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Tuesday, December 31, 2013

Three big macro questions for 2014 | Gavyn Davies

Three big macro questions for 2014 | Gavyn Davies

Today, this blog offers a year end assessment of three crucial issues that relate to this: the supply side in the US; China’s attempt to control its credit bubble; and the ECB’s belief that there is no deflation threat in the euro area

Tuesday, December 17, 2013

Coppola Comment: Weird is Normal

Coppola Comment: Weird is Normal: My latest post at Pieria: "Three years ago, Nick Rowe produced  this post  describing a “weird world” – a world in which the equilibr...

Monday, December 2, 2013

Intelligence2 Angela Merkel is Destroying Europe

BBC World News will broadcast a 45 min edit of this debate on 7th December at 09.10 and 20.10 (GMT) and on 8th December at 02.10 and 15.10 (GMT).

For the motion:

for the motion

Mehdi HassanMehdi Hasan

Political director of the Huffington Post UK, biographer of Labour leader Ed Miliband and the author of an e-book on austerity myths

Euclid TsakalotosEuclid Tsakalotos

MP for the Syriza party in Greece, economic adviser to Alexis Tsipras, the party leader, and a professor of economics at the University of Athens

against the motion

Antony BeevorAntony Beevor

Award-winning historian of the Second World War

Christine OckrentChristine Ockrent

Belgian-born journalist and former chief operating officer of France 24 and RFI. She was also editor in chief of the weekly news magazine L’Express

Monday, November 25, 2013

Is Time Running Out For The Eurozone?

John Mauldin thinks that "we should confine the leaders of Europe to a far-northern Scandinavian hotel with hard beds and minimal amenities until they resolve their problems."...because "deflation is back and winter is coming"...
 He fears that France may be a likely, and perhaps fatal, shock.
Wolf Richter is in similar mode He highlights, and comments on, a study by Natixis (grateful as I don't speak French) in a post titled (it says it all) French Megabank: “Germany Should Leave The Eurozone”  
Speaking of France, Prof John Gaffney at the LSE/EUROPPBLOG says "that François Hollande has failed to project a clear and effective public persona and that his presidency is now on the verge of unravelling."

(Disclosure: It has been some months now that I have progressively moved towards a Euro-skeptic, dangerously approaching the anti-Euro position... ha!)

Tuesday, November 19, 2013

Can The Eurozone Be Saved? LBJ School, Univ.of Austin, Tx

The videos of the conference organised by James Galbraith and Yianis Varoufakis were made available

Two notes, without comment.
1. Giwrgos Stathakis : ... "(b) The main cause of the economic destruction of Greece is not the problems of the Greek economy prior to 2008. It is the programme itself, (c) The programme itself does not arrest none (sic) of the problems prior to 2008"
2. Yves Leterne (Deputy Secr.Gen. of OECD, Belgia PM in Spring 2010) ... The decision to support Greece was a political one"

Monday, November 18, 2013

P. Boone & S. Johnson d/d Apr.6 2010 "Greece And The Fatal Flaw In An IMF Rescue"

Peter Boone and Simon Johnson Apr.6 2010
Two informed realists explain (present tense) 

Their essay ends so
Where next for Greece?
Mr. Trichet understands that Greece’s problems reflect a dangerous flaw in the euro zone system, and the solution will set the tone for behaviour of other members for years to come.  He’ll want his pound of flesh before this is done.  The IMF staff surely understands that Greece’s economic problems are critical, and require drastic actions, but the IMF’s managing director just wants to survive to be elected a new President of France in 2012.
The German population detests providing bailouts to periphery nations, while the debtors of the Euro zone would like the same game to continue a little bit longer.  Meanwhile, the Greeks continue to drag their feet on serious reform while claiming to be “courageous”– presumably they are hoping, magically, that markets will start to want to lend to them again at very low rates in the midst of a fiscal program with little hope for long term success.  It all seems horribly reminiscent to those early days when Argentina slid towards a cruel collapse.

