Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘austerity’

Climbing Out of Debt

Posted by hkarner - 2. März 2018

A new study offers more evidence that cutting spending is less harmful to growth than raising taxes

Alberto Alesina, Carlo A. Favero, and Francesco Giavazzi, IMF Blog 1 Mar 2018

Almost a decade after the onset of the global financial crisis, national debt in advanced economies remains near its highest level since World War II, averaging 104 percent of GDP. In Japan, the ratio is 240 percent and in Greece almost 185 percent. In Italy and Portugal, debt exceeds 120 percent of GDP. Without measures either to cut spending or increase revenue, the situation will only get worse. As central banks abandon the extraordinary monetary measures they adopted to battle the crisis, interest rates will inevitably rise from historic lows. That means interest payments will eat up a growing share of government spending, leaving less money to deliver public services or take steps to ensure long-term economic growth, such as investing in infrastructure and education. Servicing debt will become a major burden.

What is the best way to reduce debt to sustainable levels? That question has taken on renewed importance since the global financial crisis of 2008, when government spending to stimulate growth and help the unemployed boosted budget deficits to postwar records. Some economists argue that cutting spending is the best medicine for restoring fiscal health. Others insist, on the contrary, that spending cuts are self-defeating, because they hurt economic growth. They prescribe even more government spending to reinvigorate a flagging economy. Den Rest des Beitrags lesen »

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The “captivating” tightrope walker: what to expect from the new Eurogroup head

Posted by hkarner - 19. Januar 2018

João Paulo Batalha 

 Portuguese Finance minister Mário Centeno, hailed as the man who took on austerity and won, is taking over as Eurogroup head. What difference will he make?

João Paulo Batalha is a social activist and founding member of Transparency International Portugal

Reading the economic press, you might think some sort of quiet revolution – or, at the very least, substantive evolution – is about to take place at the Eurogroup. This is the informal, but increasingly powerful, gathering of euro-zone finance ministers who determine what our pocketbooks, and our lives, will look like in the future. The election last month of Portuguese finance minister Mário Centeno to head the group was seen as the triumph of the European left against the forces of austerity. Writing in Foreign Policy shortly after Centeno’s election about a month ago, the Berlin-based journalist Paul Hockenos argued that the German government’s support for the Portuguese minister may signal a quiet shift in policy by Chancellor Angela Merkel. She and Wolfgang Schäuble – until recently her finance minister – had been champions of EU-wide austerity.

After Centeno’s election, economists and analysts presented the Portuguese minister as something of a wizard, who has been able to reverse some of the most bruising measures taken at the height of austerity while maintaining tight controls on the deficit. Sceptical at first (even outright hostile), none other than Germany’s notorious fiscal hawk, Mr Schäuble, ended up praising Centeno as “the Cristiano Ronaldo of the euro zone” – probably not knowing that the Portuguese football star is dealing with a serious charge of tax evasion in Spain; so, probably not the most apt comparison. Den Rest des Beitrags lesen »

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Is Euroland on Verge of Disintegration?

Posted by hkarner - 21. April 2017

Dank an H.F.
20.04.2017 Author: F. William Engdahl, NEO

Since the global financial crisis of 2008 little significant has been done by Brussels or the governments of the 19 member Eurozone countries to bring the largest banks of the Eurozone into a healthy stability. On the contrary, even venerable mega-banks like Germany’s Deutsche Bank are teetering on the brink.

In Italy the world’s oldest bank, Monte Paschi di Siena, is on state life-support. That is but the tip of an iceberg of Italian bank bad debts. Today in total Italy’s banks hold Italy’s banks hold €360 billion of bad loans or 20% of Italy’s GDP, which is double the total five years ago.

It gets worse. Italy is the fourth largest economy in the EU. Its economy is in dismal shape so bank bad loans grow. State debt is almost as high as that of Greece, at 135% of GDP. Now, since the 2013 Cyprus bank crisis, the EU has passed a stringent new bank “bail-in” law, largely under German pressure. It stipulates that in event of a new banking crisis, a taxpayer bailout is prohibited until bank bond-holders and, if necessary as in Cyprus, its bank depositors, first “bail-in” or take the loss. In Italy, most holders of bank bonds are ordinary Italian citizens, with some €200 billion worth, who were told bank bonds were a secure investment. No more.

German Austerity Medicine Killing Patient Den Rest des Beitrags lesen »

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The Trump Deficit

Posted by hkarner - 17. Januar 2017

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Can the EU Survive Populism?

Posted by hkarner - 4. Januar 2017

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Soros: Angela Merkel hat Zerfall der EU ausgelöst

Posted by hkarner - 29. Dezember 2016

Deutsche Wirtschafts Nachrichten  | 

Merkel SorosDer Investor George Soros sieht die EU am Ende. Die Schuld gibt er Angela Merkel.

George Soros liefert in einem Artikel für das Project Syndicate eine düstere Analyse über den Zustand der EU: Nach Ansicht des einflussreichen Investors ist die EU am Ende, weil Deutschland sich nur an seinen „engen eigenen Interessen“ orientiert habe. Anders als die USA nach dem Zweiten Weltkrieg hätten Deutschland den „anderen Nationen ein Austeritätsprogramm auferlegt“, statt ihnen mit nach der Lehman-Pleite im Jahr 2008 mit einem neuen Marshall-Plan zu helfen.

