Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘UK’

The brains behind Corbynomics

Posted by hkarner - 12. Mai 2019

Date: 09-05-2019
Source: The Economist

A glut of new think-tanks show the left is at last coming up with new ideas—with help from an unlikely source

The exposed brick walls, the east London venue and the bathtub full of free beer brewed specially for the evening did not point to a think-tank launch. Yet this was how Common Wealth, a new outfit aimed at radically overhauling the ownership of British business, announced itself on April 25th. “All of the energy is on the left in politics at the moment,” cheered Ed Miliband, a former Labour Party leader who sits on its board, to a merry audience.

Common Wealth is only the latest think-tank to have sprung up to cater to the thirst for new ideas on the left. Autonomy, which examines the future of work, started life in mid-2017 and has churned out reports calling for a four-day week that have been hailed by John McDonnell, the shadow chancellor. Other research organisations examining foreign policy and the workings of government from a left-wing perspective are in the works. Democracy Collaborative, a progressive American think-tank, has muscled into the British market. Meanwhile, established outfits such as ippr, which provided the ideological backbone of Blairism, have swerved leftward and called for a comprehensive reshaping of the British economy. Den Rest des Beitrags lesen »

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The Small Band of Skeptics That Helped Snarl Brexit

Posted by hkarner - 12. April 2019

Date: 11-04-2019
Source: The Wall Street Journal

The European Research Group has no website, no office, and only around 15 lawmakers as full members, yet it wields outsize influence

LONDON—Hours after British Prime Minister Theresa May offered to quit to save her ill-starred Brexit deal late last month, dozens of pro-Brexit lawmakers gathered in the iconic Victorian building that contains both Houses of Parliament.

One spoke in Latin, quoting Tacitus on Britain’s valiant if unsuccessful effort to fight off invasion by the Romans. Another declared, near tears, “What is liberty if not to govern ourselves?”

Several lawmakers in the wood-paneled room insisted the U.K. should leave the European Union in days, without any deal, rather than accept the package Mrs. May negotiated with Brussels to smooth its exit. Den Rest des Beitrags lesen »

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The Tories are transforming into a party of populist nationalism

Posted by hkarner - 6. April 2019

Date: 04-04-2019
Source: The Economist: Bagehot

Theresa May’s decision to work with Labour will hasten the transition

A prime minister with a well-deserved reputation for dullness and dithering has finally done something dramatic and bold. This week she broke with the Brexit-right of her party and decided to put national interest above party unity. In a lengthy cabinet meeting on April 2nd Theresa May forged a radically new policy—working with the leader of the opposition Labour Party, Jeremy Corbyn, to produce a compromise Brexit and, if that doesn’t work, holding another round of indicative votes in the House of Commons and going with the winner.

Her move has left the hard Brexiteers in her party even more apoplectic than usual. Boris Johnson pronounced that “Brexit is now soft to the point of disintegration.” Jacob Rees-Mogg accused Mrs May of being keener to work with a Marxist than with her fellow Tories. Iain Duncan Smith opined that “the spectre of Corbyn lording it over us in a prime-ministerial way as he wrecks Brexit makes my blood run cold and fear for my party and my country.” So far a couple of junior ministers have resigned. Den Rest des Beitrags lesen »

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No Choice and No Exit for the UK

Posted by hkarner - 19. März 2019

Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999

The outcome of the simple binary choice given to UK voters in the June 2016 Brexit referendum has proved almost impossible to implement. The main obstacle is not the complications of negotiating new treaties, but rather the judgment by those in charge of Britain’s political life that the costs of an emphatic withdrawal are too great.

LONDON – The United Kingdom’s protracted attempt to leave the European Union has upended the two illusions by which the world has lived since the end of the Cold War: national sovereignty and economic integration, the twin end points of history, according to Francis Fukuyama’s celebrated 1989 essay.

Juridically, the world consists of 191 sovereign states, which freely enter into treaties, agreements, and associations to order their relations with one another. The UK is one of them. Its failure to make a meaningful exit from the EU would be the first time in modern history that a major sovereign state was forced to remain in a voluntary union because, while legally free to leave, doing so would be too costly. Den Rest des Beitrags lesen »

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Don’t Fear the Deep State. It’s the Shallow State That Will Destroy Us.