Monday, November 11, 2013

Helen Thompson "The dirty little secret of the euro zone crisis: the German banks"

We Need a Europe That is Truly Social and Democratic

Yves Leterme, Deputy Secretary General of the OECD "How To Address The Eurozone Problems?"

Saturday, October 19, 2013

10 reasons why the ESM might never take a stake in a bank

Alex Barker at FT/Brussels Blog
For the more optimistic finance ministers the ultimate, ultimate backstop — only to be used in exceptional circumstances — is apparently a “direct recapitalisation” from the European Stability Mechanism, the eurozone’s E500bn bailout fund. The trouble is that there are a legion of hurdles to clear before using this instrument....
 ss. την επόμενη φορά που κάποιος θα αναφερθεί στο θέμα Απευθείας Ανακεφαλαιοποίηση Απο Το ESM, θα του ενεχειριάσω ένα αντίγραφο του άρθρου!!!

Lacey Hunt "..the great monetary experiment"

Guest Post at Fabius Maximus .
 (initially posted at  Testosterone Pit

EZ crisis and historical trilemmas | vox

Thursday, September 19, 2013

German labour reforms: Unpopular success | vox

German labour reforms: Unpopular success | vox

My loose paraphrasing of the Juncker saying: We know what to do: the problem is how to get re-elected... see Gerhard Schroeder and SPD (!)

Βασίλης Λυριτζής

είπε σήμερα, σε συζήτηση με την Αθηνά Δρέττα του ΠΑΣΟΚ
"μας καλείτε να υποστηρίξουμε ένα πολιτικό σύστημα, που μας έφερε εδώ..."

Όχι κύριε! Άλλο πράγμα το Πολιτικό Σύστημα, της Κοινοβουλευτικής Δημοκρατίας και άλλο  η όποια ποιότητα/λειτουργία συγκεκριμένων κομμάτων.

Ίσως, αν έλεγε το ίδιο σε μία πολιτική επιστήμωνα, αντί οδοντογιατρού-πολιτικού,  θα έπερνε την απάντηση που έπρεπε. 

Barry Eichengreen 'Is Europe Out Of The Woods?"

Mats Persson, director of Open Europe, has an op-ed in WSJ

posted at Open Europe blog "

No quantum leap on eurozone integration after the German elections

It's constitutionally complicated, for example, to write down Greek debt, given that 75% of it is now owned by taxpayer-backed institutions in Germany and the rest of the euro zone. If those institutions take losses on what until now have been loan guarantees, that will in effect turn the euro zone into a transfer union for the first time, which the Constitutional Court has said is illegal. German politicians will continue to have one hand tied by the court in Karlsruhe for years to come.

Sunday, September 15, 2013

‘Austerity’ should not be confused with pragmatism by Patrick Honohan, governor of the Central Bank of Ireland, Sep 10, 2013

h/t to Philip Lane . 
The article is here , worth reading all.
At the end of the second World War, Britain faced a crippling debt burden...Keynes presented three options...(3d option) "cancel debt" on the grounds...the British shipped Keynes to Washington in September 1945 to seek “justice”, to wit, the third option...  the creditors were both unimpressed and irritated by the line adopted by the British negotiators... 
Within two weeks Keynes was reduced to asking a shocked Whitehall for permission to reverse course and negotiate that tempting long-term loan (2nd 0ption). It took a further two months before even that was agreed – and on terms which were less favourable than had been hoped for.

History teaches pragmatism!

