Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Debt’

How to address the EU’s democratic deficit

Posted by hkarner - 27. März 2017

Good analysis! (hfk)

Date: 23-03-2017
Source: The Economist

The institutions need reform

Voting is the easy part

THE EU’S INSTITUTIONS, built up over six decades, are not ideally suited to responding flexibly to challenges such as the single currency, migration or foreign and security policy. The club remains vulnerable to the charges of operating with a “democratic deficit” that alienates many voters.

Start with what is still the central institution, the European Commission. Headed by Jean-Claude Juncker, a long-time prime minister of Luxembourg, it is much more than a civil service; it is the guardian of the treaties, the originator of almost all legislation and the sole executor of the EU’s budget. By the standards of most governments it is also small, employing only around 33,000 people—about the same as a largish local council in one of the member countries (though commission staff command much more lavish salaries).

The Juncker commission has done some good things; in particular, it has sharply reduced the volume of regulation it proposes. Yet it suffers from having too many commissioners (28, one per member country), a defect that has been only partially dealt with by the creation of senior vice-presidents and junior commissioners. One consequence is that, even more than before, the commission is more or less run by Mr Juncker’s powerful cabinet under Martin Selmayr, a German official. The commission has also allowed itself to be influenced too heavily by the European Parliament, the only institution that can dismiss it, instead of acting as a balance between the Council of Ministers (representing national governments) and the parliament as the two co-legislators in the system. Den Rest des Beitrags lesen »

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Tax Reform: The Good, the Bad, and the Really Ugly—Part Five

Posted by hkarner - 9. März 2017

By John Mauldin, March 7, 2017

“A tax loophole is something that benefits the other guy. If it benefits you, it is tax reform”

– Russell B. Long

“Corporate tax reform is nice in theory but tough in practice.”

– Andrew Ross Sorkin

“I hold it that a little rebellion, now and then, is a good thing, and as necessary in the political world as storms in the physical. Unsuccessful rebellions, indeed, generally establish the encroachments on the rights of the people, which have produced them. An observation of this truth should render honest republican governors so mild in their punishment of rebellions, as not to discourage them too much. It is a medicine necessary for the sound health of government.”

– Thomas Jefferson, in a letter to James Madison. January 30, 1787 (230 years ago) Den Rest des Beitrags lesen »

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Europe’s Periphery Debt Market Welcomes New Member: France

Posted by hkarner - 22. Februar 2017

Date: 21-02-2017
Source: The Wall Street Journal

Some investors are selling French government debt over concerns the country could leave the eurozone

Le PenA poll on Monday showing French presidential candidate Marine Le Pen in the lead for April’s first round of the presidential election drove yields on French 10-year bonds to jump to 1.064%.

Investors are once again selling the bonds of Europe’s peripheral economies amid political concerns. This time around, France has joined the club.

Some investors are selling French government debt, worried that the country will elect Marine Le Pen as its president, a candidate that has promised to take the country out of the eurozone. That has left French bonds behaving increasingly like their peers in the parts of Europe hit hardest by the 2011-12 sovereign-debt crisis.

It is quite a flip for Europe’s second-largest economy. After that crisis, French bonds traded with Germany’s. On Monday, a poll showing Ms. Le Pen comfortably in the lead for April’s first round of the presidential election drove yields on French 10-year bonds to jump to 1.064%. Yields rise as bond prices fall. Den Rest des Beitrags lesen »

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Die-grosse-Schuldenorgie-der-Industriestaaten-faengt-erst-an.

Posted by hkarner - 21. Februar 2017

https://www.welt.de/finanzen/article162229074/Die-grosse-Schuldenorgie-der-Industriestaaten-faengt-erst-an.html

zinsen-10-j-staatsanleihen

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When the IMF evaluates the IMF

Posted by hkarner - 19. Februar 2017

Charles WyploszWyplosz

17 February 2017, voxeu 

The requirement that the IMF self-assesses and publishes its interventions in the case of programmes with exceptional access was adopted in the wake of the highly controversial East Asian crisis. Exceptional access occurs when the amounts lent by the Fund exceed the normal ceiling of 145% of the country’s quota per year, or a total of 435%. (At the time the limits were 200% and 600%, respectively). A first programme provided for 3200% of the Greek quota. As it was going astray in 2012, it was interrupted and replaced with a second programme worth 2159% of the quota. These are numbers never seen before. Den Rest des Beitrags lesen »

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Germany-IMF Staredown on Greece: The Election Calculus

Posted by hkarner - 14. Februar 2017

Posted on February 13, 2017 by Yves Smith

The next big round of extend and pretend for Greece isn’t set to take place until July, yet serious jockeying between the key actors, the IMF versus the European countries acting as lenders, is underway now. Why? The politicians and Eurocrats are keen to get a deal, at least in general terms, agreed now so as to keep Greece out of the headlines as much as possible for an upcoming series of European elections.