Posted by hkarner - 7. Februar 2019

Date: 06-02-2019
Source: Foreign Policy

Populists like to blame elites, but from Israel to Britain to the United States their crusade against hardworking civil servants is undermining the foundations of democracy.

Then-British Foreign Secretary Boris Johnson and U.S. President Donald Trump

“Indeed it has been said,” Winston Churchill told the House of Commons in November 1947, “that democracy is the worst form of government except for all those other forms that have been tried from time to time.” Churchill might not have paid democracy such high praise in today’s climate.

A wave of populism has swept over many quarters of the world. Disenfranchised publics, on both the right and left, who believe that they’ve been handed a rotten deal are asserting influence. Those who’ve missed out on the benefits of globalization seek to improve their economic prospects. Others are motivated to replace prevailing social norms with ones that better reflect their personal value systems. Their common enemy—to be blamed when high expectations are disappointed—is the reviled “deep state,” that amorphous cadre of public servants and gatekeepers who execute the nation’s business.

Nowhere is this more evident than in the United Kingdom, where Prime Minister Theresa May is contending with the fallout from Parliament’s rejection of her Brexit proposal. Taking to the airwaves just before the fateful Jan. 15 vote, which Her Majesty’s Government lost by a 432 to 202 majority, former Foreign Secretary Boris Johnson predicted a public backlash if Britain’s withdrawal from the European Union were to be impeded. “I think that people will feel betrayed,” Johnson warned ominously, “and I think they will feel there’s been a great conspiracy by the deep state of the U.K., the people who really run the country, to overturn the vote in the referendum.” Den Rest des Beitrags lesen »

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Die hohen Kosten eines Finanzzentrums

Posted by hkarner - 21. Oktober 2018

Howard Davies, the first chairman of the United Kingdom’s Financial Services Authority (1997-2003), is Chairman of the Royal Bank of Scotland. He was Director of the London School of Economics (2003-11) and served as Deputy Governor of the Bank of England and Director-General of the Confederation of British Industry.

LONDON – Während die Brexit-Verhandlungen Großbritanniens weiterholpern, nutzen andere europäische Länder die Zeit der Ungewissheit hinsichtlich der künftigen Finanzmarkt-Regulierung, um Firmen und Aktivitäten aus London in konkurrierende Finanzzentren zu locken. Die Franzosen unterstützen Paris besonders aktiv, aber Frankfurt liegt, trotz halbherziger Unterstützung der Regierung in Berlin, nicht weit zurück. Und auch andere Städte wie Luxemburg, Dublin und Amsterdam haben ihre roten Teppiche ausgerollt. So beliebt waren Banker schon seit einem Jahrzehnt oder noch länger nicht.  

Aber sollten andere Städte London nachahmen und zu einem globalen Finanzzentrum werden wollen? Ist man sich in diesen Städten bewusst, was gut für sie und ihre jeweiligen Volkswirtschaften ist?

Die weltweite Finanzkrise des Jahres 2008 hat zu einem Umdenken hinsichtlich der diesbezüglichen Vor- und Nachteile geführt. Definitiv von Vorteil ist ein bedeutendes Finanzzentrum im eigenen Land für Porsche-Händler, angesagte Champagner-Bars und Nachtclubs. Von mancher Seite wird allerdings argumentiert, dass die Nachteile im Hinblick auf die Auswirkungen auf die übrige Wirtschaft zu schwerwiegend sind, um sie außer Acht zu lassen.