Did the euro kill governance in the periphery? | vox

Did the euro kill governance in the periphery? | vox

""Greece is the poster child for postponed adjustment. Greece's curse, more than any of the other peripheral countries, was an unreformed economy. Although the examples of arrested reforms are many, one of the clearest is the pension system, where reform has been considered imminent at least since 1990 as the system faced both a dramatically rising dependency ratio and an overly generous replacement ratio (OECD 2009). Furthermore, the system was extremely fragmented, with 236 separate funds in 2003 (O'Donnell and Tinios 2003) that caused inefficiencies and duplications and yet left many pensioners at risk of poverty. There had been sporadic attempts at reforming this defective system. Some changes had taken place in 1992 when the budget was under serious strain, but they did not tackle the long-term imbalances. The year 2001 saw the defeat of a reform package of the pension system that had first been proposed in 1958 and was already considered extremely urgent (Borsh-Supan and Tinios 2001). A new reform package, characterised by creative accounting and little real reform, sailed through parliament in 2002. The government of Greece had been under some pressure during the negotiations about joining the Eurozone. But once Greece had entered the Eurozone, the pressure was off, pension and other economic reforms were abandoned and not taken up again until Greece was already in the midst of the worst of the economic crisis.""

Saturday, September 14, 2013

Friday, September 6, 2013

Ανταγωνιστικότητα: Λίγο ακόμη και πιάνουμε πάτο

Εκμετρώ το τελευταίο 1/7, άντε 1/6 του βίου μου και θα είναι το πιό "ζόρικο"! Οι γενιές που έρχονται όμως; Τί να περιμένουν;
Ο Francesco Saraceno με έστειλε στο World Economic Forum: Global Competitiveness Report 2013-2014 και "ψυχοπλακώθηκα".
Η Ελλάδα, επαξίως κατέχει την 91η θέση απο τις 148: κοντά-κοντά με Μολδαβία, Ναμίμπια, Τρινιντάντ-Τομπαγκό και Ζάμπια!
Άμεσα ανταγωνιστικές χώρες όπως η Τουρκία (44η θέση) και η Βουλγαρία (57η θέση) βρίσκονται σε απόσταση.
Όμως, στο κριτήριο "Διαθεσιμότητα Επιστημονικού/Τεχνικού Προσωπικού" σκίζουμε: θέση, μία πάνω απο ΗΠΑ. Κάτι είναι κι αυτό: όπως το χρυσό της Πατουλίδου!

Η εικώνα δέν αλλάζει αν δεί κανείς τον Doing Business 2013 data της World Bank 

Tuesday, September 3, 2013

Σχέδιο Μάρσαλ : Παντελής Μπουκάλας και Νίκος Ξυδάκης

Οι καλοί σχολιαστές (εδώ κι εδώ) στη σημερινή Καθημερινή καταθέτουν την γνώμη τους και αναφέρονται στην πρόταση για κάποιο Σχέδιο Μάρσαλ για την Ελλάδα.
Η πρόταση έχει γίνει σε πολιτικό επίπεδο απο τον Α.Τσίπρα/ΣΥΡΙΖΑ και σε ακαδημαϊκό απο το Levy Institute και τον Δημήτρη Παπαδημητρίου στο Bloomberg (σσ. Αξίζει κάποιος να διαβάσει τα σχόλια στην πρόταση του καθ. Παπαδημητρίου στο Bloomberg).
Μιά καλή περιγραφή του Σχεδίου Μάρσαλ έκανε ο (γερμανός) καθηγητής του LSE Albrecht Ritschl στην εισήγησή του στο Οικονομικό Συνέδριο (2012) της Κεντρικής Αυστριακής Τράπεζας.           (σσ. κατεβαίνει με κάποια δυσκολία...αξίζει η επιμονή)

Το δικό μου σχόλιο στο θέμα με μία λέξη: χίμαιρα!

Friday, August 16, 2013

Kenneth Thomas :Annals of Austerity FAIL, Eurozone Redux

Middle Class Political Economist: Annals of Austerity FAIL, Eurozone Redux: July 31 saw the latest release of European Union unemployment numbers, and Monday's gross domestic product figures brought no joy, espec...

my comment
With the twin deficits above 15% of GDP each in 2009, the borrowed time of the Greek economy had long been exhausted. The non-option of default led to the two bailouts (110+130 bln), and also a haircut and buy-back of debt that reduced it by some 120 bln.
Austerity was not meant to be of the Alesina-Ardagna variety: it was rather what Edward Hugh defined:
What happened .... was not a case of long established living standards being suddenly slashed, it was a case of them being cut back to where they were before they were raised in an unsustainable way in order to win elections.

