Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘WSJ’

Migrant Crisis Pulls at European Unity

Posted by hkarner - 22. September 2015

Date: 21-09-2015
Source: The Wall Street Journal By SIMON NIXON

Harsh words over border policy erodes trust between member states

The European project is in deep trouble. It was already in trouble following the Greek debt crisis and facing major challenges in the shape of the planned British referendum on European Union membership and the need to strengthen the way the eurozone works.

But the migration crisis has eclipsed all these concerns: the trust between member states that is vital to underpin the decades-old process of deeper European integration is evaporating. Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , , | Leave a Comment »

Shock-Resistant Eurozone Appears Far Off

Posted by hkarner - 20. September 2015

Date: 19-09-2015
Source: The Wall Street Journal

With disparate proposals to cut risk in the currency union, Europe’s finance chiefs have raised a high bar to progress

After ignoring the question of how to make the eurozone more shock-resistant for the better part of a year, the currency union’s finance chiefs seem to have found a new way of avoiding progress: pushing so many different ideas at once that gridlock is unavoidable.

First out the gate was French Economy Minister Emmanuel Macron, who wants the eurozone to set up an economic government, with its own budget and parliament, as well as a finance minister to distribute investments and steer labor-market policies. “The status quo will lead to self-destruction,” Mr. Macron warned in a recent interview with German daily Süddeutsche Zeitung.

A few days later, Jeroen Dijsselbloem, the Dutch finance minister who also presides over the meetings of his eurozone colleagues, suggested that what the currency union needs is more “convergence,” or streamlining, of national economic policies—but no new institutions to enforce, incentivize or legitimize them. If governments want their citizens’ support for the euro, they have to ensure it leads to prosperity and prevent one country’s bad tax rules from creating problems for its neighbors, said Mr. Dijsselbloem.

Next up was Jean-Claude Juncker, the president of the European Commission, who in his “State of the European Union” speech promised to present proposals for a European deposit-guarantee system in the coming year and, further down the line, a European treasury.

Many economists see a common system for insuring deposits as a logical—and necessary—part of the eurozone’s “banking union,” complementing the centralized supervisor and the resolution authority that were created to prevent failing banks from bankrupting their governments. In other words, once a broken lender has been identified and the cost of resolving it has been shared among its shareholders and creditors, what is needed is a big pot of money to compensate savers with less than EUR100,000 in their accounts.

The commission proposal is likely to be less ambitious. Instead of having one fund for all 19 euro countries, the proposed system is expected to supplement national funds running low on their own resources with credit lines from their eurozone counterparts.

Even this scaled-down reinsurance system is too much for Germany, the leading opponent of mutualizing risks in the currency union. Yet, rather than ruling it out from the get-go, Finance Minister Wolfgang Schäuble is pursuing a new strategy.

“One has to be careful not to put the cart before the horse,” he told reporters after discussing the issue with his eurozone colleagues on Saturday.

Before teaming up to protect savers, Mr. Schäuble argued, the bloc has to take a host of other steps. Among them are obvious ones—such as requiring all countries to actually implement the agreed rules on imposing losses on bank investors—but also some that are clearly designed to delay progress. These include requirements for banks to build up capital buffers for government bonds and a system to restructure excessive government debts. (Finland, a traditional ally of Germany, has already convened its own expert group to look at how best to restructure sovereign bonds).

Even a eurozone finance minister isn’t unthinkable, Mr. Schäuble said, but before going there, the decision on whether national budgets are in line with EU rules should be taken out of the hands of the European Commission. Instead of the EU executive, which he said is less strict with large countries such as Germany or France, an independent “fiscal board” should be given the power to strike down national spending plans.

With this wish list Mr. Schäuble pulled a classic divide-and-rule move. Obvious supporters for a common deposit-insurance system and a centralized budget such as Italy or Portugal are bound to block any initiatives that would make their own large debts seem less safe. The European Central Bank, which favors a strong banking union, meanwhile, doesn’t want to get rid of the zero-risk labeling for government bonds in the eurozone unless others around the globe do the same for their own debts.

There are some ways to unblock the logjam. Rather than immediately force banks to hold significant capital on their holdings of government bonds, European regulators could set limits for how many bonds from one country a bank can hold, suggests Christian Odendahl, chief economist at the London-based Centre for European reform. That, he says, could help overcome German resistance to a limited deposit reinsurance system.

But officials involved in the discussions among ministers aren’t overly optimistic. “There’s no pressure,” says one of them. With policy makers’ attention focused on dealing with the refugee crisis and no imminent threat to the eurozone, progress on reinforcing Europe’s monetary union is bound to be slow.

“Improving EMU can only happen if we move in parallel on all fronts,” Benoît Cœuré, the French member of the ECB’s executive board, said after ministers’ deliberations last week.