Andy Haldane, Chefvolkswirt der Bank of England, bezeichnet zumindest Teile der Bankenbranche als „Schadstoffe“. Das „systemische Risiko”, so Haldane, „ist ein schädliches Abfallprodukt”, von dem „Gefahr für arglose Unbeteiligte in der Wirtschaft ausgeht.“  Einige Länder, darunter das Vereinigte Königreich, tragen weiterhin „die sozialen Kosten, die Bankenkrisen für die Allgemeinheit bringen.“ Den Rest des Beitrags lesen »

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Britain’s unemployment is ultra-low, but its wages are ultra-measly

Posted by hkarner - 9. September 2018

Date: 08-09-2018
Source: The Economist

Normally, low joblessness means high wages. No longer

BRITAIN is enjoying a jobs miracle. Its rate of unemployment is one of the
lowest in Europe. Before long, and possibly as soon as the next release of data on September 11th, it could fall below 4%, a level not breached since 1974. The ruling Conservative Party is rightly proud of its record on jobs. Yet the economy that has got so many people into work has proved incapable of generating pay rises. Real wages are lower than a decade ago. The government may crow about unemployment being at its lowest since the 1970s, but pay growth is at its weakest since the Napoleonic wars.

A few factors help to explain why Britain enjoys such little unemployment. The OECD, a club of mostly rich countries, says the country has the least-regulated labour market in Europe. Hiring and firing staff is easier than in countries such as France, where the hassle of getting rid of bad employees makes bosses think twice about taking someone on in the first place. (France’s unemployment rate is more than twice Britain’s.) Policy measures have made Britons more employable. Since the 1980s governments have more closely supervised jobseekers’ efforts, which some research has associated with lower long-term unemployment.

In the past, low unemployment went hand in hand with juicy pay rises. The fewer the number of people looking for work, the harder employers had to compete for staff. The inverse relationship between unemployment and wage growth is summed up by the Phillips curve, named after William Phillips, who first plotted it in 1958. Yet in recent years the relationship has become much weaker. Economists in many rich countries, including America and Germany, have noticed that low unemployment is not generating the high wage-growth that might be expected. Britain’s ultra-low rate of joblessness, coupled with particularly weedy wages, makes it perhaps the biggest Phillips-buster of all.

As Britain’s unemployment rate has fallen, economists have been stumped time and again by the failure of pay to respond. In 2013 calculations from the Bank of England suggested that 6.5% was as low as unemployment could go without wages beginning to push inflation above its target rate. Within a few months that estimate had edged down to 5.5%. Then 5% or so. Now that rate is thought to be just over 4%.

Yet even as unemployment heads below that level, there is little sign of pay pressure. If the relationship seen during the 2000s held today, workers would be enjoying nominal wage rises of some 5% a year (see chart 1). Instead, the most recent official reading shows annual nominal wage growth of just 2.7% in June. Data from Adzuna, a job-search website, show that advertised salaries fell from June to July. The upshot is that wages have done worse in Britain lately than almost anywhere in the rich world (see chart 2). To explain this unusually poor performance, consider three factors.

First, productivity. In the long run, changes in real wages depend on how much workers produce per hour. Since the financial crisis, productivity growth has stagnated. Low government and business investment may be in part to blame. Britain’s manufacturing industry uses fewer robots per worker than Slovakia’s. Moreover, in recent years Britain has seen the rapid growth of low-productivity jobs in industries such as hospitality. The number of hairdressers has risen by 50% since 2010. The growth of such jobs has dragged down average productivity. Our analysis suggests that the changing composition of jobs in the British labour market has pushed down the average real wage by more than 2%.

Yet productivity is not the whole story. Pay per person has deviated further from its pre-crisis trend than productivity growth. In the past year output per hour has at last picked up, but wages have not. This points to a second reason for Britain’s weak wage-growth: workers’ diminished bargaining power.

The decline of unionisation is commonly blamed for this. In the 1960s, when unions were mightier, the share of GDP accruing to workers was far higher. But the kneecapping of the unions in the 1980s predates the recent stagnation in pay. Perhaps a more important reason is the government’s cap on public-sector pay rises. Since 2011 salaries for most public employees have increased by no more than 1% a year in nominal terms (though in recent months the cap has been raised). The pay premium typically enjoyed by public-sector workers has diminished. This also affects the private sector. If bosses are less fearful of losing workers to the state, they will be less inclined to offer pay rises.