Der Zerfall sei durch Bundeskanzlerin Angela Merkel ausgelöst worden: „Als Lehman kollabierte hat sich Deutschland nicht reich genug gefühlt, um zusätzliche Verpflichtungen zu übernehmen. Als die europäischen Finanzminister erklärten, dass sie keine andere systemisch wichtige Finanzinstitution scheitern lassen würden, hat die deutsche Bundeskanzlerin Angela Merkel erklärt – indem sie die Wünsche ihrer Wähler richtig interpretierte -, dass jeder Mitgliedsstaat die Sorge um seine eigenen Institutionen selbst übernehmen müsse. Dies war der Beginn des Prozesses des Zerfalls.“ Den Rest des Beitrags lesen »

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The IMF is Not Asking Greece for More Austerity

Posted by hkarner - 14. Dezember 2016

Posted on by iMFdirectObstfeld

By Maurice Obstfeld (pictured) and Poul M. Thomsen

Greece is once again in the headlines as discussions for the second review of its European Stability Mechanism (ESM) program are gaining pace. Unfortunately, the discussions have also spurred some misinformation about the role and the views of the IMF. Above all, the IMF is being criticized for demanding more fiscal austerity, in particular for making this a condition for urgently needed debt relief. This is not true, and clarifications are in order.

The IMF is not demanding more austerity. On the contrary, when the Greek Government agreed with its European partners in the context of the ESM program to push the Greek economy to a primary fiscal surplus of 3.5 percent by 2018, we warned that this would generate a degree of austerity that could prevent the nascent recovery from taking hold. We projected that the measures in the ESM program will deliver a surplus of only 1.5 percent of GDP, and said this would be enough for us to support a program. We did not call for additional measures to achieve a higher surplus. But contrary to our advice, the Greek Government agreed with the European institutions to temporarily compress spending further if needed to ensure that the surplus would reach 3.5 percent of GDP. Den Rest des Beitrags lesen »

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The Rise of Anti-Establishment Italy

Posted by hkarner - 10. Dezember 2016

By on December 8, 2016  RGE EconoMonitorSteinbock

After the UK Brexit and the Trump triumph in the US, the rise of anti-establishment Italy is hardly a surprise. It is the effect of half a decade of failed austerity doctrines in Europe and decades of failed political consolidation in Italy – ever since the notorious Tangentopoli scandals.

While Italy’s constitutional referendum heralds a political earthquake that will eventually affect both France and Germany, the immediate result is more uncertainty in economy, political polarization and market volatility.

End of an era in Italy – and Europe

Only hours after Italians had casted their ballot in the referendum on constitutional reforms, Prime Minister Matteo Renzi announced his resignation after heavy defeat.

Renzi’s ‘Yes’ camp included most of his Democratic Party (DP) and centrist allies, and the tacit support of moderate voters, including some from Silvio Berlusconi’s Forward Italy (FI). In turn, the opposition lineup featured Beppe Grillo’s Five Star Movement (M5S), the regional Northern League (NL) led by Matteo Salvini in alliance with the far-right Brothers of italy’s (Fdl) and Berlusconi’s Forward Italy (FI), a significant minority of PD allies, a number of small leftist groups,

According to projections, almost 60% of voters rejected constitutional changes. “My government ends here,” said Renzi from Palazzo Chigi. Moments later, he acknowledged that his pledge to resign if defeated at the polls had been a mistake. Den Rest des Beitrags lesen »

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Euro-Gruppe erwägt Abschied von der Austeritäts-Politik

Posted by hkarner - 7. Dezember 2016

Deutsche Wirtschafts Nachrichten  | 

Die Euro-Gruppe erwägt einen vorsichtigen Abschied von der Austeritäts-Politik – und setzt Deutschland sanft unter Druck.

DijsselbloomDie Euro-Finanzminister haben sich der Aufforderung der EU-Kommission nur teilweise angeschlossen, dass Staaten wie Deutschland eine lockerere Haushaltspolitik zur Ankurbelung der Wirtschaft einschlagen sollten. In einer am Montagnachmittag veröffentlichten Erklärung der Eurogruppe hieß es, dass Deutschland, Luxemburg und die Niederlande ihre gute Haushaltslage nutzen „könnten“, um die Binnennachfrage und Wachstumsmöglichkeiten zu stärken. Dies hänge ab von den besonderen Umständen des Landes, während zugleich die mittelfristigen Ziele sowie die Vorrechte der jeweiligen Regierung und die nationalen Regeln respektiert werden müssten.

Die EU-Kommission hatte Mitte November angeregt, dass im kommenden Jahr in der Euro-Zone insgesamt 0,5 Prozent der Wirtschaftsleistung mehr investiert werden könnten. Die Brüsseler Behörde erwähnte Deutschland dabei zwar zunächst nicht ausdrücklich, sie zog damit aber trotzdem heftige Kritik durch Bundesfinanzminister Wolfgang Schäuble auf sich, der ihr Kompetenzüberschreitung vorwarf. Den Rest des Beitrags lesen »

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Trump the 1%

Posted by hkarner - 26. November 2016

Dank an H.F.!

By  Hudson  Hudson

Michael Hudson: Donald Trump Wants to Make the 1% Even Richer,” The Real News Network, November 18, 2016.

Economist Michael Hudson explains how economic terms like capital gains are deployed to mislead the public about who is benefiting from economic policy and where wealth is going.

 

SHARMINI PERIES, TRNN: Welcome back to the Real News Network. I’m Sharmini Peries coming to you from Baltimore.

Today I’m being joined in our Baltimore studio by economist Michael Hudson. Michael has a new book out January 20 – J is for Junk Economics: A Survivor’s Guide to Economic Vocabulary in an Age of Deception. Michael is a distinguished Research Professor of Economics at the University of Missouri, Kansas City. Thanks so much for joining us Michael.

MICHAEL HUDSON: Good to be here in your Baltimore studio.

PERIES: Thank you. So Michael, in the first segment we spoke more generally in terms of how people are misled through our policy makers in Washington in particular. But give us some specific examples of some of the terms used to mislead us. Den Rest des Beitrags lesen »

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