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Archive for 3. Februar 2020

Stimmungswandel in Davos?

Posted by hkarner - 3. Februar 2020

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His most recent book is People, Power, and Profits: Progressive Capitalism for an Age of Discontent

DAVOS – Dieses Jahr markierte das 50-jährige Jubiläum der Vorzeigeveranstaltung des Weltwirtschaftsforums, des Treffens der weltweiten Wirtschafts- und Politikeliten in Davos (Schweiz). Seit meiner ersten Teilnahme dort im Jahr 1995 hat sich eine Menge verändert. Damals herrschten Euphorie über die Globalisierung, Hoffnung auf den Übergang der ehemals kommunistischen Länder zur Marktwirtschaft und die Zuversicht, dass neue Technologien neue Perspektiven eröffnen würden, von denen alle profitieren würden. Die Unternehmen würden dabei – in Zusammenarbeit mit den Regierungen – die Richtung weisen.

Heute ist die Stimmung angesichts der Klima-, Umwelt- und Ungleichheitskrisen, vor denen die Welt steht, eine ganz andere. Facebook, das unabhängig von den Folgen für die Demokratie bereit ist, Fehl- und Desinformation sowie politischer Manipulation eine Plattform zu bieten, hat die Gefahren einer privat kontrollierten monopolistischen aufgezeigt. Viele Unternehmensführer, und zwar nicht nur die im Finanzsektor, haben eine bemerkenswerte moralische Verkommenheit an den Tag gelegt.Darüber hinaus steht der Multilateralismus unter Beschuss. Sein traditionell stärkster Verteidiger, die USA, hat nun eine Regierung, die sich dem Motto „America First“ verschrieben hat und die sich dazu bekennt, die weltweite Zusammenarbeit zu untergraben, obwohl die Notwendigkeit zur Kooperation in einer Vielzahl von Bereichen – darunter Frieden, Gesundheit und Umwelt – immer deutlicher wird. Den Rest des Beitrags lesen »

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The Real Brexit Negotiations Start Now

Posted by hkarner - 3. Februar 2020

Willem H. Buiter

Willem H. Buiter, a former chief economist at Citigroup, is a visiting professor at Columbia University.

It is not an exaggeration to argue that the real negotiations about the future relationship between the United Kingdom and the European Union are starting only now. The UK can now look forward to painful grind of negotiations and policy implementation, probably lasting many years.

NEW YORK – With the United Kingdom set to withdraw from the European Union at 23:00 GMT on January 31, Prime Minister Boris Johnson will finally achieve the Brexit he has championed for the last four years. But, as the saying goes, be careful what you wish for. 

Four issues were part of the divorce agreement that Johnson concluded with the EU and Parliament approved this month: future contributions to the EU budget, the treatment of legacy citizens (both EU citizens in the UK and British citizens living in the EU), Northern Ireland’s place in the EU customs union and single market, and the continuing jurisdiction of the European Court of Justice.But even at this late hour, there is still pervasive uncertainty about the nature of the trade regime, the wider economic relationship, and the political relationship between the UK and the EU that will prevail after the transition period ends.

Comparable uncertainty surrounds the nature of the trade regimes and wider economic arrangements the UK will enter into with non-EU states. And, despite Johnson’s emphatic assertions that there will be no extension of the transition period, his failure to deliver Brexit on October 31 last year, as promised, suggests that we should never say never.It is not an exaggeration to argue that the real negotiations about the future relationship between the UK and the EU are starting only now (actually, on March 1). The political declaration concerning the post-Brexit relationship between the UK and the EU that accompanied the Withdrawal Bill is not legally binding; it represents aspirations and good intentions, but nothing more.The duration of almost all trade negotiations is measured in years, not months. The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada, signed on October 30, 2016, took more than a decade to conclude, if we date the start of the process to the March 2004 accord on a framework for a new Canada-EU Trade and Investment Enhancement Agreement. And seven years were required after the launch of formal talks in May 2009. In fact, CETA is still not in force, although substantial parts of it are being provisionally applied pending approval by all signatories.It is important to remember that tariffs and quotas are only the tip of the iceberg in trade negotiations. There are many visible and invisible barriers to trade. Other legal, regulatory, administrative, bureaucratic, and political obstacles; subsidies and taxes; anti-dumping legislation; restrictions on foreign direct investment; and exchange-rate manipulation can result in zero trade, despite the complete absence of tariffs and quotas.

