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by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 2nd, 2012 at 03:31:45 AM EST


There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 03:47:00 AM EST
[ Parent ]


It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri Mar 2nd, 2012 at 03:52:19 AM EST
[ Parent ]


There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:10:30 AM EST
[ Parent ]
by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Mar 2nd, 2012 at 09:18:39 AM EST
[ Parent ]


There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 09:29:29 AM EST
[ Parent ]
I wonder if there is an "edge of the earth" image from the renaissance? Or are they all recent, based on the assumption that 15th century people actually thought that the world was flat...
by asdf on Fri Mar 2nd, 2012 at 01:47:16 PM EST
[ Parent ]
You mean like this?

(Although that may be a little too cheerful and dynamic, considering.)

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Mar 2nd, 2012 at 01:52:31 PM EST
[ Parent ]
Yeah. Like that. Who made that one, and when?
by asdf on Fri Mar 2nd, 2012 at 02:42:55 PM EST
[ Parent ]
Cross-posting from today's Salon
El Pais: Europa se obceca con la austeridad
Merkel insiste en que hay que firmar el Tratado fiscal antes de poder generar crecimiento

Europa ha jugado este jueves a las grandes palabras en una cumbre que servirá para consagrar la austeridad en los tratados y que viene a ilegalizar el keynesianismo, con la imposición de prohibir los déficits en las constituciones. Hasta aquí los hechos. Todo lo demás es retórica: los mandatarios europeos se han empeñado en un cambio de tono para tratar de convencer a la ciudadanía -y puede que a los mercados--de que los recortes no son la única obsesión en una eurozona muy maltratada por la crisis fiscal, pero que también va de cabeza hacia una recaída en la recesión.

"Lo primero que hay que hacer es firmar el tratado fiscal. Lo segundo es ver cómo generar crecimiento", ha dicho la canciller alemana, Angela Merkel. Ese es el orden. Y "lo segundo" queda para más adelante: el Eurogrupo previo a la reunión de jefes de Estado y de Gobierno ha pospuesto una vez más la entrega del dinero del rescate para Grecia y su crisis interminable, y apenas ha debatido el llamamiento de España a flexibilizar los objetivos de déficit para evitar que el exceso de tijera acabe en un descosido para algunos países.

Europe's dogged pursuit of austerity
Merkel insists on the need to sign the Fiscal Treaty before being able to generate growth

Europa has played the big-word game this Thursday in a Summit which will serve to consacrate austerity in the treaties and to outlaw Keynesianism, with the imposition of constitutional deficit bans. Those are the facts, the rest is rhetoric: European rulers went to pains to change their tone to try to convince the citizenry ---and maybe the markets--- that cuts are not the only obsession in a Eurozone battered by the fiscal crisis, but which is also diving head first into a renewed recession.

"The first think that must be done is to sign the fiscal treaty. The second is to see how to generate growth", said the German Chancellor, Angela Merkel. That's the sequence. And "the second" is left for later: the Eurogroup before the summit of heads of stete and government has postponed once more the disbursement of the rescue moneys for Greece and its neverending crisis, and has barely debated Spain's plea to make the deficit goals more flexible to prevent a scissor abuse ending up leaving some countries naked.

It is hard to translate "obcecarse". It means obsession to the point of losing the ability to think. Apposite English metaphors include "tunnel vision".

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 03:40:56 AM EST
And Sweden is not even in the euro, but I guess our conservative government is always in favor of cutting the welfare state.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES!
by A swedish kind of death on Fri Mar 2nd, 2012 at 03:48:10 AM EST
[Rajoy] got a hostile response to [his and Guindos'] request to loosen the deficit target. The EU is just about to implement an auto-pilot fiscal pact, and is absolutely determined to stick to the target that everybody gets their public sector deficit down to 3% in 2013.That sentiment was summarised by the prime ministers of Sweden and Finland. El Pais quotes Frederik Reinfeldt as saying that the first to do after agreeing new budget rules cannot be to soften them." Jurki Katainen also said it would be "completely wrong" to expand the scope to reduce the deficit. So essentially, the eurozone follows a position that everybody knows is unfeasible, for fear of losing credibility. Nobody in Brussels wants to own to the fact that austerity is not working.


There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 03:53:02 AM EST
[ Parent ]
This is from two days after the last General Election which Rajoy won:
ElPais.com: Rajoy pide a Merkel que la UE ayude a España por ser un país que cumple
El primer día tras su arrolladora victoria hizo lo mismo que la semana anterior: se escondió en su despacho, ofreció un discurso cerrado a sus dirigentes sin aclarar casi nada, evitó comparecer en rueda de prensa --pese a que muchos corresponsales habían ido a Génova convencidos de que hablaría-- y mandó en su lugar a Dolores de Cospedal, la secretaria general y presidenta de Castilla-La Mancha. Como si fuera un lunes más. "¿Quién es esta mujer?", preguntaban algunos enviados especiales de televisiones internacionales para cubrir las elecciones.

...

