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Interndevalvering (Ådals-metoden)Related: Stabiliserinspolitik - Europakten 2011 - Finanskrisen - Eurokrisen FT In depth Austerity Europe Euron är ett fullskaleexperiment för att se om Hoover och Brüning och Bildt hade rätt, They never told us we could do that,” said Sidney Webb, a bruised former minister, when Prime Minister Ramsay MacDonald took Britain off the gold standard in 1931.
In September 1931, as part of its attempts to deal with the Great Depression, the new National Government launched cuts to public spending. 10% pay cut for officers and senior ratings. Those ratings below Petty Officer who had joined before 1925 would also have their pay reduced to the new rate; this amounted to a cut of 25% For two days, ships of the Royal Navy at Invergordon were in open mutiny, in one of the few military strikes in British history. The Invergordon Mutiny caused a panic on the London Stock Exchange and a run on the pound, bringing Britain's economic troubles to a head Part of the adjustment mechanism built into the currency union is the pro-cyclical impact of monetary policy: The mechanism of adjustment in the eurozone is therefore essentially that of the 19th-century gold standard. Italy - the eurozone’s third-largest economy - is weak and Within the monetary union, Italy cannot address this competitiveness issue through devaluation. In reality, the level of unemployment that would be required to restore competitiveness might well be unthinkable. Italy illustrates the way to liberal democracy’s demise If liberal democracy fails to deliver economic prosperity for a sufficiently large portion of the population over long periods, it ends — along with the financial and economic institutions it has created. The ECB has soaked up €300bn of Italian debt
The terrible price of austerity A Greek tragedy: how much can one nation take? The North still refuses to accept that the crisis was caused by destabilising capital flows, Nobel economist Joe Stiglitz said this strategy had led to a contractionary bias for the eurozone as a whole and was ultimately unworkable Martin Schulz, the European Parliament's president, said it was När det gäller den period med krympande BNP som inleddes 2012 är experterna i stort sett eniga: IMF and EU policymakers take Greece bailout spat online Tensions between the International Monetary Fund and eurozone policymakers over a Greek bailout erupted into a full online showdown on Thursday, Greece cannot be condemned to austerity for ever Put simply, the euro was flawed at birth.
Ambrose knows how to turn a phrase. In 2013 economists at the IMF rendered their verdict on these austerity programmes: Keynes supposed there was a “multiplier effect” from changes in investment spending.
Keynes’s reasoning was affirmed by the economic impact of increased government expenditure during the second world war. /Se also ”Det som satte stopp för trettiotalsdepressionen i USA var ett massivt underskottfinansierat program för offentliga arbeten som kallas andra världskriget”. In an article published in 1979 and entitled “After Keynesian Economics”, Robert Lucas and Tom Sargent, both eventual Nobel-prize winners,
wrote that the flaws in Keynesian economic models were “fatal”. John Cochrane of the University of Chicago said of Keynesian ideas in 2009: Full text of excellent article, even by The Economist standard The Myth of Austerity and Growth The principles of Keynesian fiscal policy -- which have slowly been coming back into vogue -- say that tightening spending is the worst thing you can do in the middle of a recession. More generally, it isn’t clear just how austerity is supposed to work its positive magic. The main claim seems to be the rather vague idea that lower budget deficits increase business confidence. Blanchard has shifted his stance. In a 2013 paper with Daniel Leigh, he showed that the IMF had been consistently wrong in its forecasts of the effects of austerity. The more beneficial the IMF predicted that austerity would be, the more incorrect its predictions were! In 2010, the IMF admitted that its demands exacerbated the pain of South Korea’s financial crisis in the 1990s.
Down and out in Helsinki A General Theory of Austerity Christine Lagarde letter to Eurozone finance ministers demands: The good news is that the recovery continues; we have growth; we are not in a crisis. Structural reform is like exercise: nearly everyone could use a bit more of it. The extent to which economies stuck in a mire of low growth and low inflation should focus on structural reform, In its latest “World Economic Outlook”, the International Monetary Fund devotes a chapter to the debate .By adopting structural reforms at the same time as slashing spending, Finland Det finska eländet är gåtfullt. The euro was doomed from the start Rather than call upon the combined authority of Euro governance to manage a deep Euro Area-wide sovereign debt workout, An amazing mea culpa from the IMF’s chief economist Fundamental misalignments that have made life so unbearable for many Europeans. U.K.'s Chancellor Osborne: The nickname for the IMF in the markets is “It’s mostly fiscal” SPIEGEL: Mr. Varoufakis, you have referred to the European Union's bailout policy for Greece as "fiscal waterboarding." What exactly do you mean by that?
Weimar and Greece Weimar, it’s never about the deflationary effects of the gold standard and austerity in 1930-32, Euron är vår tids guldmyntfot i Europa, What is needed is not structural reform within Greece and Spain so much as structural reform of the eurozone’s design Austerity had failed repeatedly, from its early use under US President Herbert Hoover, which turned the stock-market crash into the Great Depression,
Does anyone in their right mind think that any country would willingly put itself through what Greece has gone through, just to get a free ride from its creditors?
Austerity – the policy of saving your way out of a demand shortfall – simply does not work. In a shrinking economy, a country’s debt-to-GDP ratio rises rather than falls, and Europe’s recession-ridden crisis countries have now saved themselves into a depression, resulting in mass unemployment, alarming levels of poverty, and scant hope. It does not take a prophet to predict that the latest chapter of the euro crisis will leave Germany’s austerity policy in tatters – unless Merkel really wants to take the enormous risk of letting the euro fail. Det är Greklands konstnadsläge/växelkurs, Stupid Levelling out competitiveness in the euro area will be costly Draghi only had to say "whatever it takes" to end Europe's financial crisis. Radical left is right about Europe’s debt
Peter Wolodarski @pwolodarski
Draghi’s recent speech at the annual gathering of central bankers in Jackson Hole has excited great interest, Structural reform is certainly needed in some countries to increase long-term growth potential; but the impact of structural reform on short-term growth is often negative. Simultaneous public and private deleveraging is bound to depress demand and growth. That is why eurozone fiscal austerity has become self-defeating. The more aggressively the Italian government, for example, cuts expenditure or increases taxation, the more its public-debt burden – already above 130% of GDP – will likely grow to unsustainable levels.
Without higher aggregate demand, he argued, structural reform could be ineffective; and higher demand requires fiscal stimulus alongside expansionary monetary policy. Without a greater role for fiscal policy, the eurozone will face either continued slow growth or an eventual breakup. Ms Merkel does not say “no” to eurozone bonds. Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken. The inevitability of instability Helicopters can be dangerous Yesterday, president François Hollande had to ask his prime minister, Manuel Valls, to form a new government Italy’s Downward Spiral UK "Battle raging between the world’s leading macroeconomists"
Europe’s Debt Wish In October and November, the ECB will announce the results of its bank stress tests.
I never thought I would live to see a serving European Commissioner suggest that it was "reckless" to launch the euro without a lender-of-last resort or fiscal union to back it up.
