, instinctively know that things are taking a turn for the worse, but since they get paid poorly and will be cut loose as soon as profits take a dip, many of them are beyond caring.

    Media companies should start making content that is trully worthy of the web and takes fulll advantage of it. Then and only then will they be justified in charging for it. But I’m willing to bet that once they reach that stage, charging for content will not be necessary as advertising money will be thrown at them by a shovel-full.

    A Teaser

    The good doctor posted a wonderful post (Slovenian only) on whether access to online news should be charged or not. Pengovsky is trying to write something up in response, but it just keeps getting bigger and bigger. So it’ll have to wait a day or so. In the mean time, feel free to watch the video below (in case you haven’t seen it already) as it has some tongue-in-cheek points about the future of media. Keep in mind that it is a couple of years old, though.