"Rajoy le ha manifestado la necesidad de que los países que cumplan tienen que ser ayudados por las instituciones comunitarias. Le ha explicado que no todos pueden tener el mismo tratamiento, los que cumplen y los que no lo hacen", sentenció Cospedal, sugiriendo así que España, que según Bruselas es de los que está cumpliendo con lo que se la ha pedido, debería estar entre esos países a los que el BCE ayude con sus compras.

...

"No vamos a hacer milagros y nunca los hemos prometido. La solución al problema de la deuda tiene que venir de una estrategia conjunta de la zona euro. Rajoy entiende que igual que España va a cumplir, tenemos que exigir que se nos reconozca ese cumplimiento. Lo que está claro es que España no puede seguir financiándose al 7%", remató.

Rajoy asks Merkel that the EU help Spain as it is a country that delivers
The first day aster his landslide victory he did the same as the week before: he hid in his office, offered a closed-door speech to his party leadership without clarifying anything, avoided appearing before a press conference - despite many correspondents coming to the party HQ convinced that he would speak - and sent in his stead Dolores de Cospedal, the party secretary general and regional president of Castilla-La Mancha. As on any other Monday. "Who's this woman?", asked some special envoys from international TV stations sent to cover the elections.

...

"Rajoy manifested [to Merkel] the need that countries which deliver have to be helped by the European institutions. He explained that not all can be treated the same, the ones that deliver and those which don't", asserted Cospedal, suggesting that Spain, which according to Brussels is fulfilling what was asked of it, should be among those countries that the BCE should aid with its purchases.

...

"We're not going to work miracles and we never promised them. The solution to the debt problem must come from a joint Eurozone strategy. Rajoy understands that just like Spain is going to deliver, we have to demand that this fulfillment be recognised. What's clear is that Spain cannot continue to finance itself at 7%, she concluded.

Spain has, by the way, already implemented the fiscal treaty. The Constitutional Debt Brake is in place since September with bipartisan PSOE-PP support, including a statement that debt repayment takes priority over all other government expenses (which should make Hans-Werner Sinn happy). Among the first reforms undertaken by Rajoy has been the balanced budget law and zero-deficit target (this time with the PP parliamentary supermajority and fine whine from the PSOE). Also, a gutting labour reform has been introduced.

Spain is where Greece was two years ago: the previous year's deficit was revised upwards to everyone's shock, there are allegations that the figure was manipulated to look larger than in actually was (as in Greece). The difference is that now the Eurogroup doesn't even pay lip service to "helping out".

In other news, the moron Juncker is being replaced by the other moron van Rompuy.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:02:34 AM EST
[ Parent ]
More Eurointelligence:
If Spain were to stick to the target, it would need to make a fiscal adjustment of 4.4% this year, and a further 1.1% in 2013, plus further adjustment as the economy will weaken during that period. As the country is already in a recession, exacerbated by private and public sector deleveraging, such a massive public sector retrenchment would land Spain in a depression. Spain is now where Greece was about two years ago.


There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:32:35 AM EST
[ Parent ]
El Pais: El paro registrado sube en 112.269 personas en su peor febrero en tres años
La recaída en la recesión de la economía española sigue pasando factura al empleo. Según los datos de paro registrado que hoy ha publicado el Ministerio de Empleo, el número de desempleados aumentó en este mes en 112.269 personas, lo que representa su peor febrero desde 2009, el que hasta ahora es el año más dramático para el mercado laboral español en toda la serie histórica reciente (que arranca en 1997). Por el lado del empleo, la afiliación a la Seguridad Social cae en 49.710 personas, con lo que también marca su peor fenrero en tres años, y deja el total de inscritos en el sistema en 16,8 millones.
Registered unemployment rises by 112.269 people in its worst February in 3 years
The Spanish economy's double-dip recession continues to take a toll on employment. According to data on registered unemployment published today by the Ministry of Employment, the number of unemployed rose this month by 112.269 people, representing the worst february since 2009, which so far is the most dramatic year for the spanish job market in the recent historical series (starting in 1997). On the side of employment, registration with Social Security fell by 49.710 personas, which is also the worst February in 3 years, and leaves the number of people registered in the system at 16,8 millon.


There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 06:17:44 AM EST
[ Parent ]
Irish unemployment is slightly down. Probably due to emigration.
by Colman (colman at eurotrib.com) on Fri Mar 2nd, 2012 at 06:22:15 AM EST
[ Parent ]
Greek migration to Sweden is up.

The migration to the core has begun, left parties better get started organising the migrants to vote in local elections, because the anti-immigrant parties will waste no time.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES!

by A swedish kind of death on Fri Mar 2nd, 2012 at 06:40:15 AM EST
[ Parent ]
Fact: the Nordic countries do not have the economic resources to handle a large number of immigrants.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Fri Mar 2nd, 2012 at 02:40:55 PM EST
[ Parent ]
Define "large." Define "handle."

If 10 % of the Greek population emigrates, and it distributes proportionally among the Northern half of the EU, Scandinavia plus Finland is going to get about 1 % of the current Greek population, or on the order of 50 thousand people.

This does not strike me as insurmountable.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 2nd, 2012 at 02:59:41 PM EST
[ Parent ]
If 10 % of the Greek population emigrates, and it distributes proportionally among the Northern half of the EU ...

Stop right there.

They won't.  