France Deflation - A nightmare for the debt-stricken states of southern Europe, still trapped in a slump with mass unemployment Euro Area — “Deflation” Versus “Lowflation” George Soros says EU may not survive crisis In his book, The Tragedy of the European Union, published in the UK on Tuesday, Mr Soros also writes that he believes the banking sector is a "parasite" holding back the economic recovery and that little has been done to resolve the issues behind the 2008 crisis. Tragedy of the European Union: Disintegration or Revival?: How Europe Must Now Choose Between Economic and Political Revival or Disintegration, at Amazon Optimists have a touching faith in the German locomotive that is supposed to pull the eurozone out of the swamp, but the latest data shows that ,,, German wages fell 0.2pc in 2013. Germany too is in wage deflation.
"It's hard to imagine that if growth remains as weak as it is, and the periphery is kept in permanent recession,
that things won't eventually blow up in Europe," says Rogoff, echoing a view widely shared by many economists.
Professor Lars Calmfors skriver i en kolumn i DN idag 21/1-14 om hur eurokrisen borde kunna lösas. Rubriken är:
If France goes to the trouble of aligning with Germany on German terms, expect no mercy for others. The euro zone needs a history lesson In Münchau’s words, “If you look at this with a knowledge of economic history, this is an awe-inspiring set of choices, to put it mildly.” He’s right. If such an adjustment mechanism was suitable to any period, it was the decades before World War I. Relatively flexible wages and prices meant that deflation was more feasible than it would become subsequently, and involved fewer unemployment costs. The limited franchise /rösträtten/ meant that any unemployment that did result would incur lower political costs than would subsequently be the case. An adjustment strategy based on the expectation that already over-indebted countries will pay back what they owe in an environment of falling prices seems doomed to failure; all the more so if “internal devaluation” at the level of individual member-states is replaced by euro-zone-wide deflation. And interwar deflation ultimately had terrible political consequences, as well as economic ones. What euro crisis watchers should look for in 2014 In 2010, most of the world’s wealthy nations, although still deeply depressed in the wake of the financial crisis,
Peter Praet, the chief economist of the European Central Bank, a PRE, a Perfectly Reasonable Economist His underlying framework for thinking about European problems seems essentially indistinguishable from mine.
And you do have to wonder what calculation leads to the notion that a target of “close to but less than 2%” is appropriate, as opposed to, say, 3 or 4 percent. Whatever Praet may privately think, he and his boss have to deal with Europe’s Very Serious People — people who believe in austerity regardless of circumstances, The sad and remarkable thing that we’ve learned over the past year or so is how little intellectual debate matters. On both fiscal austerity and monetary policy, the PREs have completely blow the VSPs out of the water..
Peter Praet gave an important speech on disinflation risks and the ECB’s reaction function (see also his slides) Paul KrugmanThe question is, if it might not be better to dissolve the European Union in an orderly fashion instead of continuing the German led calamity.
Yves Daccord, Director General of the International Committee of the Red Cross, gave an important warning earlier this year: “Europe has a long record of maintaining a plausible trust in the future of its young people, even during turmoil. Not anymore. With prices rising and rampant unemployment, young urban people no longer see any future for themselves, and governments start losing credibility and legitimacy.” This cannot be the brave new world envisioned by the founders of the EU. In May of next year there will be an election for the EU parliament. What many in the United States with its political history of two main parties do not understand is that in Europe many people do not vote for political parties, but against them.
The question is, if it might not be better to dissolve the European Union in an orderly fashion instead of continuing the German led calamity. One saw what became of Germany’s last attempt to create a new European order seventy-five years ago.
Can fiscal austerity be expansionary in present Europe?
The lessons from Sweden Lennart Erixon, Department of Economics, Stockholm University, September 4, 2013 The main conclusion in this article is that the fiscal austerity measures in the mid-1990s delayed the Swedish economic recovery and that neither these measures nor the fiscal rules were responsible for the impressive Swedish macroeconomic performance in the following period. The positive economic development in Sweden was driven by export, profit and technology, reflecting an international upswing and the country’s flexible exchange rates and industrial composition. Full text Johannes Lindvall: Ett land som alla andra. Från full sysselsättning till massarbetslöshet
Erixon, Lennart Titel: Styrfel -- inte systemfel -- orsak till Sveriges eftersläpning?, Ekonomisk Debatt nr 1:1991
Besk medicin behövs - och kanske kan en dos EMU tillhandahålla den kuren. För det första kan vi inte på förhand veta hur utdragen och smärtsam den nödvändiga anpassningen blir.
Ett annat problem är att det demokratiska systemet kanske inte är berett svälja en så besk medicin. Sammanfattningsvis är jag ganska pessimistisk när det gäller EMU:s chanser att bära sig om den gemensamma valutan införs som planerat den 1 januari 1999.
Två tidigare försök att få till
stånd ett intimare monetärt samarbete mellan Europas stater Varken Greklands finanser eller ens euron är värda FORES presenterar en antologi där några av Sveriges kunnigaste ekonomer beskriver bakgrunden till krisen
Lars Calmfors: "Överlever euron?" Bokpresentation 14/11, Youtube Spanien får beröm för att ha lyckats sina kostnader och för att ha vänt ett underskott i bytesbalansen på 10 procent till ett litet överskott.
Frankrike är det stora sorgebarnet och får betyget ”klart underkänt”. ”I den djupaste recessionen sedan andra världskriget är det rimligt att kostnaderna sjunker, inte minst när arbetslösheten har ökat till 11 procent. Men i ett sönderreglerat Frankrike sker det motsatta. Under de senaste fem åren har enhetsarbetskostnaderna, det vill säga den faktiska kostnaden för att producera i landet, stigit med 15 procent, vilket är häpnadsväckande eftersom konkurrenskraften urholkas ytterligare”, skriver Henrik Mitelman. Full textMan häpnar.
However much money and power the Commission have,
it is improbable that they will be able to have any significant impact on
the competitiveness imbalance problem which a single currency will pose.
This will leave the problem to nature's remedy - the migration of population. It seems hard to believe that the political, economic and social success of Europe, whether one approves or disapproves the objecfive, will be promoted by establishing at the heart of its economic fundioring a mecharism which depends for equilibrium on the enforced migration, on pain of destitution, of its population in the tens of millions: If this is the character of monetary urion, conceived by politicians who saw it as little more than a trite gesture of nationhood, to go with a blue flag and a jolly anthem, then we can say that it is not in the long-term interests of Europe and very far from being a sensible economic sacrifice even for the sake of a large political goal. Indeed, one may wonder that anyone who professes to hope for the success of political union in Europe could wish to implant in its foundations such an engine of mass destruction. Loans and guarantees do not make the unsustainable sustainable. Samuel Brittan, Financial Times, August 8, 2013 "Growth-friendly process of consolidation" Psychological Roots of Austerity – Europa är i djupa och fundamentala problem, som måste läsas med att samhällsmodellen i Sydeuropa görs om,
naked capitalism: Is the Eurozone Nearing a Make or Break Point? This apparently reflects the German recognition as a result of the Italian elections that they will not be able to surmount domestic opposition in Italy and potentially other periphery countries and would rather pull the plug than continue funding their trade partners. He said there was a fair bit of discussion of Germany leaving the Eurozone after the election. I quizzed him on how they thought they could do that, since the new DM would presumably trade at a big premium to the Euro. My source finally said widespread recognition of the existential impasse at most a couple of months away. He’s never this definitive. Read more at http://www.nakedcapitalism.com/2013/03/is-the-eurozone-nearing-a-make-or-break-point.html#AHEVj9WwYMUDi0pJ.99 Naked Capitalism is a blog published by Susan Webber, the principal of Aurora Advisors, Inc., a management consulting firm.
