Posted by hkarner - 9. Oktober 2016
Source: The New York Times
Philip Hammond, Britain’s chancellor of the Exchequer, said this week that the government would borrow more to finance new infrastructure projects.
LONDON — As Europe has grappled with the trauma of a devastating financial and economic crisis, policy makers have consistently relied on one approach to managing the damage — budget austerity.
Shrink government spending by trimming pensions and cutting social programs, the logic runs, and the markets will gain confidence in the tough-minded people in charge. Confident markets make for happy markets. Money will pour in, and good times will roll.
Even as prosperity has remained painfully elusive across much of Europe, leaders have time and again renewed their faith in the virtues of this harsh medicine.
Until now. Europe is re-examining the merits of austerity. Some policy makers are flashing tentative signs that they may be prepared to slacken their grip on public coffers to spur growth and improve the lot of ordinary people suffering joblessness and diminished wealth. In the clearest sign of this shift, the heavily indebted Italy is increasingly inclined to challenge Germany — the guardian of austerity — to loosen European purse strings. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, Deflation, Europe, Inflation, Italy, NYT, UK | Leave a Comment »
Posted by hkarner - 27. September 2016
Paola Subacchi is Research Director of International Economics at Chatham House and Professor of Economics at the University of Bologna. Her forthcoming book, The People’s Money: How China is Building an International Currency, will be published by Columbia University Press.
SEP 27, 2016, Project Syndicate
SIENA – Now that Italian Prime Minister Matteo Renzi’s credibility is weakening at home, he will need all the friends he can get to clear the hurdle of a constitutional referendum in December – and thereby avoid likely political disruption. Renzi will need the support not just of his own party, which is deeply divided over the referendum, but also of an Italian electorate that has grown disillusioned with politics in general.
The referendum has become a litmus test for Renzi and his government partly because of his ill-considered warning earlier this year that he would resign if the proposed reform of the Senate (the parliament’s upper house) were voted down. But Renzi’s bigger problem is that he is a mid-term, unelected prime minister who promised, in 2014, to bring change to a country that has heard it all before. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, Euro, Finanzkrise, Italy, Project Syndicate, Renzi, Subacchi, Unemployment | Leave a Comment »
Posted by hkarner - 3. Juli 2016
Posted on July 1, 2016 by Ellen Brown, Web of Debt
Brexit could trigger a $500 trillion derivatives meltdown, by forcing the EU to allow insolvent member governments and banks to write down debt. Italy is in financial crisis and is already petitioning for that concession. How to avoid collapse of the massive derivatives house of cards? Alternatives are considered.
Sovereign debt – the debt of national governments – has ballooned from $80 trillion to $100 trillion just since 2008. Squeezed governments have been driven to radical austerity measures, privatizing public assets, slashing public services, and downsizing work forces in a futile attempt to balance national budgets. But the debt overhang just continues to grow.
Austerity has been pushed to the limit and hasn’t worked. But default or renegotiating the debt seems to be off the table. Why? According to a June 25th article by Graham Summers on ZeroHedge:
. . . EVERY move the Central Banks have made post-2009 has been aimed at avoiding debt restructuring or defaults in the bond markets. Why does Greece, a country that represents less than 2% of EU GDP, continue to receive bailouts instead of just defaulting?
Summers’ answer – derivatives:
[G]lobal leverage has exploded to record highs, with the sovereign bond bubble now a staggering $100 trillion in size. To top it off, over $10 trillion of this is sporting negative yields in nominal terms. . . .
Globally, over $500 trillion in derivatives trade [is] based on bond yields.
But Brexit changes everything, says Summers. Until now, the EU has been able to reject debt forgiveness as an alternative, using the threat of financial Armageddon if the debtor country left the EU. But Britain has left, and Armageddon hasn’t hit. Other Eurozone nations can now threaten to do the same if they don’t get debt forgiveness or a restructuring.
The First Domino – Italy Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, Bail-in, Banken, Brexit, Brown, Debt, Derivatives, Haircut, Italy, Restructuring, Web of debt | Leave a Comment »
Posted by hkarner - 8. Juni 2016
Posted on June 6, 2016 by iMFdirect
The global financial crisis led to a broad rethink of macroeconomic and financial policies in the global academic and policy community. Eight months into the job as IMF Chief Economist, Maury Obstfeld reflects on the IMF’s role in this rethinking and in furthering economic and financial stability.
In an interview, Obstfeld notes that given the impacts of IMF decisions on member countries and the global economic system, it is especially important for the institution to constantly re-evaluate its thinking in light of new evidence.
He talks about fiscal policy, citing that “nobody wants needless austerity,” as well as on the Fund’s work on capital flows and trade.
Even as the Fund’s thinking evolves, Obstfeld says that the process has not “fundamentally changed the core of our approach, which is based on open and competitive markets, robust macro policy frameworks, financial stability, and strong institutions.”
Posted in Artikel | Verschlagwortet mit: austerity, IMF, Obstfeld | Leave a Comment »
Posted by hkarner - 7. Juni 2016
Der fehlgeleitete Glaube an die Allmacht des Marktes hat im Euroraum vielfach zu einem Teufelskreis aus Austeritätspolitik, Wirtschaftseinbruch, steigender Arbeitslosigkeit und sozialer Not geführt. Ein gemeinsames Finanzministerium könnte Abhilfe schaffen.
Die Euro-Krise, welche sich an die globale Finanzkrise 2008/09 anschloss, dauert nun schon sechs Jahre. Während in anderen Ländern der Welt eine weniger restriktive Sparpolitik des Staates wesentlich zur Erholung der Wirtschaft beitrug, erlebte die Eurozone eine lange Phase von Rezession und Stagnation. Denn hier wurde auf ein vermeintliches Staatsschuldenproblem mit Haushaltskürzungen reagiert.