Immigrants don't spread-out like melted cheese on toast.  They will cluster.  They will continue to cluster until they break the infrastructure of the cluster point or a backlash of rejection - social to physical - from the indigenous population raises the threat level to slow, halt, and/or reverse immigration.

Realize this IS what happens and review the recent history of Malmö for a local and on-going example.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Mar 2nd, 2012 at 04:14:49 PM EST
[ Parent ]
I'd say we lack the economic system of full employment that creates the ability to handle a large number of immigrants. Plus the Nordic countries has together just a little more population then half of Spain.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES!
by A swedish kind of death on Fri Mar 2nd, 2012 at 03:05:11 PM EST
[ Parent ]
Tell our politicians that, as Sweden currently receives immigrants equal to 1% of our population, every year.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Mar 2nd, 2012 at 05:48:50 PM EST
[ Parent ]
Have to get them to understand that the immigration quantity affects Fitness Landscape quality, an insurmountable task.  (At least here in the US.)

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sat Mar 3rd, 2012 at 01:35:01 PM EST
[ Parent ]
If Spain were to stick to the target, it would need to make a fiscal adjustment of 4.4% this year, and a further 1.1% in 2013

No.  It.  Won't.

Fucking idiots think they can remove 4.4% of micro-economic activity and keep the level of micro-economic activity constant.  

FI think if they remove 4.4% of micro-economic activity they only reduce micro-economic activity by 4.4%.

Neither one is true, as we see from the "Greek Experience."  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Mar 2nd, 2012 at 02:19:38 PM EST
[ Parent ]
Greece is interesting in that the massive cuts to the budget outdo the drop in economic activity by a factor of 4 to 1, which speaks to the virtues of the black market.
by Upstate NY on Fri Mar 2nd, 2012 at 05:58:10 PM EST
[ Parent ]
Well, maybe.  But see this.

By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, "Who would trust a Greek bank?"

The situation at the macro level is, if anything, even more transformational. The Chinese have largely taken over Piraeus, Greece's main port, with an eye to make it a conduit for shipping goods into Europe. Qatar is looking to invest $5 billion in various projects in Greece, including tourism infrastructure. Other, relatively flush Europeans are trying to make "Greece the Florida of Europe," Theodore Pelagidis, a Greek economist at the University of Piraeus, told me, referring in particular to plans to turn islands into expensive retirement homes for wealthy people from other parts of the continent. Whether or not the country pays its debts, he went on, other nations and foreign companies "now understand the Greek government is powerless, so in the future they will take over viable assets and run parts of the country by themselves."  

And on and on and on.

For Greeks the Greek economy has become a Negative Sum Game, a Greek can only win if another Greek loses.  For sufficiently well-capitalized outsiders it's a Positive Sum Game: they can't lose.  Looking only at the econometrics and in the short term I grant this is a wash.  Looking further, it's a disaster for Greece because it is literally selling the Greek future both the 'hardware,' e.g.,port of Piraeus, but, more importantly, the 'software,' the 20,000 people trying to immigrate because within those people are the Greek Creative Class and the Greek Educated Class without which Greece cannot create 'A Future.'

   

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sat Mar 3rd, 2012 at 12:56:23 PM EST
[ Parent ]
Yes, I know this all too well, but I think when your budget is cut by 34%, your economy should likely fall by more than the 15% it's fallen.
by Upstate NY on Sat Mar 3rd, 2012 at 02:53:23 PM EST
[ Parent ]
Supposing the government budget is something like 25% of GDP, a 35% cut in the budget is an 8% of GDP reduction in the budget. That's not inconsistent with a 15% drop in GDP.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 02:56:58 PM EST
[ Parent ]
Eurostat has tax revenues at 39.5% of GDP, so assuming the gov't is spending more than revenues collected (which I believe is the case) then expenditures should be above 40%.

Isn't always the case with Greece that conversations go astray because almost no one wants to bring up statistics and discuss them. This is most likely the fault of the Greeks, but it's a strange world in which any deliberation is based on anecdotes or guesswork.

by Upstate NY on Sat Mar 3rd, 2012 at 08:59:35 PM EST
[ Parent ]
But France is not Spain is not Portugal is not Italy is not Ireland is not Greece.

... and when they came for me there was nobody left to speak out.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 2nd, 2012 at 04:45:07 AM EST
[ Parent ]
This is still not Rajoy's Niemöller moment, as he's signed the treaty yesterday (unlike the UK and Czech Republic) and The [Spanish] Council of Ministers will today approve the spending ceiling law.

By the time he wakes up to the reality of the situation all he will be able to say is "my God, what have I done?" - if he's indeed able to compose such a thought.

In the meantime PP accuses Socialists of fomenting student violence amid "climate of conflict" and they're not even hiding the fact that it's naked spin

Miembros del Gobierno reconocen que pretenden inutilizar a los socialistas como voz de denuncia ante los planes y los ajustes del Gabinete de Rajoy
Members fo the Government admit that they intend to disable the socialists as a voice of denunciation against Rajoy's government's plans and adjustments
Luckily for everyone, Público, the major newspaper to the left of El Pais, is bankrupt and closing down its print edition. So, the print press is entirely right-wing or social liberal (I'm referring to El Pais' seriousness). Only a free commuter newspaper, 20 Minutos, remains on the "left", but it faces strong competition from two other papers.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:55:15 AM EST
[ Parent ]
Público, the major newspaper to the left of El Pais, is bankrupt and closing down its print edition.