Thursday, August 15, 2013


CONVERSABLE ECONOMIST: A Euro Narrative: When a timetable for putting the euro in place was annouced by the Delors Commission back in 1988, I didn't believe it would ever happen...

note: JEP collection of papers on the euro

Friday, July 26, 2013

Νίκος Ξυδάκης : Θέλουμε μικρομεσαίες επιχειρήσεις;

Το άρθρο του Ν.Ξυδάκη στην ΚΑΘΗΜΕΡΙΝΗ έρχεται σε συνέχεια πάμπολλων τέτοιων για την "συμπαθή" τάξη των μικρομεσαίων.
Όλα καλλά, όμως:
  1. Ας μήν μιλάμε για ΜΜΕ αλλά για "μικρομάγαζα". Ο μαγαζάτωρας δέν είναι επιχειρηματίας αν δέν μπορεί να αναπτυχθεί και να πάψει να χαρακτηρίζεται μικρός ή μεσαίος.
  2. Το "μαγαζί", είτε μιλάμε για κατάστημα λιανικής, εστιατόριο, πρατήριο καυσίμων, οδοντογιατρό, ελεύθερο μηχανικό, κλπ., χαρακτηρίζεται απο (α) χαμηλή παραγωγικότητα, (β) χαμηλή επένδυση σε τεχνολογία, και (γ) στόχο -λόγο ύπαρξης-  "να βγεί το μεροκάμματο", τέτοιο που ο μαγαζάτωρας να ζεί την οικογένεια καλλά, να έχει την απαραίτητη Merc, εξοχικό, πλωτό και διακοπές στο Bali.
  3. Επίσης, χαρακτηρίζεται απο υψηλό δείκτη (α) φοροαποφυγής/φοροδιαφυγής, (β) ασυνέπειας απόδοσης ασφ.εισφορών, ΦΠΑ, κλπ.
  4. Το 2010 η χώρα μας "απολάμβανε" το υψηλώτερο, στις χώρες του ΟΟΣΑ, περιθώρειο μικτού κέρδους στο χοντρικό και στο λιανικό εμπόριο
Το 2010 το 55% της απασχόλησης ήταν σε μαγαζάκια μέχρι 10 εργαζομένων και ένα 28% ήταν αυτοαπασχολούμενοι: άν υπολογίσουμε και το Δημόσιο, τί μένει στον πραγματικό επιχειρηματικό τομέα; 
Το όλο σύστημα κινήτρων/αντικινήτρων που διατηρεί "εν ζωή" μαγαζιά που θα έπρεπε απο χρόνια να μήν υπάρχουν πρέπει να καταργηθεί. Ο αείμνηστος Ξ.Ζολώτας μίλησε για "υπερ-επαγγελματισμό", τουλάχιστον το 1990!

Saturday, July 20, 2013

mainly macro: The Eurozone’s Founding Mistake

mainly macro: The Eurozone’s Founding Mistake: It really was predictable. Take away the ability to control national interest rates, and you create a potential for patterns of demand to d...

Monday, July 15, 2013

NYT Editorial Board "Wrong Prescription for Greece"

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Greece and its financial overseers agreed on terms for continued bailout payments on Monday. The agreement is cause for relief — without it Greece would go bankrupt. But, at the same time, it is no cause for celebration — indeed, quite the opposite. Greece must eventually carry out painful reforms. But the precondition for these reforms is not the austerity demanded by the agreement but economic revival.