Posted in Artikel | Getaggt mit: , , | Leave a Comment »

Central Banks’ Lesson: Easy Money Alone Isn’t a Growth Salve

Posted by hkarner - 19. September 2015

Date: 18-09-2015
Source: The Wall Street Journal

Global economy continues slow expansion as governments stalled on policy overhauls

Serial disappointmentsCentral bankers have injected roughly $8 trillion into the global economy since the financial crisis. In return, the world has remained in a low-growth rut.

The Federal Reserve cited market turmoil and a weak economic picture overseas in deciding Thursday not to back off from one of the most aggressive global monetary policies in decades. Whenever the Fed moves to raise interest rates, one lesson remains: Cheap money alone can’t solve the world’s economic ills.

The Fed noted positive developments at home, including increased household spending and business investment, but worried conditions overseas could restrain U.S. growth and put further downward pressure on near-term inflation.

“A lot of our focus has been on risks around China, but not just China—emerging markets more generally and how they may spill over to the U.S.,” said Fed Chairwoman Janet Yellen, noting “the significant economic and financial interconnections between the U.S. and the rest of the world.”

Her unease underscores in part the limits of loose monetary policy as a singular response to economic weakness. Instead of using the breathing room of low interest rates to revamp their economies, governments around the globe have failed to enact longer-lasting policy overhauls as they try to combat an array of demographic and other challenges.

“Finance, especially as motivated by central banks, is really only a lubricant to growth,” said Raghuram Rajan, head of the Reserve Bank of India, at a recent meeting of top global finance officials. “It can’t be the underlying driver of growth.”

Since the financial crisis began in 2007, the average key interest rate set by central banks has fallen by around 4 percentage points in advanced countries and 2 points in emerging markets. Central banks have also bought bonds and other assets equal to 10% of global output to stir growth in the postcrisis era.

Yet global growth has persistently fallen short of expectations. In April 2010, the International Monetary Fund projected the world economy would grow 4.5% per year from 2011 through 2014. In fact, it grew just 3.6% per year. The fund now projects growth of 3.3% this year, revised down from 3.8% a year ago. Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , , , , , | Leave a Comment »

How China Boosts Its Tech Startups

Posted by hkarner - 18. September 2015

Date: 17-09-2015
Source: The Wall Street Journal

Beijing’s efforts seek to create employment opportunities, sense of social mobility

Each week, China Circuit will explore the issues, trends and people driving technology and innovation in China and across Asia.

Six years ago, when Ye Zhewei told his parents that after graduating from a top university he wanted to join a startup under a newly founded incubator in Beijing, they weren’t happy. They didn’t know what a tech startup was, let alone an incubator. They approved his job choice only after seeing the founder of the incubator, Kai-fu Lee, on a state-television news program.

At the time, the most sought-after jobs for young graduates were in civil service, state-owned enterprises and big tech companies such as IBM, Tencent and Alibaba. Startups had no clear future, and the pay was poor.

Now, much like in the U.S., tech startups are about the coolest places to work for ambitious young Chinese. And they have an unlikely advocate: the Chinese government.
Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , , , | Leave a Comment »

Stocking Up on Europe’s Recovery

Posted by hkarner - 15. September 2015

Date: 15-09-2015
Source: The Wall Street Journal

A continuing European recovery plus cheaper stocks look like a good combination for investors

DraghiECB President Mario Draghi. Accommodative ECB policy is supporting European growth.

European stocks swung from hero to zero in August, with the Stoxx Europe 600 at one point erasing all its gains for 2015. That looks at odds with the continuing recovery in Europe’s economies.

Even now, the Stoxx Europe 600 is up only 3.5% for the year; it is down some 14% from its April peak. Yet the eurozone economy has so far put in a relatively robust showing—at least on its own terms. Revised data from Eurostat show growth has been modestly stronger this year than previously reported, meaning hard data have moved closer in line with more buoyant survey numbers. Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , , | Leave a Comment »

Migrants Offer Hope for Aging German Workforce

Posted by hkarner - 12. September 2015

Date: 11-09-2015
Source: The Wall Street Journal

Berlin must manage integration, welfare for newcomers, who could revive labor market

The wave of migrants now streaming into Germany could be exactly what Europe’s largest economy needs to rejuvenate its graying workforce. Or it could become a burden on the nation’s generous welfare system.

How those two forces balance out is likely to depend largely on how quickly the country can integrate newcomers into its booming economy.

Germany’s population is shrinking and aging at one of the fastest rates in Western Europe, with ominous consequences for pensions, health care and future economic growth.