The turmoil produced by the Italian elections has directed attention back to where it should have been all along – to the politics of the eurozone crisis.
"Euroministrar mot EMU"
European finance ministers opened the way for looser budget policies after a backlash against austerity thrust Italy into political limbo and shattered months of relative stability in European markets. Italy’s deadlocked election, France’s refusal to make deeper budget cuts and protests against the shrinking of the welfare state across southern Europe escalated the rebellion against the German-led prescription for fighting the debt crisis. I welcome the fact that the European institutions start to incorporate Keynes In a recent speech (from February 28th), European Commissioner for Economic and Monetary Affairs and the Euro Britain’s perilous austerity bunker
per·il·ous Adjective
David Cameron’s “there is no alternative” speech last week on the UK economy has aroused much criticism.
Simon Wren-Lewis of the University of Oxford
The Fiscal Multiplier
Europe faces an impossible challenge - why can't Olli Rehn see it?
I say "old friend" because Mr Rehn's rigid adherence to the script has become an almost comically blinkered form of dogma, rendering him more a subject for mockery and ridicule than the feared enforcer he is supposed to be. As I have said before, he can scarcely believe in what he is preaching, but a more loyal spokesman for the cause of fiscal austerity would be hard to find. Even those people who come from larger EU countries should be conscious of the fact that
Om arbetsmarknaden liberaliseras måste de som förlorar jobbet erbjudas grundläggande trygghet i väntan på att reformerna vitaliserar ekonomin och fler arbetstillfällen skapas.
De italienska arbetskraftskostnaderna har stigit stadigt efter införandet av euron, Jag var en av nästan 2,5 miljoner väljare som röstade ja i folkomröstningen. Irish Finance minister Michael Noonan played down concerns about the slide in sterling against the euro, saying the Irish economy is now strong enough to withstand the exchange rate shock even though Britain accounts for a fifth of the country's exports.
The post-election deadlock in Italy is an uncomfortable reminder that Over many years, the share of wages in national income stagnated or declined while a dramatic increase in the profit share contributed to the high levels of inequality that now blight the rich world. The political response to this challenge in the Anglosphere and in Spain was a social contract based on encouraging the illusion of wealth through credit-fuelled housing bubbles and increased social transfers. Unaffordable promises were the order of the day, too, across much of the eurozone. Debt problems were then compounded by the flawed construction of the monetary union. In a recent book, David Roche and Bob McKee of Independent Strategy argue that democracy in the 20th century became, in effect, a victim of its own success. After the end of the Cold War, it /democracy/ suffered a loss of vitality as the electoral process ceased to offer big ideas or clear choices and became increasingly beholden to special interest groups. Se t ex Villaägarna och Fastighetsskatten The fragility of a eurozone banking system that is overloaded with sovereign debt will once again be a cause of nervousness. Instead of a new social contract, we have a non-contract whereby southern Europe endures austerity with high unemployment and growing social strife while northern Europe provides no fiscal stimulus to allow southern austerity to work ‘Democrisis: Democracy caused the debt crisis. Will it survive it?’
In the fixed interest sector something irrational is undoubtedly going on
Austerity, Italian Style Den massiva utslagningen på arbetsmarknaden är en social och ekonomisk katastrof
Skadorna på ekonomin blir permanenta, såren för de enskilda djupa. I förlängningen hotas sammanhållningen och tilltron till demokratin, särskilt i länder som saknar en tradition av folkstyre. Så här var det inte tänkt att bli. För tre år sedan hävdade den politiska eliten – anförd av Tysklands Angela Merkel – att krisen var på väg att lösas, bara euromedlemmarna skapade ordning och reda i sina statsfinanser. Om regeringarna skötte sitt budgetarbete lika bra som Berlin skulle Europa snabbt vara tillbaka på banan. Det grundläggande tankefelet var att budgetunderskotten skulle ha skapats av skenande statsutgifter snarare än skattebortfall till följd av svag privat efterfrågan.
Financial Times ekonomiske kommentator Martin Wolf påminde nyligen om hur det lät på G20-mötet i Toronto 2010, då den så kallade åtstramningspolitiken sattes i verket. At the Toronto summit of the Group of 20 leading economies in June 2010, high-income countries turned to fiscal austerity. The emerging sovereign debt crises in Greece, Ireland and Portugal were one of the reasons for this. Policy makers were terrified by the risk that their countries would turn into Greece. The G20 communiqué was specific: “Advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilise or reduce government debt-to-GDP ratios by 2016.” Was this both necessary and wise? No. Because of its refusal to act as lender of last resort to governments,
By adopting OMT earlier, the ECB could have prevented the panic that drove the spreads that justified the austerity.
One can justify fiscal austerity, brutal though it is, as the only way to force adjustments of relative costs and the needed labour market reforms. My colleague, Wolfgang Münchau, argues that the opposite is true. But I wonder whether the eurozone will survive its cure. Mr Olli Rehn, The European Commissioner has been joking all along He's joking, right? Indeed he must be, and by going just a little bit too far in his claims, he's given the game away. The European Trade Union Confederation wades into the debate on internal devaluation with an open letter to commissioner Rehn, responding to the latter’s “upbeat August blog on sunny Spain” where he suggested Spain might emulate the “success stories” of Latvia and Ireland.
Krugman anklagade EU-kommissionären för en ”Rehn of Terror” för att han trots rapportens slutsatser argumenterar för att åtstramningspolitiken återupprättat marknadens förtroende.
Krugman har i en rad blogginlägg på New York Times attackerat Rehn just för att han har en övertro på åtstramningspolitiken, och Krugman anser att EU istället bör uppmuntra de skuldtyngda länderna att stimulera tillväxten snarare än att fortsätta minska utgifterna ytterligare. – Krugman sätter ord i min mun som i riksdagen skulle kallas för ”modifierad sanning”.
Paul De Grauwe and the Rehn of Terror
The Reign of Terror (5 September 1793 – 28 July 1794) Rolf Englund:
Om man har en sedelpress går man inte i konkurs.
"What we are seeing is that the effect of the OMT is truly powerful," said Marco Valli, chief euro zone economist at Unicredit. "A year ago if Italy were in this situation (bond yields) would have been going through the roof."