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Greece is already in critical condition and Monday’s agreement will only make things worse. Years of austerity and depression have poisoned Greek politics, idled more than one in four of its workers (and nearly two in three of its young people) and torn holes in its social safety net.
These sacrifices have choked off investment and squandered human resources. Experts say there is little chance that further sacrifices will revive Greece’s economy or make its debt burden more sustainable. Yet that is just what the European Commission, European Central Bank and International Monetary Fund have again insisted on. Greece’s prime minister, Antonis Samaras, felt he had no choice but to accept. He agreed to cut public-sector paychecks and eliminate 15,000 Civil Service jobs — not by attrition, but by dismissing the current jobholders.
Greece’s Civil Service is bloated, patronage-ridden and inefficient, and it clearly needs reform as part of a broader program of economic renewal and revival. But throwing thousands more out of work when the unemployment rate is 27 percent is not a promising path to real reform, especially when done on the orders of foreign bankers. The last such round of public-sector cuts, in June, which shut down the state broadcasting system, badly backfired and nearly shattered Mr. Samaras’s fragile governing coalition.
Monday’s agreement also calls for a staggered payment schedule that will allow the lenders to suspend bailout payments if Greece has not met its job-cutting commitments by July 19.
In brief, the more implausible austerity becomes as an economic remedy, the more unchallengeable it seems to become as a political mantra. Its most consistent advocate, Chancellor Angela Merkel of Germany, is up for re-election this September. She is unlikely to change her tune — which is popular among German taxpayers — before that. Nor is she likely to change it if she wins another term.
Other lenders like the International Monetary Fund seem more troubled by evidence that austerity has done real damage to the Greek economy. But that realization has, so far, brought no change in policy and no relief to suffering Greeks.

Noahpinion: What does it even mean to "believe" something?

Noahpinion: What does it even mean to "believe" something?: I've done three posts recently that dealt with the issue of "beliefs". First I talked about "derp" , which I defin...

Many years ago I struck out "believe" from my vocabulary.Why? Because I came to the conclusion that one believes what one desires not what one knows. At best, one believes a theory that is not yet proven, i.e. the Laffer curve or that humans are subject to a second judgement. 

Tuesday, June 25, 2013

Γιάννης Βαρουφάκης, άντε και James Galbraith, στην ΝΥΤ

Πολύ  χαζο-χαρούμενο op-ed απο τους δύο καθηγητές  στην ΝΥΤ με τίτλο: "Μόνο ο ΣΥΡΙΖΑ μπορεί να σώσει την Ελλάδα".... άν είναι διανοητό(sic)!!!!!!
Indeed, right now, Syriza may be Europe’s best hope. Greeks neither want to leave the euro nor see the euro zone disintegrate, an eventuality likely to bring down the European Union.
Δηλαδή, εν χορώ οι υπόλοιποι 16 της ΕΖ (η Μέρκελ κρατάει την μπακέτα): " Μή, άχ μή, μή φεύγετε, θα διαλύσουμε χωρίς την Ελλάδα, θα σας δώσουμε όσα ζητάτε και ακόμη παρα πάνω: καθήστε κ.Τσίπρα, θα τα βρούμε: μή μας το κάνετε αυτό: μας καταστρέφετε: μήηηηηη!"