How apposite, and what fearful symmetry!

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Mar 2nd, 2012 at 09:56:15 AM EST
[ Parent ]
Ditto for the only major national newspaper in Greece to the left of the socialists and anti-troika, Eleftherotypia. It has gone bankrupt, the workers are publishing a strike editions every 15 days or so and it seems that if the newspaper is bought it will be moving much to the right...

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Fri Mar 2nd, 2012 at 10:07:47 AM EST
[ Parent ]
Il Fatto Quotidiano - Wikipedia, the free encyclopedia

The intention of publishing a new national newspaper was announced by Marco Travaglio on his blog, voglioscendere.it on 1 June 2009.[3] The title il Fatto Quotidiano was chosen as a homage to journalist Enzo Biagi,[3] who was purged from state television RAI at prime minister Silvio Berlusconi's request, and whose daily ten-minute prime-time news commentary on Rai Uno, named Il Fatto, was removed from programming. The newspaper could not just be named "Il Fatto" because RAI, the italian public broadcast vetoed it mentioning name ownership, even if its very management was the one who put it off the air.

In June 2009, l'Antefatto,[4] a promotional website, was set up containing information about subscription and the development of the project.[3]

The publisher stated he would not use the Italian state advertising and funding to run the newspaper, for which a newspaper needs support from at least some MPs, but instead he would use only money from sales and market advertisements.[3]

The first issue, printed in 100,000 copies in addition to 32,000 subscriptions, was already sold out before 8:00 AM on 23 September, even though distribution was limited to the largest cities. As a consequence, the newspaper announced it would immediately double the number of copies and publish the first issue, free of charge, on the Internet.[5][6]

113,000 (70,000 copies sold daily, plus 43,000 subscriptions - 25 December 2009)

it's good quality too, pity no english version yet.


"I would rather have questions that can't be answered than answers that can't be questioned." - Richard Feynman

by melo (melometa4(at)gmail.com) on Fri Mar 2nd, 2012 at 01:13:46 PM EST
[ Parent ]
Excellent stock ownership policy also. Sort of an Italian ESOP.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Mar 2nd, 2012 at 03:28:03 PM EST
[ Parent ]
When do you predict protests will amp to rioting and insurrection?  By the end of this year or sometime in 2013?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Fri Mar 2nd, 2012 at 02:10:29 PM EST
[ Parent ]
If you model Spain as Greece minus 12-18 months you will probably end up in the right ballpark.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 2nd, 2012 at 03:02:36 PM EST
[ Parent ]
Define rioting and insurrection.

I'm personally more concerned about a general descent into insecurity and day-to-day violence and criminality.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:55:20 PM EST
[ Parent ]
Like the riots in England last year: they were aimless violence and criminality.
by Katrin on Fri Mar 2nd, 2012 at 05:03:44 PM EST
[ Parent ]
In Greece, there are hardly any police left who can report the huge surge in crime. Then we hear great stories about Greeks venturing back to the villages. Not much mention about how life is unlivable for many. I hear it all the time from relatives, some of whom have abandoned nicely appointed & furnished condos (which they have owned for decades) in Central Athens (Gyzi and Pangrati) for tiny spartan unfurnished basement apartments (rentals) in safer Glyfada.  
by Upstate NY on Fri Mar 2nd, 2012 at 06:03:16 PM EST
[ Parent ]
I liked having Juncker head the Eurogroup. It made me happy to hear someone who heads an international money-laundering operation lecture others about virtuous behavior.
by Upstate NY on Fri Mar 2nd, 2012 at 05:55:44 PM EST
[ Parent ]
(also from Eurointelligence)

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:18:24 AM EST
[ Parent ]
What was the deficit limit of the previous fiscal pact?

Or am I not allowed to ask that question?

by Upstate NY on Fri Mar 2nd, 2012 at 05:52:51 PM EST
[ Parent ]
Are you referring to the Maastricht 3% ?

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 05:55:23 PM EST
[ Parent ]
Yes, I'm just making stupid jokes. I find it ironic that Germany blew through the Maastricht ceiling and on the day that countries are signing a new pact, some countries (the Netherlands and Spain) are asking for derogations upward.

In fact, to test the viability of this new pact, everyone should instantly adhere to the letter of the law, or otherwise admit there is a defect in the pact.

by Upstate NY on Fri Mar 2nd, 2012 at 06:05:08 PM EST
[ Parent ]
If anyone wonders why Sweden is in the fiscal pact in spite of not being in the EMU, the answer is that not being a part would make us look Unserious. No, I'm not kidding, that's what they're saying.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Mar 2nd, 2012 at 05:47:09 PM EST
[ Parent ]
Private money flees Portugal | James Saft

(Reuters) - The most telling thing the ECB did on Wednesday's leap day wasn't the 530 billion euros in party favors they handed out to banks, but rather the paltry sum they were forced to commit to shoring up Portugal's government bond market.