The Austerians, Olli Rehn, Olivier Blanchard and fiscal multipliers
Olli Rehn of the European Commission, a firm advocate of austerity, responds to the disastrous economic news in Europe, which has confirmed the warnings of austerity critics and led to a widespread reassessment of fiscal multipliers; it seems that they are large in a liquidity trap, just as some of us predicted. Rehn’s answer? We need to stop putting out these economic studies, because they’re undermining confidence in austerity! As I said, these signs of desperation are gratifying. Unfortunately, these people have already done immense damage, and still retain the power to do a lot more. krugman.blogs.nytimes.com/2013/02/16/gratifying-signs-of-desperation/ Mr Rehn, in a letter to European Finance Ministers, copied to other international financial luminaries like Christine Lagarde, says:
notthetreasuryview.blogspot.co.uk/2013/02/i-pointed-late-last-year-that-european.html The Teuto-Calvinists believe that the fiscal multiplier is around 0.5
Olivier Blanchard, the chief economist at the IMF, om multiplikatorn Peter Wolodarski, signerat DN 14 oktober 2012: Internationella valutafonden, IMF, tar upp frågan i sin senaste stora rapport och konstaterar att man tidigare underskattat den så kallade multiplikatoreffekten, det vill säga hur omfattningen av en åtgärd förändras när den fortplantar sig genom ekonomin.
Why is everybody so surprised by those GDP numbers?
These data must have come as no surprise whatsoever for anyone who has recently been doing the maths on fiscal multipliers.
Den nuvarande ekonomiska krishanteringen riskerar att undergräva demokratins grundvalar.
Nedskärningarna har lett till lägre efterfrågan, lägre tillväxt och högre arbetslöshet vilket i sin tur lett till en ökad statsskuld. Som svar på detta ordineras ytterligare besparingar, med samma resultat. Vi är övertygade om att denna spiral måste brytas. Annars ökar risken för att allt fler medborgare vänder politiken ryggen. Det är med stor oro vi ser hur kollektivavtal, anställningsskydd och välfärdssystem bryts sönder. Demokratins grundvalar undermineras och extrema krafter växer fram.
The eurozone's North-South misalignment has not been resolved.
The ECB's Mario Draghi has taken the risk of a sovereign default in Spain and Italy off the table, but he has not restored these countries to economic viability within a D-Mark currency bloc, and nor can he. Take a moment to read Eurozone crisis: it ain't over yet by Professor Paulo Manasse from Bologna University, posted on VOX EU. The European Commission’s 400-page report last week on the jobless crisis Employment and Social Developments in Europe 2012 (08/01/2013)
Ambrose Evans-Pritchard (AEP) increasingly faces the risk of running out of hyperbolic war-analogies sooner than the euro collapses.
Paul Krugman's Blind Spot
Since Krugman represents the mainstream of Anglo-American economic commentary and enjoys both popularity and an impact on policy, a post mortem of his positions in the European financial crisis are of broader relevance. Argentina is a large, closed economy that has mostly pursued populist economic policies, while Latvia is a very small, open economy, a member of the European Union with small public debt and excellent business environment. The only similarities were financial crisis because of large current account deficits leading to an absence of market financing. Krugman's most spectacular failure has been his prediction of the dissolution of the eurozone. As Niall Ferguson has noted, Krugman "wrote about the imminent break-up of the euro at least eleven times between April 2010 and July 2012." Well, that didn't happen. Not only did the eurozone remain intact but in 2009, Slovakia joined, as did Estonia in 2011; Latvia is set to join in January 2014. Not only did the eurozone remain intact but in 2009, Slovakia joined, as did Estonia in 2011; Latvia is set to join in January 2014. While anyone can make a mistake, Krugman's error was more profound, indicating a lack of understanding.
In the last century, three multi-nation currency unions in Europe have endured disorderly breakups -- namely the Habsburg Empire, Yugoslavia, and the Soviet Union. Luckily for European democracies, the ultimate verdict on crisis management belongs to the voters. Rome, Habsburg and the European Union ... Aslund praises Reinhart and Rogoff for providing an important corrective to the view that fiscal stimulus is always right – a position that is common across the Anglo-American economic commentariat, led by Paul Krugman in the New York Times.
As anyone who has been reading me, Martin Wolf, Brad DeLong, Simon Wren-Lewis, etc. knows, our case has always been that fiscal stimulus is justified only when you’re up against the zero lower bound on interest rates. What I think is happening is that austerians have put themselves in a box. They threw themselves – and their personal reputations – completely behind the various elements of anti-Keynesian doctrine: expansionary austerity, critical debt thresholds, and so on. And as Wolfgang Munchau says, the terrible thing was that their policy ideas were actually implemented, with disastrous results; on top of which their intellectual heroes have turned out to have feet of clay, or maybe Silly Putty. As I see it, the sheer enormity of their error makes it impossible for them to respond to criticism in any reasonable way. ... Latvia will join the euro on 1 January In 2010, most of the world’s wealthy nations, although still deeply depressed in the wake of the financial crisis, turned to fiscal austerity: slashing spending and, in some cases, raising taxes in an effort to reduce
budget deficits that had surged as their economies collapsed.
Why Austerity Works and Stimulus Doesn’t
Om ingenting görs åt Grekland illa kvickt går landet i konkurs. Why Latvia Should Not Devalue The EMU would not be the first multi-country currency zone to break up. ,
It all went wrong in 2010. The crisis in Greece was taken, wrongly, as a sign that all governments had better slash spending and deficits right away.
Europe must stay the austerity course
The strategy of triple-barrelled contraction across a string of inter-linked countries has been the greatest policy debacle since the early 1930s The fond hope of EU leaders and commissars is that the North-South chasm in competitiveness will be closed by "internal devaluations" in Club Med states before their democracies blow up.
And as we can see from the youth jobless rates in Greece (58pc) Spain (55pc), Portugal (36pc), Italy (35pc) it can take carpet-bombing to achieve effect. indefesible = cannot be altered or voided EuroCliff Några exempel. Spaniens budgetunderskott skulle enligt order från övriga EU-länder minskas från 6,3 procent av BNP i år till 2,8 procent 2014. I Portugal ska budgeten kapas med motsvarande över 3 procent av BNP bara under 2013 och i Grekland är besparingarna 7 procent av BNP under 2013 och 2014 varav det mesta ska tas nästa år. Detta trots att budgetunderskotten alltså är större i USA. Bland de som varit med och ställt upp dessa krav finns bland andra IMF. Can struggling eurozone countries achieve the necessary ‘internal devaluation’
With widespread anti-austerity protests sweeping Madrid, Athens and Lisbon, Open Europe has published a new briefing looking at the degree of ‘internal devaluation’ needed in struggling countries to keep the Eurozone intact – and whether citizens are likely to be able to stomach such adjustments. Open Europe’s Head of Economic Research Raoul Ruparel said: Räntechocken en besk medicin som verkar än
Trots att Sverige ännu inte var EU-medlem knöts kronan strax före valet 1991 /av finansminister Allan Larsson och statsminister Ingvar Carlsson/ till EU:s valutaenhet ecun - som var en föregångare till euron. Riksbankens uppgift var att försvara kronans växelkurs och den borgerliga regeringen, som tillträdde hösten 1991, var på samma linje. Samma dag som Sverige slog till med rekordräntan 500 procent gav Srorbritannien upp och lämnade EU:s valuasamarbete ERM. Det hade varit bättre att ge upp kronförsvaret i september, framhåller Olle Wästberg som var Anne Wibbles statssekreterare. Carl Bildt ser det alltjämt som ett misslyckande att man till sist tvingades släppa den fasta växelkursen. Det är inte med glädje som Carl Bildt ser tillbaka på torsdagen den 19 november 1992 då kronan slutligen tilläts falla.