Of course, the European view of “getting to a deal” means knuckling the IMF into joining a new round of financing. As we’ve discussed since 2015, the Fund’s staff has been in open revolt, and has leaked important internal documents to the press more than once, making clear the agency’s view that Greek debts are not sustainable (note that these leaks may have been sanctioned at a more senior level). By the Fund’s own rules, that means it cannot provide additional loans. The latest Financial Sustainability Report reached the same conclusion, although it did uncharacteristically say that some fund directors (as in board members) did not agree with that view.

If the IMF does not provide more dough, the consequences are serious, as we’ve stressed and Wolfgang Munchau underscores in a comment at the Financial Times: Den Rest des Beitrags lesen »

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Fiscal Hole Will Test President Donald Trump’s Agenda

Posted by hkarner - 7. Februar 2017

Date: 06-02-2017
Source: The Wall Street Journal

President’s appetite for stimulus comes up against budget realities and some fellow Republicans

President Trump’s stated goal for more spending on infrastructure appears out of step with GOP elected officials.

For an economy that isn’t in recession, the U.S. is facing one of the bleakest fiscal outlooks since World War II. One question that President Donald Trump will soon have to decide: How much is he willing to embrace even wider deficits?

The answer will determine whether Mr. Trump’s domestic agenda lives up to markets’ bold expectations, and his own.

Before Mr. Trump does anything, growing budget deficits are already on a course to push federal debt to record levels as a share of gross domestic product. That will make it extremely difficult to make good on promises to cut taxes and boost spending without spilling more red ink.

Unlike past periods, deficits are swelling not because of an economic downturn or a short-term boost in discretionary spending, but because of the costs of caring for an aging population. Medicare and Social Security are the biggest projected drivers of spending. Ten years ago, some 6,700 Americans turned 65 every day. The number is now 9,800 Americans, and it will rise to 11,700 by 2026. Den Rest des Beitrags lesen »

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Nailed it: How Martin Luther has shaped Germany for half a millennium

Posted by hkarner - 7. Januar 2017

Date: 05-01-2017
Source: The Economist

luther-ccThe 500th anniversary of the 95 theses finds a country as moralistic as ever

SET foot in Germany this year and you are likely to encounter the jowly, dour portrait of Martin Luther. With more than 1,000 events in 100 locations, the whole nation is celebrating the 500th anniversary of the monk issuing his 95 theses and (perhaps apocryphally) pinning them to the church door at Wittenberg. He set in motion a split in Christianity that would forever change not just Germany, but the world.

At home, Luther’s significance is no longer primarily theological. After generations of secularisation, not to mention decades of official atheism in the formerly communist east (which includes Wittenberg), Germans are not particularly religious. But the Reformation was not just about God. It shaped the German language, mentality and way of life. For centuries the country was riven by bloody confessional strife; today Protestants and Catholics are each about 30% of the population. But after German unification in the 19th century, Lutheranism won the culture wars. “Much of what used to be typically Protestant we today perceive as typically German,” says Christine Eichel, author of “Deutschland, Lutherland”, a book about Luther’s influence. Den Rest des Beitrags lesen »

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Why Putin’s Economy Survives

Posted by hkarner - 31. Dezember 2016

Date: 30-12-2016
Source: The Wall Street Journal

Conservative fiscal and monetary policies, plus an autocrat’s ability to impose austerity measures, keep Russia afloat where the Soviet Union sank

“Whoever does not miss the Soviet Union has no heart,” Russian President Vladimir Putin famously said in 2010. But he quickly added, “Whoever wants it back has no brain.”

Mr. Putin isn’t usually known as a savvy economic steward. Yet as we mark the 25th anniversary of the Soviet Union’s collapse this week, his famed comments sum up the increasingly clear results of an epic historical experiment. To run that experiment, first, take two authoritarian regimes based in Moscow, one rooted in state-run socialism, the other in crony capitalism. Next, expose them both to a series of shocks: low oil prices, costly military adventures abroad, confrontation with the West and a sluggish economy in which political dictates override market forces. Then wait several years to see which regime survives.

When the Soviet Union confronted this array of challenges in the mid-1980s, it promptly collapsed. But facing very similar forces today, Mr. Putin’s government has survived—even thrived. What has made the difference, above all, is Mr. Putin’s devotion to conservative fiscal and monetary policies, coupled with an authoritarian’s ability to implement austerity measures without consulting his population. Den Rest des Beitrags lesen »

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