By some estimates, Britain is on course to eclipse Germany as Europe’s biggest economy by 2030, thanks in part to its large numbers of young, energetic immigrants. Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , | Leave a Comment »

Obscure German Tweet Helped Spur Migrant March From Hungary

Posted by hkarner - 11. September 2015

Date: 11-09-2015
Source: The Wall Street Journal

Spread by media and word-of-mouth, tweet that Germany’s doors were open emboldened hundreds of refugees

On Tuesday, Aug. 25, at 1:30 p.m., a government agency in the southern German city of Nuremberg posted a sentence on Twitter that would change the lives of tens of thousands of desperate people.

“We are at present largely no longer enforcing Dublin procedures for Syrian citizens,” said the note, posted on the account of the Federal Office for Migration and Refugees.

The bureaucratic tweet was the first confirmation of an online rumor that had begun to spread a day earlier: With more Syrian refugees arriving via Hungary and other European Union member states, Germany was using its prerogative to stop enforcing the bloc’s asylum rules that require all migrants to be processed in the first EU country they enter. Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , | Leave a Comment »

Migration and Euro Pose Similar Challenges for Europe

Posted by hkarner - 11. September 2015

Date: 11-09-2015
Source: The Wall Street Journal By STEPHEN FIDLER

Common currency and Schengen zone, both central to European Union’s success, prove to be equally difficult to master in crisis

Migrants and refugees wait for a bus in Nickelsdorf, Austria, at the border between Hungary and Austria, on Thursday.

Europe’s common currency and the Schengen passport-free zone are the European Union’s most ambitious undertakings. Not coincidentally, they are also the two European projects that have most called into question the future of the bloc.

Together, they have probably made the most difference to the lives of ordinary people, allowing them to travel across much of Europe without having to change money or deal with border controls. For national governments to have freely abandoned such critical components of sovereignty as their currencies and control over their frontiers is remarkable.

But both initiatives were launched without the means to manage them effectively or quickly when they came under stress. In dealing with large-scale immigration as with the euro crisis, Europe suffers from being a halfway house. Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , , , , | Leave a Comment »

Inside the Fight Over Productivity and Wages

Posted by hkarner - 9. September 2015

Date: 09-09-2015
Source: The Wall Street Journal

If wages did closely track productivity gains worker by worker, we would be seeing some much wealthier car-assembly-line workers walking around, since manufacturing productivity has risen by 4.6% annually since 1973.

Disconnect productivity and compensationIn case you missed it, there’s a chart making the rounds that has come to represent, for some, all that is wrong with the American economy.

The top line shows worker productivity growing by 72.2%, or 1.33% per year, between 1973 and 2014. The bottom line shows median workers’ hourly compensation increasing by 9.2%, or 0.2% annually, over that same period. The gap between them more or less symbolizes the big empty space in workers’ wallets.

The chart, part of a broader research series from the left-leaning Economic Policy Institute, has struck a chord. Hillary Clinton tweeted a version of it following her first major economic policy speech in July, and has clearly leaned on EPI research in calling for policies that boost wages.

But the chart—and its data, methodology and conclusions—has become a flashpoint.

How one interprets the mass of historical data we have on workers’ productivity, wages and growth has profound consequences for which economic policies one might pursue. Most economists agree that productivity is essential for raising living standards, and that the superrich have seen their incomes skyrocket. The devil is in the details.

The economists behind the chart have now come out with guns blazing, releasing a vigorous defense of their work that decries critics’ attacks as “baseless.” The briefing paper by Josh Bivens and Lawrence Mishel, “Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay,” calls wage stagnation for the majority of American workers “a bald fact.” Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , , , , , | Leave a Comment »

Restrictions on Airborne Shipments of Lithium Batteries Gain Support

Posted by hkarner - 8. September 2015

Date: 07-09-2015
Source: The Wall Street Journal

Even battery trade group acknowledges risks, as recent tests reveal

Lithium Batteries plane crashSmoke rises from the scene of a plane crash in Dubai Sept. 3, 2010 in which a United Parcel Service 747 cargo plane went down shortly after takeoff, killing two  crew members. The fire appeared to have started in lithium batteries aboard the plane.

Transporting lithium batteries in the bellies of commercial jets is more hazardous than previously recognized, with federal tests revealing that just a handful of burning power cells can overwhelm typical onboard cargo safety and fire-suppression systems.

Results from recent Federal Aviation Administration laboratory testing, combined with the latest risk-reduction proposals from battery makers, highlight a shift in the debate over bulk shipments of highly flammable lithium batteries. International regulators and aviation industry officials increasingly worry about the dangers, and they are developing far-reaching packaging restrictions for airborne carriage of the ubiquitous power sources.

The deliberations aren’t focused on lithium batteries carried by passengers into airline cabins to power cellphones, tablets and other portable consumer electronics. Den Rest des Beitrags lesen »

Posted in Artikel | Getaggt mit: , | Leave a Comment »


Erhalte jeden neuen Beitrag in deinen Posteingang.

Schließe dich 441 Followern an