Protectionism can masquerade as environmental, labor, food, or phytosanitary standards; local content requirements; defense of infant industries; intellectual property rights; climate change interventions; and more. In October 1982, the French government ingeniously required that all Japanese VCR imports enter the country via Poitiers, a small town hundreds of miles from the nearest significant shipping port. This non-tariff trade barrier remained in place until April 1983.

So, the dominant characteristic of the UK’s future trade arrangements and wider economic and political relationship with the EU is pervasive uncertainty. Its trade and wider economic relationships with non-EU member states will be negotiated from a position of weakness relative to that of the European Union, when it negotiates as a single bloc on behalf of its member states.Some Brexiteers may think they can pull it off, but Johnson’s promise to turn the UK into an across-the-board deregulatory, low-tax haven is not credible. Johnson’s Toryism – a big-government, dirigiste, one-nation formula with populist overtones – rules out “Singapore-on-Thames.” At most, such an approach might be attempted for the financial sector.Regulatory arbitrage could certainly produce substantial changes in the rules of the game for the investing industries (MiFID II) and the insurance industry (Solvency II). While the City of London will undoubtedly lose business to its EU27 competitors, it could be legislated and deregulated into a position enabling it to attract new business from the EU as well as from the wider global economy. I doubt whether Sunderland and the rest of the UK car industry will be able to transform their tax and regulatory regimes and the industrial culture in which they are embedded in such a way as to make them viable competitors after 2020.Of the EU’s four freedoms, the end of free movement for EU citizens will likely cause the most severe and lasting damage to the supply side of the UK economy. Again, it is in principle possible to mitigate most or even all these costs by an enlightened globally oriented immigration policy, along the lines of the Australian or Canadian models. But the post-Brexit political equilibrium in the UK is unlikely to generate an efficient, points-based immigration regime, or one that attracts talented foreign students.The UK avoided one disaster when voters rejected the hard-left Jeremy Corbyn in December. But it is not out of the woods. It can now look forward to the painful grind of negotiations and policy implementation, probably lasting many years, to make the best of a bad Brexit.

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Salvini’s Sardine surprise

Posted by hkarner - 3. Februar 2020

Date: 30‑01‑2020

Source: The Economist

Regional elections in Italy buttress the government

Another blunder by the populist leader of the Northern League

It is probably the most famous of modern Italian political aphorisms. “Power wears out those who do not have it,” quipped the late Giulio Andreotti, a long‑serving prime minister. His words had a special relevance this week for Matteo Salvini, leader of the right‑wing Northern League, as he pondered the results of his second big miscalculation in five months. On January 26th the League’s candidate for governor failed to conquer the region of Emilia‑Romagna in a vote that Mr Salvini had touted as a referendum on whether he should lead Italy.

Mr Salvini has only been out of power since August last year. Until then he was one of two deputy prime ministers in the first cabinet of Giuseppe Conte, a technocrat; he wielded a decisive influence over policy as head of the party that has led in the polls since mid‑2018. But then he torpedoed the coalition government in a bid to force an election, hoping it would give him an outright parliamentary majority and untrammelled powers. His rivals responded by forming a new coalition without him. Den Rest des Beitrags lesen »

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The British government wants to reshape immigration after Brexit

Posted by hkarner - 3. Februar 2020

Date: 30‑01‑2020

Source: The Economist

But the new system will probably look quite like the old one

One phrase has cropped up again and again in Britain’s migration debate since 2005. That was the year Tony Blair, running for his third term as prime minister, promised an Australian‑style points‑based immigration system. As down under, marks could be awarded for, say, qualifications, linguistic ability or relative youthfulness. The idea is popular on the right, too: Nigel Farage, one of the architects of Brexit, often talks about it.

Britain’s membership of the European Union meant such a scheme could never be applied to all arrivals. Its rules allowed any citizen of another member state to move to Britain, regardless of their characteristics. In some years, the bloc supplied most of Britain’s newcomers. But Brexit changes the calculus. Boris Johnson, the prime minister, has promised to end freedom of movement and reshape immigration. His home secretary, Priti Patel, tasked the Migration Advisory Committee, an official panel of wonks, to look to Australia. Den Rest des Beitrags lesen »

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