... Portuguese borrowing rates have remained stubbornly high and on Wednesday spiked higher, with 10-year borrowing rates above 13 percent. That brought the ECB into the market to make its first purchases of government bonds in two weeks.

It may be that Portuguese banks are simply too weak to indulge in the government bond carry trade - after all they themselves have been unable to sell debt for two years. That being the case, there are simply no natural buyers of Portuguese risk left, save the ECB, and it may well be that the more the ECB buys the less anyone else will want to.

(h/t Eurointelligence)

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 2nd, 2012 at 04:10:40 AM EST
The collapse of the European Union is going to be spectacular.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:13:19 AM EST
[ Parent ]
Yup.

BTW, Krugman was in Portugal last week and totally made a fool of himself.
I wonder what the adjective for his story is.

by Euroliberal on Fri Mar 2nd, 2012 at 01:16:54 PM EST
[ Parent ]
What did he do?

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:53:23 PM EST
[ Parent ]
Well... he was invited over to receive some honorary degrees and everybody was expecting him to at least, be consistent with his anti-austerity message.
Just before he got a chance to talk, he was treated to a secret dinner with the PM and other neoliberal hawks and lo and behold he came out singing a different tune.
"Portugal is not Greece,,,,", "wages in Portugal must drop 30%-40% in comparison with Germany..."(that was lame on many different levels) ans as for policy: "I wouldn't have done any different..."

Buy him a dinner and he'll tell you anything you wanna hear!

by Euroliberal on Sat Mar 3rd, 2012 at 03:27:41 AM EST
[ Parent ]
Reality distortion field. You are just saying what the right wing media (we do not have any other) spinned.

Regarding salaries he said that if Germany does not inflate THEN the periphery as no other option other than deflate. but his preference would be for an increase in German salaries as opposed to Club-Med cuts.

by cagatacos on Sat Mar 3rd, 2012 at 06:09:08 AM EST
[ Parent ]
I do agree with you that the RW spin machine tried and managed to distort a lot of things but in this instance I did watch his interviews and IMO he lacked clarity and conviction.

The TINA attitude that since Germany is not willing to make the adjustments necessary to level the playing field, he proposes the only other alternative available is not coherent or principled stance.

by Euroliberal on Sat Mar 3rd, 2012 at 12:53:44 PM EST
[ Parent ]
The TINA attitude that since Germany is not willing to make the adjustments necessary to level the playing field, he proposes the only other alternative available is not coherent or principled stance.

Diary?

Are there videos or transcripts of the interviews?

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 02:26:49 PM EST
[ Parent ]
you really think this is going to bring down the EU without wrecking the global economy too?

what is it, 30T of CDS now resting on 'market confidence', and austerity, working to boost growth?

"I would rather have questions that can't be answered than answers that can't be questioned." - Richard Feynman

by melo (melometa4(at)gmail.com) on Fri Mar 2nd, 2012 at 01:28:12 PM EST
[ Parent ]
They may be counting on the US Federal Reserve to play "Global Central Banker."

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Fri Mar 2nd, 2012 at 02:24:39 PM EST
[ Parent ]
Some of the rest of the world is sane.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:54:04 PM EST
[ Parent ]
Eurointelligence Syndicated Column: The eurozone needs outside help to prepare for the worst By Leif Pagrotsky (02.03.2012)
Severe instability of the eurozone would hurt everybody, also outside the eurozone. I therefore suggest that non-euro or non-EU European countries and other stakeholders like IMF, Switzerland, Russia and China take the initiative to get this urgent process going by asking the independent and qualified staff of OECD, BIS or EBRD to start working on the scenario of a breakup  urgently. They need to analyse how the pain of a transition can be reduced, in individual countries and in the eurozone as a whole, how the financial system can avoid collapse in such dramatic times, and practical things around printing and issuing new money. They need to collect experiences that can be relevant from Ireland/UK and Czechoslovakia, Yugoslavia and the Soviet Union, where currency areas were reorganised.

We cannot afford the risk of an unlikely but possible chaotic dissolution of the euro taking decision-makers by surprise and thus aggravating an already dramatic situation. Preparations should be made now, and by credible outsiders.

I have respect for the risk that measures to prepare for trouble can become self-fulfilling. But years of avoiding the core, difficult questions have only led to a loss of credibility and a worsening of the crisis. We must now learn that lesson and let others step in, who are independent of prestige and vested interests.




There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:29:40 AM EST
Recall: Time for the Fed to Take Over the European Central Bank's Job by Dean Baker on November 28, 2011
The European Central Bank (ECB) has been working hard to convince the world that it is not competent to act as central bank. One of the main responsibilities of a central bank is to act as the lender of last resort in a crisis. The ECB is insisting that it will not fill this role. It is arguing instead that it would sooner see the eurozone collapse than risk inflation exceeding its 2.0 percent target.

...

Fortunately, the Fed has the tools needed to prevent this sort of meltdown. It can simply take the steps that the ECB has failed to do. First and most importantly it has to guarantee the sovereign debt of eurozone countries. The Fed simply has to commit to keep the interest rate yields on debt from rising above levels where it risks creates a self-perpetuating spiral of higher debt leading to higher interest rates, which in turn raises the deficit and debt.