Ingvar Carlsson och Carl Bildt är överens om att Sverige numera är betydligt bättre rustat än för 20 år sedan. Med 1990-talskrisen inleddes en reformprocess som betyder att svenskarna har drabbats relativt litet av dagens kris i Europa. När det gäller eurokrisen visar båda besvikelse över att valutaunionen inte blev vad de hoppades. Carl Bildt tror dock alltjämt på en gemensam europeisk valua, där vad han kallar relevanta länder är med. ---Ur Carl Bildts veckobrev v1/2002 Jag var statsminister under dessa år och fast övertygad om fördelarna med en hårdvalutapolitik. Det hade delvis att göra med de tidigare decenniernas erfarenhet av devalveringspolitik, men var delvis en konsekvens av att jag strävade efter att Sverige skulle gå in i det europeiska samarbetets kärna, också den ekonomiska och monetära unionen, och därmed vara med i den gemensamma europeiska valutan från dess första dag. Därför var Sverige väl rustat inför finanskrisen
- Sverige tvingades låta kronan flyta. Ur detta misslyckande föddes en framgång. Sverige fick visserligen betala ett högt pris för 1990-talskrisen, särskilt genom att arbetslösheten fastnade på hög nivå. Men samtidigt gavs chansen till stora förändringar som annars varit omöjliga. Den massiva sammanhållningen, tvärs över de politiska blockgränserna, förlängde kampen onödigt länge. Men på plussidan fanns den växande insikten om att Sverige behövde grundligt reformeras. Allt blev inte perfekt, men få längtar tillbaka till Televerkets monopol eller oändliga taxiköer. Lärdomarna från 1990-talskrisen sitter djupt, även om några bankers expansion i Baltikum och påföljane stora kreditförluster tyder på annat. Vi segrade vid Poltava 1992
Tomas Fischer: Med Bildt mot Poltava
Johan Schück, Poltava-föreningens hovreporter Grekland, Spanien och fredspriset till EU
Under den stora depressionen på 1930-talet fick ekonomen John Maynard Keynes kritik för att ha bytt ståndpunkt om penningpolitiken. Keynes replik blev klassisk: ”När mitt faktaunderlag förändras anpassar jag mina slutsatser. Vad gör ni, min herre?”
I Grekland backar ekonomin för femte året i rad, samtidigt som arbetslösheten passerat 25 procent och fortsätter att öka. De som har kvar arbetet tvingas acceptera drastiska lönesänkningar för att rädda jobben. I Spanien, som före krisen sågs som en europeisk framgångssaga, är situationen på arbetsmarknaden inte mycket bättre. De dystra tiderna driver dessutom landet mot upplösning, påhejat av katalanska nationalister. Samma separationstrend syns för övrigt i flera europeiska stater. Anders Borg tror att Grekland kan komma att tvingas lämna eurozonen Politicians are kept from taking full responsibility for battling recessions by the intellectual baggage of past decades. Multiplikatorn A deficit of common sense What matters is how austerity is imposed and what other policies accompany it. The experience of the past couple of years argues against sudden sharp cuts, and especially against tightening more when the economy turns out weaker than expected. Better to have a medium-term plan which gradually reduces underlying deficits. The debate centred on the value of an economic variable called a “multiplier”. A fiscal multiplier describes the change in GDP that is due to a change in tax-and-spending policy. A multiplier of 1.5, for instance, means that $1 in government-spending cuts reduces GDP by $1.50; a multiplier of 0.5 means a $1 cut in spending only reduces GDP by 50 cents. Multipliers work both ways: during the recession experts bickered over the extra economic bang to be expected from a given stimulus buck. But it is the impact of austerity that now preoccupies people. A simple example illustrates the multiplier’s importance. Take an economy growing at 1.5% a year and with a government budget deficit of 1% of GDP. If the multiplier is 2, spending cuts big enough to close the deficit produce a drop in GDP in the year the cuts take effect. For its pains the economy ends the year with a higher debt-to-GDP ratio than it started with. A multiplier below 1.5 means slow growth and a lower debt burden at year’s end. In 2013 economists at the IMF rendered their verdict on these austerity programmes: Hur stor är multiplikatorn, egentligen?
Han tittade på den förföriskt diagonala linjen i IMF:s diagram, som skulle visa att en extra nedgång i ett land stod i proportion till dess åtstramning. Och så gjorde han ”tumtestet”: Med båda tummarna höll han för de två länder som stod ut mest från de andra. Då syntes inget samband, resten av länderna bildade ett kaotiskt mönster. IMF:s misstag betyder inte att snabba åtstramningar är rätt, utan att sambanden är komplexa, varierar mellan länder och inte kan fångas i enkla formler. Robustness of IMF data scrutinised, By Chris Giles, Financial Times October 12 High fiscal multipliers undermine austerity programmes
If we exclude Greece and Germany from the 28 countries in their study, then their result largely melts away. It is also sensitive to the time period chosen, and does not appear to work for other similar periods. It is surely asking a lot to change the entire course of global economic policy on the basis of a result as flimsy as that. Having said that about this particular study, there are other, stronger, reasons for believing that fiscal multipliers are higher than many governments have been assuming. In the 1950s and 1960s, when Keynesianism was at its height, the multiplier was generally assumed to be around 2. Then in the 1990s and 2000s, these estimates gradually dropped, leaving the consensus range around 0.5-0.7 by 2009. No-one really knows for sure. However, what does not seem plausible is that the multiplier, in the current recession, is as low as governments assumed when they embarked on their austerity programmes in 2010. And that will make austerity much harder to sustain. It was disguised as a technical appendix, but it turned out to be an act of insurrection. IMF has published results from a study, which show that the impact of fiscal policy on growth is higher than previously estimated. The policy conclusion of a large fiscal multiplier is obvious: excessive austerity defeats itself. It must end. Wolfgang Münchau, Financial Times, 14 October 2012 One has to be clear about what this statement says, and what it does not. The IMF does not say that austerity is too hard, too unfair, causes too much pain in the short term or hits the poor more than the rich. It says simply that austerity may not achieve its goal of reducing debt within a reasonable amount of time. Peter Wolodarski, signerat DN 14 oktober 2012: Internationella valutafonden, IMF, tar upp frågan i sin senaste stora rapport och konstaterar att man tidigare underskattat den så kallade multiplikatoreffekten, det vill säga hur omfattningen av en åtgärd förändras när den fortplantar sig genom ekonomin. Tidigare trodde man att multiplikatorn låg på ungefär 0,5. Nu tycks den vara så hög som 1,7. Översatt till vanlig svenska betyder det att en budgetbesparing på 1 procent av BNP kan leda till ett BNP-ras på hela 1,7 procent. Effekterna av finanspolitiken – såväl åtstramningar som stimulanser – verkar bli extra stora när centralbankens ränta ligger nära noll och ekonomin befinner sig under sin normala kapacitet, så som i dag. Det är intressant att IMF nu officiellt tar avstånd från åtstramningarna, med tanke på att man under lång tid rekommenderade krisande ekonomier att just spara sig ur sina problem. I början av 1990-talet försökte fonden få Sverige och Finland att tillämpa sådana metoder, vilket lyckligtvis inte blev verklighet i Sverige Bank of England raised interest rates to 7 per cent in 1920.
