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Posts Tagged ‘Project Syndicate’

The Prehistory of Merkel’s Latest Coup

Posted by hkarner - 2. Juni 2020

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

German Chancellor Angela Merkel seems to see the historical writing on the wall. Her agreement to a €500 billion European recovery fund suggests that the COVID-19 pandemic has done what recent debt, refugee, and foreign-policy crises could not: inaugurate a new phase of the European project.

PRINCETON – Throughout her long chancellorship in Germany, Angela Merkel has repeatedly shown that she is good for a surprise. Now, she’s outdone herself.

In 2010, Merkel bucked expectations by insisting that the International Monetary Fund be included in the effort to rescue Greece. After 2011, she shut down Germany’s nuclear power plants, following the Fukushima disaster in Japan. Then, in 2015, she opened Germany’s borders to more than one million Syrian refugees. And now, she has agreed to a proposal for a joint €500 billion ($556 billion) recovery fund to help the European Union’s hardest-hit national economies through the COVID-19 crisis.Every one of these policy decisions has provoked howls of outrage in Germany, as well as hand-wringing by other Europeans who are reluctant to allow Germany an outsize leadership role. Den Rest des Beitrags lesen »

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Europe’s Non-Hamiltonian Muddle

Posted by hkarner - 2. Juni 2020

Brunello Rosa

Brunello Rosa, CEO and Head of Research at Rosa & Roubini Associates, is a visiting professor at Bocconi University.

Although any joint EU action should be welcomed, the current COVID-19 response plan hardly amounts to a radical break with business as usual. Far from a long-awaited embrace of debt mutualization, the newly proposed European recovery fund risks being both politically unpalatable and economically inadequate.

NEW YORK – This past week, the European Commission unveiled a plan to help European countries manage the Great Depression-scale shock from COVID-19. Building on a recent Franco-German proposal, the Commission is calling for a €750 billion ($834 billion) recovery fund (€500 billion of which would be distributed as grants, and €250 billion as loans).

The money issued through this so-called “Next Generation EU” plan will flow through European Union programs, in order to achieve the Commission’s goals, including its green and digital economy agenda. The Commission will raise funds in the market by issuing long-term bonds, and their efforts will be backed by a suggested increase in new taxes, such as those on greenhouse-gas emissions, digital services, and other areas of supranational commerce.Though we are among the few commentators who anticipated that the EU would offer a plan much larger than what most market participants and pundits expected, we also would advise European policymakers to remain realistic about what can be achieved at the moment. Den Rest des Beitrags lesen »

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The Limits of Extreme COVID Monetary Policy

Posted by hkarner - 31. Mai 2020

Paola Subacchi

Paola Subacchi, Professor of International Economics at the University of London’s Queen Mary Global Policy Institute, is the author, most recently, of The Cost of Free Money.

Just because the major central banks can continue to introduce increasingly unconventional measures doesn’t mean that they should. The current economic crisis demands primarily a fiscal-policy response, whereas extreme monetary policies carry high risks and produce adverse side effects.

LONDON – With output having collapsed as a result of the COVID-19 pandemic, many are wondering how far monetary policy can be stretched to support the economy. For the US Federal Reserve, negative interest rates appear to represent an effective limit, not because such a policy is technically unfeasible, but because it would be politically unacceptable. Yet for the European Central Bank, the Bank of England, and the Bank of Japan, there appears to be no limit.

The ECB has long since cut rates into negative territory, and BOE Governor Andrew Bailey is reportedly “looking very carefully” at that option for the United Kingdom. Likewise, BOJ Governor Haruhiko Kuroda, while deeming the BOJ’s current policy mix appropriate for current conditions, has not ruled out further monetary easing or another increase in asset purchases.The question is whether it makes sense to go further down the road of extreme monetary policy. Former ECB President Mario Draghi’s famous promise to do “whatever it takes” to support the euro has now become the mantra for all policymakers confronting the current crisis. But wouldn’t expanding fiscal policy be a better way to fulfill that commitment?

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We Are Hong Kong

Posted by hkarner - 31. Mai 2020

Chris Patten, the last British governor of Hong Kong and a former EU commissioner for external affairs, is Chancellor of the University of Oxford.