...

Of course this sort of intervention will look horrible from the standpoint of the eurozone countries. It will appear as though they cannot be trusted to manage their own central bank and deal with their own economic affairs.



There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:31:43 AM EST
[ Parent ]
The current crop of 'leaders' obviously can be trusted to run their own affairs -- straight into the mountain at full throttle.  

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Mar 2nd, 2012 at 10:04:33 AM EST
[ Parent ]
Eurointelligence - The eurozone needs outside help to prepare for the worst
Leif Pagrotsky is a Labour MP in the Swedish Parliament, Former Minister of Industry and Trade and Vice Chairman of the Council of the Riksbank in Sweden.

And as Minister of Industry and Trade he was one of the most prominent social democrats against Sweden joining the EMU.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES!

by A swedish kind of death on Fri Mar 2nd, 2012 at 05:59:39 AM EST
[ Parent ]
More from Eurointelligence:
More About Jens Weidmann's request to securitise Germany's Target 2 balance

The entire Target 2 debate sounds very technical, but gets to the heart of the eurozone crisis. Jens Weidmann's proposal to securitise has led to hostile commentary in the press.

Reuters Breakingviews writes that Jens Weidmann is more dangerous to the ECB than Axel Weber. If Weidmann was not concerned about a breakup of the EU, he would not need to talk about securitising Germany's claims on the eurosytem - which would only ever fall foul if the euro were to break up suddenly. The proposal is to make peripheral central banks to hand over their own collateral to the central banks with Target 2 surpluses. "But it could go down like a lead balloon with the weaker central banks. Not only won't they like their credit-worthiness being questioned, they would struggle to find collateral to cover anything like the entire exposure."

(my emphasis)
Mark Schieritz makes an important in his commentary in Herdentrieb. He says the Bundesbank is effectively asking for a double collateral. If Greece were to leave, and were uncooperative, it would not deliver the securities it had promised. In either case, the Bundesbank's share of the claims would be lost. He says the only to avoid this is to carry the securities to Frankfurt, which would imply that you need to collateralise the surplus with gold holdings, which is hardly realistic.) If Greece, however, is co-operative, than the current system is perfectly adequate. He concludes that the Bundesbank must have come under massive public pressure through the Target 2, which has been raging in Germany.
See also yesterday's Salon.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:35:26 AM EST
Gold bugs. Insane, the lot of them.

Incidentally, the price of gold has never been higher. And central banks and the IMF/World Bank are buying right now. Gah!

Can we please apply some Raid to the gold bugs? They need to go away from the levers of economic planning.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 2nd, 2012 at 04:45:29 AM EST
[ Parent ]
The horror! There may be nothing that can prevent German banks and the German public from taking the loss that the behavior of the banks and government has brought about. Rest assured the loss will come in the form of a dagger in the back - or so people will be told.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Mar 2nd, 2012 at 10:08:25 AM EST
[ Parent ]
All the signs are that a strong faction of the German establishment (government + BuBa) are already planning for life after the Euro. They don't seem overly sorry to see it go either, indeed you can make the case that many of their statements and leaks have been attempts to intensify the crisis.

(I recall especially statements some time ago just before Spanish bond sales...)

by Metatone (metatone [a|t] gmail (dot) com) on Fri Mar 2nd, 2012 at 10:41:03 AM EST
[ Parent ]
I have been saying for many months that Germany is getting ready to exit the Euro.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:52:25 PM EST
[ Parent ]
Are they not factoring in the impact on their reputation in a post-euro world?
by Upstate NY on Fri Mar 2nd, 2012 at 06:16:16 PM EST
[ Parent ]
They view themselves as being in the right. Any slur on their reputation from breaking the Euro will be the work of evil foreigners seeking a nationalist narrative to justify their own fecklessness.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Mar 3rd, 2012 at 01:08:28 AM EST
[ Parent ]
Victors get to write History.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 02:46:36 AM EST
[ Parent ]
The problem though is that some history is like garlic. You think it's been digested, and then it comes right back up.
by Upstate NY on Sat Mar 3rd, 2012 at 09:17:36 AM EST
[ Parent ]
I mean, the euro has been around for a little over a decade. A blink of the eyes.
by Upstate NY on Sat Mar 3rd, 2012 at 09:18:23 AM EST
[ Parent ]
In other news, it's not going to pass in Ireland anyway:
However, Mr Kenny said the Anglo debt question was an entirely separate matter from the referendum on the treaty. "These are entirely separate matters, in other words, the Irish people are not going to be bribed by anybody," Mr Kenny told reporters in Brussels. "That work is entirely separate from the treaty, and in due course the Government will set out a process by which this will be set before the people."

If Enda can't work out a good package of bribes I don't think the odds are good for passing the referendum.

I recommend writing every voter a cheque for 10,000k. Cheap at the price, and a pretty good bit of stimulus for the economy. "Nice currency you got there, pity if it burned down."

by Colman (colman at eurotrib.com) on Fri Mar 2nd, 2012 at 05:58:57 AM EST
by Colman (colman at eurotrib.com) on Fri Mar 2nd, 2012 at 05:59:17 AM EST
[ Parent ]
All 17 countries in the euro  zone and eight other European Union member states signed the treaty, which mandates automatic corrections of deficits that stray from targets. It is due to take effect on January 1st, 2013.