What happens if a large, high-income economy, burdened with high levels of debt and an overvalued, fixed exchange rate, attempts to lower the debt and regain competitiveness?
"Lätt som en plätt" Republicans are dead wrong But the report isn’t just downbeat; it contains a careful analysis of the reasons things are going so badly. And what this analysis concludes is that a disproportionate share of the bad news is coming from countries pursuing the kind of austerity policies Republicans want to impose on America. O.K., it doesn’t say that in so many words. What the report actually says is: “Activity over the past few years has disappointed more in economies with more aggressive fiscal consolidation plans.” But that amounts to the same thing. The tipping point
"the spectacular failure of austerity policies in Europe" That said, you should be a Keynesian, too. The experience of the past few years — above all, the spectacular failure of austerity policies in Europe — has been a dramatic demonstration of Keynes’s basic point: slashing spending in a depressed economy depresses that economy further. Jag tror att man kan hitta en del nyttiga insikter bland Karl Marx läror Dr Merkel är förbundskansler Angela Merkel och alla som med henne tycker att greker och spanjorer ska lida och spara och Dr Krugman är nobelprisvinnaren Paul Krugman och alla andra nykeynesianer som anser att statsmakterna bör spendera mera för att stimulera ekonomierna. Alkoholisten sökte upp Dr Krugman, som ordinerade en rejäl återställare. Han hällde upp ett stort glas whisky som alkoholisten genast sög i sig. Det där gjorde susen, sa han och log tacksamt mot Dr Krugman. Doktorn lutade sig förnöjt tillbaka i stolen, satte fingertopparna mot varandra och förklarade att modern forskning visat att avhållsamhet i hundra procent av fallen skapar lidande för alkoholister, medan en stor sup i hundra procent av fallen ökar välbefinnandet. Dr Krugman misstänkte att avhållsamhetsförespråkarna egentligen bara var gammaldags moralister. Dagens politiska och ekonomiska debatt och skeende – läs det ständigt pågående europeiska toppmötet om euron, Grekland, Spanien, Portugal, bankerna etc – handlar egentligen inte om hur krisen ska lösas utan om hur krisen ska administreras. Krisen kan inte lösas. Fordringar på någon som inte kan betala är i realiteten värdelösa. Det är bättre att inse detta och ta konsekvenserna än att låtsas som om en smärtfri bot vore möjlig. Dr Merkel och Dr Krugman. Vem har rätt? Ska den grekiska staten, för att ta ett exempel, spara eller stimulera ekonomin? Kommentar av Rolf Englund Marknadsekonomin samlar då och då på sig en massa kapital som kräver avkastning men inte kan få det, kort sagt kapital som blivit överflödigt, Det är svårt att förstå vad han menar. När en låntagare inte kan betala brukar långivarna få ta förlusten Patriks artikel verkar gå ut på att någon bör ta förlusten så fort som möjligt Den process som pågår verkar gå ut på att flytta fordringarna från de tyska och franska bankerna till skattebetalarna. Därefter kan man ta konkursen. Men Patrik skriver ingenting om hur Grekland m fl skall återfå sin konkurrenskraft. Han nöjer sig med att skylla på marknadsekonomin och "nykeynesianen "Krugman. De som tror att man kan finna sanningen hos Marx har aldrig förlåtit Kenyes för att han räddade kapitalismen på 1930-taelet. När staten och den privata sektorn samtidigt kapar sina skuldberg Kommentar av Rolf Englund – Flera av de länder vi ser har varit 4-5 år i kris, de har flera år av reformer framför sig. Their costs are 30-40pc out of line with Germany's. It is a fantasy to believe that such a gap can be closed by "reform". Sällan har så många haft så fel Peter Wolodarski, Dagens Nyheter 24 juni 2012: Förespråkarna av denna strategi – däribland finansminister Anders Borg – hävdade att en hård saneringspolitik med snabbt sänkta utgifter och höjda skatter kommer att vinna marknadens gillande. Räntorna pressas ned och i ett trollslag lyfter åtstramningen ekonomin.
Såväl de ekonomiska som politiska resultaten vittnar om ett flagrant misslyckande. En redan skyhög arbetslöshet har spätts på, krisländernas statsskuldsräntor är ohållbara och den sociala och politiska oron tilltagande. Den rådande laga efter läge-strategin, kombinerat med uppläxande och direkt kontraproduktiva krav på kortsiktiga budgetsaneringar, kommer bara att förstärka splittringen och depressionen i Europa. Peter Wolodarski, Dagens Nyheter 24 juni 2012 Peter Wolodarski (PW) fortsätter sin omprövning av DN:s tidigare EU-politik Spanien och Irland kan inte så lätt välja den svenska vägen till välstånd och ekonomisk stabilitet. Det är svårt att byta från euron till en egen valuta. Sverige i slutet av 80-talet och, framför allt Spanien och Irland, från eurons införande 2002 drabbades av en kraftig och långvarig ekonomisk överhettning genom en bygg- och fastighetsboom finansierad genom lån till låga räntor. När sanningens timme slår i ett sådant läge finns det två lösningar. Den andra lösningen är att landets valuta får falla kraftigt Med svenskt stöd har nu den s k finanspakten införts. Denna innebär att länderna måste minska sina budgetunderskott dramatiskt redan nu och sedan aldrig dra på sig strukturella budgetunderskott i framtiden. Detta betyder att det inte bara är en katastrof att ha euron som valuta i detta läge utan det är en katastrof att vara underkastad eurozonens regler som alltså går ut på att hindra den överföring av skuldsättning från hushåll och företag till staten som är så viktig för att göra anpassningsprocessen mindre brutal och politiskt farlig. Och notera slutligen finanspakten är i stort sett helt irrelevant för att hindra nya eurokatastrofer. Den förbjuder budgetunderskott, men Spanien och Irland hade inga budgetunderskott när de gick in i katastrofen. Om målet är att kunna balansera de nationella ekonomierna, kan man inte ha gemensam valuta. Den amerikanska valutaunionen fungerar därför att arbetskraften flyttar över delstatsgränserna från stater med arbetslöshet till stater med hög efterfrågan på arbetskraft. För 20 år sedan befann sig Sverige i en svår finanskris Detta är själva syftet med den nu förda politiken, som ju går ut på att sänka offentliga utgifter och höja skatter
så att skyhög arbetslöshet och företagskonkurser tvingar fram fallande löner Det är det man menar med uttrycket ”interndevalvering” Nils Lundgren, 22:e januari 2012 RE: The Ultimate Article about EMU and the Eurocrisis Latvia, Internal devalutation For years Spain and other troubled European nations have been told that they can only recover through a combination of fiscal austerity and “internal devaluation,” which basically means cutting wages. It’s now completely clear that this strategy can’t work unless there is strong growth and, yes, a moderate amount of inflation in the European “core,” mainly Germany. Consider, for example, what Jörg Asmussen, the German representative on the European Central Bank’s executive board, just said in Latvia, which has become the poster child for supposedly successful austerity. Latvian success consists of one year of pretty good growth following a Depression-level economic decline over the previous three years. True, 5.5 percent growth is a lot better than nothing. But it’s worth noting that America’s economy grew almost twice that fast — 10.9 percent! — in 1934, as it rebounded from the worst of the Great Depression. What explains this trans-Atlantic paralysis in the face of an ongoing human and economic disaster? Whatever the deep roots of this paralysis, it’s becoming increasingly clear that it will take utter catastrophe to get any real policy action that goes beyond bank bailouts. But don’t despair: at the rate things are going, especially in Europe, utter catastrophe may be just around the corner. Lativa If an internal devaluation in a country suffering from a lack