With his recent decision to impose a draconian new security law on Hong Kong, Chinese President Xi Jinping has ridden roughshod over the Joint Declaration and directly threatened the city’s freedom. Defenders of liberal democracy must not stand idly by.

LONDON – In my final speech as Hong Kong’s governor on June 30, 1997, a few hours before I left the city on Britain’s royal yacht, I remarked that, “Now, Hong Kong people are to run Hong Kong. That is the promise. And that is the unshakable destiny.

That promise was contained in the 1984 Joint Declaration, a treaty signed by China and the United Kingdom and lodged at the United Nations. The deal was clear, and the guarantee to Hong Kong’s citizens was absolute: the return of the city from British to Chinese sovereignty would be governed by the principle of “one country, two systems.” Hong Kong would have a high degree of autonomy for 50 years, until 2047, and would continue to enjoy all the freedoms associated with an open society under the rule of law.But with his recent decision to impose a draconian new security law on Hong Kong, Chinese President Xi Jinping has ridden roughshod over the Joint Declaration and directly threatened the city’s freedom. Den Rest des Beitrags lesen »

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What Should We Be Preparing For?

Posted by hkarner - 30. Mai 2020

Date: 29‑05‑2020

Source: Project Syndicate by Ricardo Hausmann

Ricardo Hausmann, a former minister of planning of Venezuela and former Chief Economist at the Inter‑American Development Bank, is a professor at Harvard’s John F. Kennedy School of Government and Director of the Harvard Growth Lab. 

In most emerging and developing countries, COVID‑19 is causing an economic hurricane. It looks increasingly like a Category 5, but the international community and many national governments prepared for a tropical storm.

CAMBRIDGE – Suppose you knew that a hurricane was coming, but meteorologists were uncertain if it would make landfall as a Category 2 or a Category 5 storm. Which scenario should you prepare for?

The problem you face reflects the costs of assuming that it is a Category 5 when it is only a Category 2 and vice versa. The latter scenario implies deaths and destruction that could have been avoided through evacuations, well‑supplied shelters, and precautionary shutdowns. The first scenario implies unnecessary preventive costs. In the case of hurricanes, we all agree that it makes sense to err on the side of caution for the same reason that it is better to be five minutes early when catching a train than five minutes late. Den Rest des Beitrags lesen »

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The Art of AI

Posted by hkarner - 30. Mai 2020

Date: 29‑05‑2020

Source: PROJECT SYNDICATE interviews KAI‑FU LEE

As the world enters a new decade, research and development into artificial intelligence and its many applications are barreling forward, and nowhere more so than in China. Although popular narratives tend to focus on the threats posed by AI, the truth is that many of the technology’s dangers have been overhyped, and its promises neglected.

A leading figure in the Chinese tech scene and in artificial‑intelligence development globally, Kai‑Fu Lee earned a PhD in computer science from Carnegie Mellon University in 1988 before serving in executive roles at Apple, SGI, Microsoft, and Google, where he was president of Google China. Now the chairman and CEO of Sinovation Ventures in Beijing, he is the author of AI Superpowers: China, Silicon Valley, and the New World Order. Here, he discusses the global AI race, the current state of the field, and what may – and should – come next.

Project Syndicate: As someone who long worked for US companies and now oversees a tech venture capital firm, you’re deeply familiar with the world’s two main settings for AI development and research. What are the trade‑offs of each R&D environment? What advantages does China offer over the US, and what must policymakers change or improve to achieve China’s goal of catching up to and surpassing the US? Den Rest des Beitrags lesen »

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The End of Europe’s Chinese Dream

Posted by hkarner - 28. Mai 2020

Date: 26‑05‑2020

Source: Project Syndicate by Mark Leonard

Mark Leonard is Director of the European Council on Foreign Relations. 

The COVID‑19 crisis has pushed Europeans‘ strategic thinking about China – already shifting because of three developments – past the tipping point. After years of pursuing closer bilateral economic ties, Europeans suddenly realize that they have become dangerously dependent on Chinese trade and investment.

BERLIN – A paradigm shift is taking place in relations between the European Union and China. The COVID‑19 crisis has triggered a new debate within Europe about the need for greater supply‑chain “diversification,” and thus for a managed disengagement from China. That will not be easy, and it won’t happen quickly. But, clearly, Europe has abandoned its previous ambition for a more closely integrated bilateral economic relationship with China.