...

"It's a strong signal that we've drawn lessons from the crisis," German chancellor Angela Merkel said before the signing ceremony.

Merkel will never understand what she's done to Europe.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 06:08:01 AM EST
[ Parent ]
No, she won't. She'd go to the firing squad wondering why everyone is so annoyed.
by Colman (colman at eurotrib.com) on Fri Mar 2nd, 2012 at 06:12:32 AM EST
[ Parent ]
The real question is why there is no opposition whatever Die Linke excepted. There is nothing pushing against her view.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri Mar 2nd, 2012 at 06:49:06 AM EST
[ Parent ]
Common Sense Conservatism.

Keynesian (Kaleckian, Minskian, Keenian...) economics is counter-intuitive. Plus, it's moralistically unsatisfying.

The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present. Yet the theory has powerful emotional appeal. Usually that appeal is strongest for conservatives, who can't stand the thought that positive action by governments (let alone--horrors!--printing money) can ever be a good idea. Some libertarians extol the Austrian theory, not because they have really thought that theory through, but because they feel the need for some prestigious alternative to the perceived statist implications of Keynesianism. And some people probably are attracted to Austrianism because they imagine that it devalues the intellectual pretensions of economics professors. But moderates and liberals are not immune to the theory's seductive charms--especially when it gives them a chance to lecture others on their failings.
Never mind that Hayek himself recanted even during stagflation which was the excuse used by ideologues to bury Keynes
The moment there is any sign that the total income stream may actually shrink, I should certainly not only try everything in my power to prevent it from dwindling, but I should announce beforehand that I would do so in the event the problem arose.... You ask whether I have changed my opinion about combating secondary deflation. I do not have to change my theoretical views.

As I explained before, I have always thought that deflation had no economic function; but I did once believe, and no longer do, that it was desirable because it could break the growing rigidity of wage rates.



There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 06:53:09 AM EST
[ Parent ]
BBC - Adam Curtis Blog

The Phillips Curve showed, Samuelson said, that if governments let unemployment rise then inflation would inevitably fall.  Unfortunately it didn't. In the 1970s both unemployment and inflation went rocketing up, and none of Samuelson's followers could explain why.

Milton Friedman said that the solution was simple. Governments should stop trying to manage their economies and other than controlling the money supply they should just let things rip. This became the cornerstone of Mrs Thatcher's policies in the 1980s, which culminated with the deregulation of the financial markets in the City of London in 1986 - which was called the Big Bang.

Unlike the cosmologists and their Big Bang, the free market economists still believed that this explosion would lead to a stable equilibrium.

They had a simplified, mathematical vision of human beings as creatures who logically analysed everything in the market, and then reacted as if they were computing machines. Few people at the time said that this might be an area that maths didn't really have anything to do with, and that the scope of equations like the Black-Scholes model - which made derivatives trading predictable - might be very limited.

no way! may the few become the many...

"I would rather have questions that can't be answered than answers that can't be questioned." - Richard Feynman

by melo (melometa4(at)gmail.com) on Fri Mar 2nd, 2012 at 07:25:07 AM EST
[ Parent ]
The Phillips Curve showed, Samuelson said, that if governments let unemployment rise then inflation would inevitably fall.  Unfortunately it didn't.

And unfortunately what got tarred was Keynes and not Hicks, Phillips or Samuelson.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 07:27:56 AM EST
[ Parent ]
So it was that the failure of bastard Keynesian economics got pinned on Keynes, not on the bastards. But that would be unfair to Phillips, who actually hydraulically modeled Keynes one macro equation, if only for a national economy, and even Hicks, who had previously disowned the equation of IS/LM to Keynesian economics.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Mar 2nd, 2012 at 10:18:32 AM EST
[ Parent ]
Economists are existential proof being able to manipulate mathematical symbols does not imply understanding of mathematics.  

The Anti-Turing Test, as it were.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Mar 2nd, 2012 at 02:56:13 PM EST
[ Parent ]
There is the entire German economic mainstream pushing for it, and, since (West) Germany is such an economic success story, who could possibly imagine they are wrong?
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 2nd, 2012 at 07:11:34 AM EST
[ Parent ]
Reuters could, apparently.

Insight: The dark side of Germany's jobs miracle

Wage restraint and labor market reforms have pushed the jobless rate down to a 20-year low, and the German model is often cited as an example for European nations seeking to cut unemployment and become more competitive.

But critics say the reforms that helped create jobs also broadened and entrenched the low-paid and temporary work sector, boosting wage inequality.

Labor office data show the low wage sector grew three times as fast as other employment in the five years to 2010, explaining why the "job miracle" has not prompted Germans to spend much more than they have in the past.



There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 07:13:05 AM EST
[ Parent ]
Reuters:
But critics say the reforms that helped create jobs also broadened and entrenched the low-paid and temporary work sector, boosting wage inequality.

Yes, critics do say that.

But they're not the German economic mainstream...