of international competitiveness were to succeed, Levelling out competitiveness in the euro area will be costly One measure of progress, unit labour costs (the average cost of staffing per unit of output), is declining and will continue to do so, according to the OECD’s latest Economic Outlook. OECD’s latest Economic Outlook In 1931, Austria was attempting to deliver the kind of austerity now being witnessed in parts of southern Europe. Interndevalvering A devastating analysis by the economist Luis Garicano has convincingly argued that the fiscal consolidation needed in Spain to meet any given level of deficit reduction would be up to double what the government is projecting. The /Spain/ government’s calculations are based on a simple extrapolation of the necessary fiscal adjustment from nominal GDP. The fall in the value of the pound in 2008 was one of the largest depreciations to have occurred in a major industrial country since the war The survival of the eurozone now depends on Italy and Spain. The firewall preoccupation distracts from the fundamental issue: what should the EU do to help Italy and Spain retain political support for reforms? Instead of quarrelling over firewalls, Europeans should add just a fraction – say €10bn – to the capital of the European Investment Bank. EIB could use more capital to borrow and then invest to support structural reforms, showing Spaniards and Italians that their sacrifices will draw productive investments. IMF still won't admit truth about the euro Spain could be the next European economy brought down by German-led mismanagement of the euro-zone crisis. Columbi ägg? In addition, the value of their outstanding debt would decline along with the value of the euro, and they would be more likely to be able to make payments on that debt and avoid defaulting. The trouble with thr conventional scenario is that it rests on a couple of big misconceptions – namely, that the chief problems of the weak countries are budget deficits and debt, and that if budgets are balanced and debt is managed down, those countries will be able to make interest payments on their bonds and the banks that own those bonds won’t have to suffer big losses. In reality, though, the biggest problem of financially troubled European countries is not debt, but high labor costs. It would then be up to Germany to decide whether to leave, perhaps with Austria, the Netherlands and Finland. All this would be apart from the failure of two generations of efforts to build a strong European framework around Germany itself. - Det som Tyskland fruktar, dvs. en kraftig förlust av konkurrenskraft mot södra euroområdet, är nödvändig för att komma ur eurokrisen. The tightrope PM Rajoy is trying to walk between austerity and human costs is the fault line dividing the whole of Europe. Louise Armitstead, Telegraph 29 March 2012 Spain now finds itself at the centre of a great eurozone laboratory experiment designed The eurozone must do more to support the internal devaluation pursued by the countries at its periphery. The mantra of austerity and its resulting ritual – the fiscal compact – were bound to create short-term misery, particularly in the eurozone’s periphery. Countries such as Spain and Italy should shift taxation from labour to consumption, but Germany and other surplus countries could help by doing the opposite. The effect would be to stimulate consumption in the core, while reducing unit labour costs in the periphery. There is room for further monetary easing. A new three-year longer-term refinancing operation should take place only in a real emergency. There is no central bank shortcut to the goal of full employment.
Jag tycker det är skriande uppenbart att räntan världen över är för låg Policy makers now exhibit a zealot-like faith that the necessary discipline can be established over the next two or three years. The reality is that a few years of surpluses or deficits hardly tell us anything about fiscal discipline. Thus the zealots, who are broadly part of the euro-enthusiast group, provide the euro’s opponents with a solid argument: namely, that the euro area is unable to deal with its own flaws. This case, however, is not made loudly by the euro’s opponents because they fear they might be listened to, and that the euro area would end up fixing its most glaring flaw. (They should relax, the euro has many other failings, some potentially lethal, but now is not the time to list them). Spain The founders of the euro thought they were forging a rival to the American dollar. Vad som sker just nu i Europa är något helt annat än vad Sverige genomförde på 1990-talet. Att skära ner i en liten ekonomi när resten av världen går bra (och dessutom bli belönad med lägre och lägre ränta) är en sak. I Sverige vågar dock nästan ingen säga det av rädsla för att stöta sig med våra modiga män och kvinnor på finansdepartementet. Vi är helt irrationella i den här frågan. Katrine Kielos i en ledarkrönika Aftonbladet den 8 april 2012 Utan genomgripande reformer driver Italien närmare ett grekiskt tillstånd Yes, Mussolini pulled off a 20pc cut in wages in the late 1920s. You can erode real wages through inflation, but it is nigh impossible to cut them in absolute terms. The Baltic states have done so in very particular circumstances, but mostly with devastating falls in GDP (26pc top to bottom in Latvia, and some have the gall to cite Latvia as a success story). Such economic contractions across Club Med as a whole would be large enough in aggregate to tip the whole eurozone into catastrophe. The combined public and private debt burden in Spain, Italy, and Portugal is much larger as a share of GDP than in Estonia, and even Latvia. The Federal Reserve Bank of San Francisco has an essay on its website showing that US wages in the industries in most trouble have scarcely dropped at all since the onset of the Great Recession - despite economic - even though the country has one of the most flexible labour markets in the world. Hur skall Portugal, Grekland och Spanien kunna pressa ned lönekostnaderna så att de kan konkurrera med tyska fabriker? Förr gick det att devalvera sig till konkurrenskraft. Mer euron är den vägen stängd. Och klarar de politiska systemen de påfrestningar som skapas när var fjärde person är arbetslös? Jens Henriksson född 1967, är sedan 2010 VD på Stockholmsbörsen. Henriksson har tidigare arbetat på Finansdepartementet, bland annat som statssekreterare 2002-2006 Ingen länk Eurokrisen i ett ord: 23.6 Eurokrisen, fisksoppan och elitens olidliga dumhet och Tyskarna gick in i EMU med en övervärderad kurs The Germans entered EMU at an overvalued rate Few have realised the most dangerous feature of Emu: it has locked Germany into a seriously uncompetitive real exchange rate Wolodarski och Tysklands framgång med Ådalsmetoden Nouriel Roubini: markets are “schizophrenic” they cannot decide whether to reward or punish countries such as Regaining competitiveness is hard through only “internal devaluations” associated with tight fiscal policy. Hary Flam vill ha lönesänkningar i krisländerna Christian Danielsson, vice generalsekreterare i EU-kommissionen, pekade på att när den ekonomiska krisen slog till mot EU-länder 2008 var det uppenbart att regelverket som skulle hantera krisen var helt otillräckligt. - Som det ser ut nu har jag ingen anledning att tro annat än att medlemsländerna kommer att gå in i detta fullt ut och med kraft, sade Christian Danielsson, som tidigare varit Sveriges EU-ambassadör i Bryssel. Förra gången det var ekonomisk kris bröt Tyskland och Frankrike mot regeln att inte ha större budgetunderskott än tre procent men pressade igenom regellättnader 2003 för att slippa undan. Frågan är hur det blir denna gång för Tyskland och Frankrike när EU-reglerna blivit betydligt tuffare.