Changes to welfare policy from 2010, including tougher rules on who gets benefits, and declines in their value, have also played a role. Cross-country analysis of welfare policy is scanty, but it suggests that the reforms in Britain have been especially hard-nosed. As losing a job becomes a scarier prospect, workers may not bargain so hard for better pay.

In trying to puzzle out the breakdown of the relationship between unemployment and pay observed by Phillips, economists are increasingly asking themselves whether the labour market is really as tight as the headline unemployment rate suggests. Few Britons are out of work altogether, but 8% say they would like to work more hours than they do, a higher share than before the financial crisis. A delivery driver, for instance, might want more errands than he is offered. Such workers may be more concerned about securing extra hours than demanding higher pay.

All this means that the labour market may need to tighten even more before wage growth improves substantially. Yet with inflation above the official 2% target, the Bank of England’s monetary-policy committee has lately taken a hawkish turn, raising interest rates in an effort to dampen the spending and investment that would raise demand for labour. Meanwhile, with Brexit six months away, the outlook for economic growth is poor. It may be some time before Britain’s miraculous unemployment figures are matched by equally impressive wage growth.

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Populism Bites Back

Posted by hkarner - 27. April 2018

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

Political posturing is often expedient. But British Prime Minister Theresa May’s government is now being reminded daily of the far-reaching consequences of staking out positions that lack any meaningful regard for the future.

LONDON – This spring, British Prime Minister Theresa May’s Conservative government is being reminded of just how powerful – and long-lasting – the unintended consequences of policies can be. Two problems concerning the United Kingdom’s borders – one relating to immigration, the other linked to the frontier with the Republic of Ireland – have lately erupted. While they have not yet weakened support for the government, they probably will. And they are almost certain to diminish what is left of Britain’s soft power.

The immigration problem goes back some seven decades, to the arrival of the first waves of Caribbean immigrants in the UK. They had been invited by the government in the wake of World War II to help offset a labor shortage, taking hard-to-fill jobs in the National Health Service (NHS) and other sectors. Den Rest des Beitrags lesen »

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No Hope: The Nation States are Killing the EU

Posted by hkarner - 16. März 2018

Date: 15-03-2018
Source: The Wall Street Journal By Simon Nixon
Subject: The Dark Underbelly of Europe’s Financial System

The EU has rules to guard against money laundering, but members must ensure the law is enforced

The EU has introduced a single rule book to cover customer protection and anti-money laundering, but it is up to domestic agencies to ensure the law is enforced

Something is rotten in the European financial system.

The U.K.’s status as a global capital of money laundering is once again back in the spotlight following the attempted murder of former Russian spy Sergei Skripal and his daughter, which the British government has blamed on Russia. The scandal has revived concerns about the U.K.’s remarkable openness to the mysteriously amassed fortunes of Russian oligarchs with links to Russian President Vladimir Putin and the extraordinary role that U.K.-registered companies have played in some of the biggest money-laundering scandals that have surfaced in Europe in recent years.

But the current focus on London follows a string of disturbing stories that has exposed the dark underbelly of the financial system across the continent. Den Rest des Beitrags lesen »

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Milking it: bosses’ pay

Posted by hkarner - 5. Januar 2018

Date: 04-01-2018
Source: The Economist
Today has been dubbed “Fat Cat Thursday”, at least by those critical of the bumper salaries Britain’s business chiefs enjoy. According to the High Pay Centre, a think-tank, this is the date by which bosses at FTSE 100 companies will have already earned more in the new year than the typical full-time worker can expect in the entirety of 2018.

The HPC calculates that the executives’ median pay was £3.45m ($4.66m) in 2016 (the latest available data); that of an average worker in 2017 just £28,758. Fat Cat day has caught a populist mood in austere times.

Scandals at businesses like BHS, a retailer whose boss pocketed millions in 2016 while its pension pot dwindled, have not helped. Under public pressure, in that year corporate pay actually fell. Politicians have responded too. Theresa May’s government is expected soon to force listed companies to publish the ratios between the highest and lowest earners. Expect the fattest cats to diet.

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