Monday, June 17, 2013

Προσωρινή Διαταγή του Προέδρου του ΣτΕ

h/t to Protagon και Γιώργο Καρελιά

Βάσει των διατάξεων του άρθρου 52 του Π.∆/τος 18/1989 (Α 8), όπως
αντικαταστάθηκε µε τις διατάξεις του άρθρου 35 του ν. 2721/1999 (Α 112) και
΄Εχοντας υπόψη
α) Την υπ’ αριθ. ΟΙΚ.02/11.6.2013 απόφαση του Υπουργού στον Πρωθυπουργό και
του Υπουργού Οικονοµικών «Κατάργηση της δηµόσιας επιχείρησης «Ελληνική
Ραδιοφωνία – Τηλεόραση, Ανώνυµη Εταιρεία (ΕΡΤ – Α.Ε.)» (Β 1414), µε το άρθρο 1
παρ. 2 της οποίας, ορίζεται, πλην άλλων, ότι διακόπτεται η µετάδοση
ραδιοτηλεοπτικών εκποµπών και η λειτουργία διαδικτυακών ιστοτόπων της ΕΡΤ
Α.Ε., µε αποτέλεσµα να µην επιτελείται η προβλεπόµενη από τις διατάξεις του
άρθρου 2 παρ. 1 του ν. 1730/1987 (Α 145), όπως τροποποιήθηκε µε το άρθρο 19
παρ. 1 του ν. 1866/1989 (Α 222) συµβολή δηµόσιου ραδιοτηλεοπτικού φορέα στην
ενηµέρωση, στη µόρφωση και στην ψυχαγωγία του ελληνικού λαού και της
β) Tην από 12.6.2013 αίτηση αναστολής της «Πανελλήνιας Οµοσπονδίας Συλλόγων
Προσωπικού Επιχειρήσεων Ραδιοφωνίας – Τηλεόρασης» (ΠΟΣΠΕΡΤ) και του
Παναγιώτη Καλφαγιάννη, Προέδρου του ∆ιοικητικού Συµβουλίου της ΠΟΣΠΕΡΤ.
γ) Tις απόψεις των πληρεξουσίων των αιτούντων και των εκπροσώπων του
∆ηµοσίου, τις οποίες εξέθεσαν προφορικώς.
∆ ι α τ ά σ σ ο υ µ ε
1. Την αναστολή της εκτέλεσης της προσβαλλόµενης υπ’ αριθ. ΟΙΚ.02/11.6.2013
Κοινής Υπουργικής Απόφασης αποκλειστικά ως προς το µέρος της, µε το οποίο
προβλέπεται α) ότι διακόπτεται η µετάδοση ραδιοτηλεοπτικών εκποµπών και η
λειτουργία διαδικτυακών ιστοτόπων της ΕΡΤ Α.Ε., και β) ότι οι συχνότητες της ΕΡΤ
Α.Ε. παραµένουν ανενεργές (άρθρο 2 παρ. 2 περ. β της παραπάνω Κ.Υ.Α.).
2. Τη λήψη από τους συναρµόδιους Υπουργό Οικονοµικών και Υφυπουργό στον
Πρωθυπουργό των αναγκαίων οργανωτικών µέτρων για τη συνέχιση της µετάδοσηςραδιοτηλεοπτικών εκποµπών και τη λειτουργία διαδικτυακών ιστοτόπων από
δηµόσιο ραδιοτηλεοπτικό φορέα για το χρονικό διάστηµα έως τη σύσταση και
λειτουργία νέου φορέα που θα υπηρετεί το δηµόσιο συµφέρον, όπως προβλέπεται
από την παρ. 2 του άρθρου 1 της υπ’ αριθ. ΟΙΚ.02/11.6.2013 Κοινής Υπουργικής
Αθήνα, 17 Ιουνίου 2013

Sunday, June 16, 2013

Noah Smith on the definition of derp

Noahpinion: What is "derp"? The answer is technical.: There has been much discussion lately concerning the word "derp" and its appropriate usage. For example, Josh Barro used the wor...

Saturday, June 15, 2013

Gerard Batten, UKIP MEP at the BBC/WorldService/Politics Europe, today

Mr Batten used said that The Troika Programme was "to save the Euro, not Greece". This phrase is being used with increasing frequency lately, especially since the publication of the IMF evaluation report.
What does it really mean, though?
One possible meaning is that it is possible to save the Euro and let Greece declare default at a "convenient" time.
Hm... a rather week working assumption!
Would the honourable gentleman care to elaborate/comment?

Thursday, June 13, 2013

mainly macro: How a Greek drama became a global tragedy

mainly macro: How a Greek drama became a global tragedy: Maybe that title is too strong, but there is an arguable case that what happened to Greece in 2010 was crucial in the move to austerity no...

must re-read!

Wednesday, June 5, 2013

IMF Report on Greece : June 2013

The Fund published its report on Greece (pdf) and P. Krugman comments on it .
The troika plan was clearly not realistic — and just about all of us on the Keynesian side were warning, loudly
e.g. listen to what Martin Wolf said to Charlie Rose back in May 2010.

Dean Baker names names in a recent column.

Another good take of the report is Neil Irwin 's column at the Washington Post -Wonkblog. He quotes from the report:
“Market confidence was not restored, the banking system lost 30 percent of its deposits, and the economy encountered a much-deeper-than-expected recession with exceptionally high unemployment.” Public debt remained too high, Greece waited too long to restructure its debt, and “structural reforms stalled and productivity gains proved elusive.”