Först ut i debatten var den moderate Europaparlamentarikern Gunnar Hökmark som sade sig vara rätt optimistisk när det gäller vägen ur krisen. Ekonomiprofessor Harry Flam: Det är ett fruktansvärt dilemma att de åtgärder som krävs för att få ner skuldbördan och få budgetbalans kommer att försämra konjunkturen i Europa. – De måste få tillbaka konkurrenskraften. Det innebär att de måste ha lägre /ökning av / priser och löner än andra länder. Som Calmfors utvecklar, är huvudproblemet nu att krisländerna tvingas strama åt finanspolitiken i ett läge då deras konkurrenskraft Rolf Englund: Bekymret är hur långt stålbad villaägare, väljare och regering klarar. Det är den fråga många inom och utom landet ställer sig. Räntefallen i Sydeuropa och Irland när euron infördes kan ses som en gigantisk asymmetrisk störning som stimulerade till överbelåning. Problemet med budgetnedskärningarna i krisländerna är att de samtidigt minskar BNP och därmed också skatteintäkterna. Budgetkonsolideringen i Sverige 1994–2000 är ett exempel. Trots kraftiga budgetnedskärningar var tillväxten hög. Euroländerna har inga växelkurser som kan förändras mot varandra. Det finns då endast två sätt att göra en real depreciering på. Eurosamarbetet kommer förmodligen att fungera bättre i framtiden. För det krävs nominella lönesänkningar i krisländerna Men det är mycket svårare att få acceptans för att sänka reallöner på detta sätt än genom en valutadepreciering. ”Situationen i euroområdet har fått utvecklas till en sådan djup kris att inga enkla lösningar längre finns att tillgå”, Greece suffers from both heavy indebtedness and a lack of competitiveness. Attempts to cut back on the debt by austerity alone will deliver misery alone. Only measured austerity combined with economic growth offers a way out. But while Greece is so uncompetitive it is difficult to see where growth will come from. The solution offered by Germany and its allies is that austerity will lead to an internal devaluation, i.e. deflation, which would enable Greece gradually to regain competitiveness. The greatest threat to the euro is that Greece will make a success of default and devaluation. Risken är stor att det nya räddningspaketet också bygger på alltför optimistiska antaganden, "events have a habit of demolishing dreams" - Portugal, internal devaluation After a deceptive calm, the surge in job losses since last summer is shocking even for those who never believed that combined fiscal and monetary contraction could possibly lead to any result other than ruin. A variant of this lies in store for Portugal as its "internal devaluation" starts in earnest. Det som Tyskland fruktar, dvs. en kraftig förlust av konkurrenskraft mot södra euroområdet, är nödvändig för att komma ur eurokrisen. Alla vet att Grekland, Italien, Spanien och Portugal måste förbättra sin konkurrenskraft mot Tyskland och Nordvästeuropa. Eftersom de inte har någon egen valuta som kan falla, måste detta ske genom att de klarar att hålla en lägre pris- och lönestegringstakt än framför allt Tyskland under många år, dvs. tysk industri måste förlora konkurrenskraft mot dem. Detta är inte en olycklig biprodukt utan själva syftet med den nu förda politiken, som ju går ut på att sänka offentliga utgifter och höja skatter så att skyhög arbetslöshet och företagskonkurser tvingar fram fallande löner (och fallande priser på inhemska non-tradeables som turisttjänster). Det är det man menar med uttrycket ”interndevalvering” som är en samhällsekonomiskt och socialt enormt kostsam metod att återställa balansen i en ekonomi. Hur skall Portugal, Grekland och Spanien kunna pressa ned lönekostnaderna Greklands interndevalvering och Ådalshändelserna What Greece has in essence committed itself to is an internal devaluation lasting years, if not decades into the future. Quantifying Eurozone Imbalances and Claus Vistesen is a 23 year old macroeconomist Could the West simply start saving and paying back its debt? A new report released by the European Commission late last week “Young people remain the hardest hit by the crisis and its aftermath,” says the report, and the faltering recovery is expected to make things worse. “In short, income shocks may prove permanent and income losses at the bottom of the distribution can be persistent.” Brussels – Against the backdrop of Europe’s persistent jobless youth rate of 21%, the Commission is pleading for Member States, workers’ representatives and business to join forces and take decisive action to tackle youth unemployment. The new ‘Youth Opportunities Initiative’, adopted by the Commission today, “The Youth Opportunities Initiative – President of the European Commission José Manuel Barroso said – shows young people across Europe that we are attentive to their situation. Mr László Andor, EU Commissioner for Employment, Social Affairs and Inclusion stressed the urgency to tackle the youth jobless rate saying: “The current situation for young people in many EU countries today is becoming dramatic. Without decisive action at EU and national level we risk losing this generation with a heavy economic and social cost”. Underlining that estimates show that the burden on society of current youth unemployment levels is about €2bn each week, or just over 1% of EU-27 GDP, the Commissioner added: “The current trend cannot continue, we must give young people hope. They are our future.” Recent events have given us a dramatic demonstration of The compact will not resolve today’s troubles. Euro Greece simply gets to choose what it wants to be the cause of a depression. Long and slow or fast and deep? Choose wisely. Rolf Englund: Även om man, på något sätt, skulle kunna ta hand om medlemsländernas skulder så återstår arbetslöshet och stagnation förorsakat av felaktigt kostnadsläge. Att klara det genom nominella lönesänkningar, Ådals-metoden, kallas på fint språk för Interndevalvering, är inte praktikabelt. Felet är att eurozonens ledare inte vill inse att allt var fel från början. De vill inte inse att tanken, att ha en gemsam valuta för Tyskland och Grekland, Finland och Cypern, var och är en felaktig tanke. Allt var fel från början, precis som kommunismen. Mer om detta via länkarna nedan. Wolodarski och Tysklands framgång med Ådalsmetoden Greklands interndevalvering och Ådalshändelserna Det finns ingen lösning, bra eller dålig, på eurokrisen
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