Souveräne Staaten und schwäbische Hausfrauen
Diese Diagnose aber ist problematisch, da ein Staat nicht mit der vielzitierten schwäbischen Hausfrau gleichzusetzen ist. Während diese sich tatsächlich Gedanken machen muss, woher sie denn ihr Geld bekommt, um ihre Ausgaben zu bestreiten, kann der Staat dabei auf seine Zentralbank zurückgreifen. Entweder verkauft letzterer direkt Staatsanleihen an die Zentralbank, oder er verkauft sie an Banken, die wiederum die Staatsanleihen an die Zentralbank weiterverkaufen. Da der Staat dies unbegrenzt tun kann, ist ein Staatsbankrott komplett ausgeschlossen, so lange der Staat in seiner eigenen Währung verschuldet ist. Selbst in Krisenzeiten schießen aus diesem Grund die Zinsen für Staatsanleihen nicht in die Höhe: Es zweifelt schlicht niemand an der Zahlungsfähigkeit des Staates. Dieser Umstand erklärt auch das niedrige Zinsniveau außerhalb der Eurozone, wo es nirgends zu Problemen mit staatlicher Insolvenz kam. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, Euro, Makroskop, Recession | Leave a Comment »
Posted by hkarner - 1. Mai 2016
J. Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.
APR 29, 2016, Project Syndicate
BERKELEY – For countries where nominal interest rates are at or near zero, fiscal stimulus should be a no-brainer. As long as the interest rate at which a government borrows is less than the sum of inflation, labor-force growth, and labor-productivity growth, the amortization cost of extra liabilities will be negative. Meanwhile, the upside of extra spending could be significant. The Keynesian fiscal multiplier for large industrial economies or for coordinated expansions is believed to be roughly two – meaning that an extra dollar of fiscal expansion would boost real GDP by about two dollars.
Some point to the risk that, once the economy recovers and interest rates rise, governments will fail to make the appropriate adjustments to fiscal policy. But this argument is specious. Governments that wish to pursue bad policies will do so no matter what decisions are made today. And to the extent that this risk exists at all, it is offset by the very tangible economic benefits of stimulus: improved labor-force skills, higher business investment, faster business-model development, and new, useful infrastructure. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, DeLong, Helicopter Money, Project Syndicate, Stimulus | Leave a Comment »
Posted by hkarner - 3. April 2016
Jean Pisani-Ferry is a professor at the Hertie School of Governance in Berlin, and currently serves as Commissioner-General of France Stratégie, a policy advisory institution in Paris.
MAR 31, 2016, Project Syndicate
PARIS – If you do not understand what is happening to the eurozone economy, you are not alone. One day we are told that growth is definitely passé; the next that recovery is on track; and the third that the European Central Bank is considering sending checks to all citizens to boost output and revive inflation. Rarely has the economic picture been so confusing.
Start with medium-term growth. Since the global financial crisis erupted in 2008, productivity has grown at a snail’s pace. Oddly, the smartphones’ magic computing power does not seem to offset the slowdown in efficiency gains in manufacturing and standard services. For almost a decade, annual productivity growth in the advanced economies has been close to 1%, versus 2% previously.
This may be a temporary lull or a statistical illusion. But with no evidence that it will end, policymakers have downgraded their forecasts. Since 2010, the US Congressional Budget Office has lowered its outlook for productivity growth in the decade to 2020 from 25% to 16%; so has the United Kingdom’s Office for Budget Responsibility, reducing its forecast from 22% to 14% productivity growth. Everyone is adjusting to leaner times. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, ECB, Euro, Europe, Growth, Innovation, Pisani-Ferry, Project Syndicate, Recession | Leave a Comment »
Posted by hkarner - 28. Oktober 2015
Simon Tilford is Deputy Director at the Center for European Reform.
OCT 28, 2015, Project Syndicate
LONDON – Spain is the eurozone’s latest poster child for austerity and structural reforms. Its economy has expanded for eight consecutive quarters, steadily gaining momentum and easily outperforming the rest of the currency union. Export growth has matched that of Germany; unemployment has fallen by over a million people in two years; investment is picking up; and industrial production has jumped 5% in the last 12 months.
But Spain’s recovery is not quite what it seems, and there is scant evidence that what progress the country has made is the result of austerity and reforms.
In fact, far from adhering to the usual austerity narrative – according to which fiscal consolidation revives business confidence and thus investment and job creation – Spain’s return to growth partly reflects the easing of austerity since early 2014. The country has sensibly resisted pressure from the European Commission to take more aggressive steps to reduce its deficit, which, at 5.9% of GDP, was the European Union’s third highest last year. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, Euro, Finanzkrise, Project Syndicate, Spain, Tilford | Leave a Comment »
Posted by hkarner - 13. Oktober 2015
Deutsche Wirtschafts Nachrichten | Veröffentlicht: 13.10.15 00:26 Uhr
Russland will große Einschnitte bei den Staatsausgaben vornehmen. Die Austeritätspolitik ist eine Reaktion auf die sich verschlechternde Lage wegen des Rohstoff-Schocks. Die Regierung in Moskau schließt auch Einschnitte im Sozialsystem nicht aus.
Denn man müsse zugeben, dass die aktuelle Krise im Vergleich zum September 2014 weitaus intensiver sei. Den Rest des Beitrags lesen »
Posted in Artikel | Verschlagwortet mit: austerity, DWN, Golikowa, Putin, Russia | Leave a Comment »