Karl Whelan at Forbes says:
Congratulations to the IMF staff on a well-written and clear report.  I’ll come back later with more discussion of the lessons learned but for now I encourage everyone to read the report. 

PawelMorski (pseudonym) says: Hindsight is always 20:20 for sure. (don't fail to check it out).
Spiegel comments

Megan Greene at Bloomberg/Opinion

Tuesday, June 4, 2013

Unrepentant Economists by Robert Skidelsky - Project Syndicate

Unrepentant Economists by Robert Skidelsky - Project Syndicate
Noteworthy column! via Brad DeLong
Although an ex student of Marcus Miller myself, I am enticed to side with The Times letter because there are more Nobel Laureates than in the FT letter!
I am kidding

Friday, May 31, 2013

Report on Money Laundering in Cyprus

Outi Keranen on "Managing the (EZ) Crisis Through Secrecy

P. Krugman and G. Papandreou V N. Gingrich and A. Laffer

My preferred duo won  the Munk debate. The motion was:
Be it resolved, tax the rich (more)…
For P Krugman's presentation check here 

iAGS 2013 is titled Failed Austerity in Europe: The Way Out

The report was commissioned by the S&D Group in the European Parliament and prepared by three economic institutes: the OFCE (Paris); the IMK (Düsseldorf) and the ECLM (Copenhagen).

My annotation of the Executive Summary
The euro area suffered primarily from a balance of payments crisis due to the build-up of current account imbalances between its members. 
I would argue that that was the root of the EZ crisis, and fully agree with  the authors who refer to
a fallacious diagnosis according to which the crisis stems from the fiscal profligacy of member states
 If Greece and, to a lesser extent, Portugal are guilty of fiscal profligacy does not change the core argument. Greece is a very special case.
The sustainability of public debt is a major concern for national governments, the European Commission and financial markets, but successive and unprecedented consolidation programmes have proven unsuccessful in tackling this issue.
I am not quite happy with that. The sustainability of public debt is definitely NOT the  issue of the consolidation programmes of all EZ members. The issue is, at least in the short-to-medium-term, to bring down annual deficits to the level of 3% of GDP as provided for by the Growth and Stability Pact. It was an issue for the countries under "troika" loan support.

During normal times, sustainability of public debt is a long-term issue, whereas unemployment and growth are short-term ones. Yet, fearing an alleged imminent surge in interest rates and constrained by the Stability and Growth Pact, and although transition towards more normal times had not been completed, member states and the European Commission reversed priorities. 
This is somewhat odd. What do the authors suggest is that governments made their priorities to increase unemployment and depress growth.

They go on with this
But it is equally reflecting a dogmatic view in which fiscal policy is incapable of demand management
One can accuse the ECB, Commission, Eurogroup, IMF, and also national governments of many things but not that they are dogmatic neo-liberals.

As I assume the report itself is similarly slanted... so I will pass it by.

Friday, May 24, 2013

Michael Pettis thinks that.....

in Spain you are not really supposed to talk about abandoning the euro if you want to be taken seriously

His take of the recent "good"news about the Eurozone is that
 the debt-burdened countries of peripheral Europe are going to suffer a decade of weak growth, high unemployment, and contentious politics, all the while the debt growing faster than the economy. 

Matina Stevis dissects IMF's “Sovereign Debt Restructuring — Recent Developments and Implications for the Fund’s Legal and Policy Framework,”

and she does a great job. She sees  a future dissociation of the IMF from the euro zone.
Reading her column makes reading the IMF paper redundant

Barry Eichengreen interview for Cleveland FED

Wednesday, May 22, 2013

Ο Christopher T. Mahoney συμφωνεί με Π. Λαφαζάνη

Ο τ.Αντιπρόεδρος της Moody's θεωρεί ότι As long as the troika persist in their deflation policies, there is no hope for growth for Southern Europe. Επο πλέον,
Why have a prolonged depression prior to D-Day, if D-Day is inevitable? Right now the most important question is whether there is any hope of negotiating an orderly exit with the troika, including transitional financial assistance.