In the past, when Europeans sought trade, economic‑, and foreign‑policy reforms vis‑à‑vis China, their hope was always to increase contact with the country while making the relationship fairer and more reciprocal. The basic goal was to expand bilateral trade and pry open the Chinese market for European investments. Even when the European Union toughened its approach toward China, its objective was still to deepen economic ties with the country. The creation of new EU instruments to screen investments and enforce antitrust measures were presented as regrettable but necessary measures to create the political conditions for closer cooperation. Den Rest des Beitrags lesen »

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One Giant Leap for Europe?

Posted by hkarner - 27. Mai 2020

Date: 27‑05‑2020

Source: Project Syndicate by Lucrezia Reichlin

Lucrezia Reichlin, a former director of research at the European Central Bank, is Professor of Economics at the London Business School. 

The Franco‑German proposal for a COVID‑19 recovery fund is not quite the “Hamiltonian moment” that some have claimed. But, by reshaping the debate on risk mutualization and the benefits of transfers, it could set the stage for one.

LONDON – The €500 billion ($547 billion) COVID‑19 recovery fund proposed by German Chancellor Angela Merkel and French President Emmanuel Macron has been hailed as a turning point for the European Union – and for good reason. Beyond its concrete economic implications, the proposal reaffirms a commitment to solidarity by the EU’s two largest economies, thereby setting the stage for genuine progress toward fiscal union.

The basic proposition is straightforward. The EU would borrow in the market at long maturities with an implicit guarantee from the common budget. It would then channel borrowed funds to regions and sectors hardest‑hit by the COVID‑19 crisis.

There is plenty left to be negotiated, such as where to offer loans versus grants, what kind of conditionality to apply to projects, and the extent to which aggregate fiscal capacity should be increased. Opposition from the so‑called Frugal Four – Austria, the Netherlands, Finland, and Sweden – will undoubtedly necessitate some compromise. Den Rest des Beitrags lesen »

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Learning the Lessons of the Pandemic

Posted by hkarner - 24. Mai 2020

Date: 22‑05‑2020

Source: Project Syndicate by Javier Solana

Javier Solana, a former EU High Representative for Foreign Affairs and Security Policy, Secretary‑General of NATO, and Foreign Minister of Spain, is currently President of the Esade Center for Global Economy and Geopolitics and Distinguished Fellow at the Brookings Institution. 

Many fear that the pandemic invites national withdrawal, but the world’s scientists are showing us a better way forward. They are not only putting their research at everyone’s disposal, but also modeling a cooperative way of working that enables them to produce more and better output.

MADRID – Among its many other effects, the COVID‑19 crisis has intensified the pre‑existing geopolitical rivalry between China and the United States. This tension has led many to warn of the “Thucydides trap,” a term coined by Harvard’s Graham T. Allison to refer to the heightened risk of conflict when an emerging power threatens to displace an established one. Allison’s theory takes its name from the ancient Greek historian Thucydides’ chronicle of the Peloponnesian War, in which Sparta defeated the rising city‑state of Athens.

One important detail of this historical touchstone has passed largely unnoticed, however, even amid the ongoing pandemic: the determining factor in Sparta’s victory was a plague that killed about one‑third of Athens’s population, including Pericles, the city’s leader.

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Why This Time Was Different

Posted by hkarner - 22. Mai 2020

Date: 21‑05‑2020

Source: Project Syndicate by Carl Bildt

Carl Bildt was Sweden’s foreign minister from 2006 to 2014 and Prime Minister from 1991 to 1994, when he negotiated Sweden’s EU accession. A renowned international diplomat, he served as EU Special Envoy to the Former Yugoslavia, High Representative for Bosnia and Herzegovina, UN Special Envoy to the Balkans, and Co‑Chairman of the Dayton Peace Conference. He is Co‑Chair of the European Council on Foreign Relations. 

In 2003, the world contained the SARS epidemic to Southeast Asia and ended the crisis by that July. Based on the limited information currently available, four factors help to explain the difference between then and now.

STOCKHOLM – How will the COVID‑19 mega‑crisis end? I don’t know, and nor does anyone else. So, perhaps it would be more productive to reflect on how it started. By addressing that issue, we might be able to improve our chances of averting another pandemic in the future. Den Rest des Beitrags lesen »

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