Χμ... ενδιαφέρουσα άποψη! 

Thursday, May 16, 2013

Paul Krugman: How the Case for Austerity Has Crumbled

Arguably the definitive answer to the austerians by you-know-who in The New York Review of Books
He takes the opp of a post by Noah Smith, a young economist buck of note who bloggs at Noahpinion to come back to the subject, and use yet another new angle.

Friday, April 26, 2013

Hans-Werner Sinn on the EZ

To exit or not to exit.
Hans-Werner Sinn takes on Soros and thinks that Soros is playing with fire. His arguments are clear and supported by the latest EEAG Report (pdf) , especially Chapter 2 

Thursday, April 25, 2013

Quote of the day/month/year/century/millennium ?

Henry Farrell on Social Democracy in Italy and elsewhere

Henry Farrell at aeon ( via CrookedTimber ) observes that
Governments now answer to business, not voters. Mainstream parties grow ever harder to distinguish. Is democracy dead?

Hm... well worth a re-read! 

Jonathan Portes advises on Which Economists we should listen to

Well, I for one, read Jonathan Portes at his blog: NotTheTreasuryView but also at the excellent new site pieria .
What he suggests is
that policymakers and the public should listen to economists who fulfill two criteria: first, they have made empirically testable predictions (conditional or unconditional - see Krugman here) that have proved, by and large, to be broadly consistent with the data; and second, they base those predictions on an analytic framework (not necessarily a formal model) that is persuasive.

SS. For exactly the same two criteria J.Portes proposes, I am not that keen on reading our Yiannis Varoufakis, who contributes at pieria. You see, I have a third criterion, i.e. brevity.

Friday, April 19, 2013

"Debt must be paid back"

Frances Coppola rightly says: "Don't be daft"!
Well, actually, what she says is this:
The reality is that governments do not have to pay all their debt off in one year - in fact most governments pay off little or no debt. What they have to do is service the debt.  
(emphasis added)
I would go further and note that this, in general, applies to corporations as well. Only individuals must pay back debts. (ss. even that last statement is not totally correct !)

Thursday, April 11, 2013

Παράλληλο Νόμισμα και EURO

hm!.. interesting, really!
 Wolfgang Richter, Carlos Abadi & Rafael de Arce Borda  have done some serious head scratching having decided that current policies of EE-Eurogroup-ECB are a scenario which in neither optimal nor realistic.
They propose a temporary regime of parallel currencies for the Euro-Perifery.

Wednesday, April 10, 2013

Tsipras gives interviews here, there, and everywhere

His last interview was at SKAI TV, here
Most analysts/commentators do not bother to draw conclusions from them. One exception is Mark Weisbrot who attended Tsipras 's presentation and interview at Columbia Univ. in February.
It seems that  Weisbrot was "taken" by young Alexis
Unlike most of the eurozone’s leaders, he knows what is wrong with Greece and the eurozone, and so does his party: austerity.  “We have become the guinea pig for barbaric, violent neoliberal policies,”
He naturally draws the one conclusion one can make heeding to Tsipras sayings:
What is the alternative, if Greeks refuse to submit to the “barbaric, violent, neoliberal” experiment any longer?  Clearly it would involve exiting the euro, and re-negotiating the Greek debt. 
Well, I am not so sure about the second part of his conclusion, the re-negotiating bit, but I am totally in tune with the first part. What other conclusion can anyone draw?
Mark Weisbrot goes on and argues for grexit, but acknowledges
But economic reality is one thing, and political reality is another.  Tsipras and the Syriza party don’t propose leaving the euro, and I would not criticize them for that.  A political party cannot move too far ahead of the electorate, and it could be that the majority of the country is not ready to get rid of the euro.  A government that decided to go that route would want strong backing from the public, and the ability, leadership, and expertise to do it right, so as to minimize the initial damage.