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 2nd, 2012 at 07:19:56 AM EST
[ Parent ]
However, assuming the critics are right, who is to say that the price may not be worth paying?
by oliver on Fri Mar 2nd, 2012 at 11:48:13 AM EST
[ Parent ]
For whom?
by Katrin on Fri Mar 2nd, 2012 at 12:02:05 PM EST
[ Parent ]
Well, for the top X% (50%? 10%? 1%? - name your own figure) in Germany - so far it's working out pretty well for them...
by Metatone (metatone [a|t] gmail (dot) com) on Fri Mar 2nd, 2012 at 12:12:13 PM EST
[ Parent ]
But they are not the ones who pay the price.
by Katrin on Fri Mar 2nd, 2012 at 12:49:37 PM EST
[ Parent ]
But unemployment has gone way down.
by oliver on Fri Mar 2nd, 2012 at 01:11:49 PM EST
[ Parent ]
Bringing down the unemployment rate is an advantage to the government which can claim success for its policies.

Meanwhile, the real situation of people with unstable job positions and insufficient pay (whether because of a low hourly rate or because of short hours, or both) is no improvement on being unemployed with benefit.

So, if it's "worth it", it's for the government and employers.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 2nd, 2012 at 01:19:51 PM EST
[ Parent ]
If it "worked" at all.

Kolumne: Thomas Fricke - Teuer, aber sexy | FTD.de Column: Thomas Fricke - Expensive, but sexy | FTD.de
er Haken dabei: Seit der Rezession 2009 sind die Kostenlasten gemessen am Umsatz wieder gestiegen - klammheimlich, aber eindrucksvoll. Und? Die Beschäftigung in Deutschland boomt trotzdem, selbst drei Jahre später noch und trotz zwischenzeitlichem Konjunktureinbruch. Gilt plötzlich: mehr Lohn, mehr Jobs? Oder sind die Lohnkosten am Ende gar nicht so wichtig, wie es uns die halbe Ökonomenschar jahrelang erklärt hat?he catch: Since the recession in 2009 the cost compared to sales has been increasing again - quietly, but impressively. And? Employment in Germany is booming even three years later and despite a temporal economic slump in between. Is the new rule higher wages more jobs? Or are the wage costs in the end not as important as half of the mob of economists told us for years?


Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und Wohlstand® kommen. - flatter
by generic on Fri Mar 2nd, 2012 at 01:32:15 PM EST
[ Parent ]
It's very often part-time, temporary, and low-paid work. And then there is a certain percentage of workers with full-time contracts and good wages. The first group is desperately trying not to be unemployed again, the second group is trying not to fall into the first group.
by Katrin on Fri Mar 2nd, 2012 at 01:30:04 PM EST
[ Parent ]
And perhaps even disagreement over what "good wages" actually are, in relation to the current world. There must be some reason why Fraport and Berlin's two airports keep getting shutdown.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri Mar 2nd, 2012 at 02:00:22 PM EST
[ Parent ]
Nope. It's an effect of a policy to destroy collective bargaining. We used to have labour agreements for whole areas and branches of trade. A strike would have hit where it hurts most, of course: the 0.5% of airport workers who can block the entire airport would have striked for ALL workers of the dozen or so of airports the agreement was for, including the cleaners. This gave the unions a wonderful lever.

This is no longer the case: these workers have now unions of their own and strike for a rise of their own group's pay, but nobody else's. This means more strikes of groups who have the potential to efficiently strike, but an advantage for only few workers.

by Katrin on Fri Mar 2nd, 2012 at 02:23:33 PM EST
[ Parent ]
Is it true that "minijobs" pay no social security contributions so the workers lack most of the entitlements usually associated with the German welfare state?

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:50:07 PM EST
[ Parent ]
Yes, that's true. There is no pension and no unemployment insurance with these jobs. Health care usually isn't the problem, because married people are insured in their partners' insurance, if they haven't got an income of their own. In short, 400 Euro jobs are attractive for housewives and perpetuate dependence of women.
by Katrin on Fri Mar 2nd, 2012 at 05:10:46 PM EST
[ Parent ]
If the goal is to bring down unemployment, te answer is simple enough. Just bring back government as the employer of last resort and remove central bank independence with its inflation target as that in reality means that when unemployment goes down, rates are increased in order to destroy enough economic activity to keep wages from rising.

Of course, if unemployment goes down due to jobs with proper wages, then employees will want wage increases as they are no longer afraid of unemployment. And wage increases might mean inflation.

However, who is to say that that price may not be worth paying?

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES!

by A swedish kind of death on Fri Mar 2nd, 2012 at 02:05:35 PM EST
[ Parent ]
And make sure that trade unions become strong, because otherwise workers will feel the inflation.
by Katrin on Fri Mar 2nd, 2012 at 02:27:59 PM EST
[ Parent ]
But unemployment has gone way down.

Wages and working conditions have no bearing on the level of unemployment. The level of unemployment is determined by the government's macroeconomic policy: Spend too little and you have unemployment, spend too much and you have unnecessary inflation. Wages and working conditions are purely a distributional question.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 2nd, 2012 at 03:12:49 PM EST
[ Parent ]
But the "level of unemployment" is a meaningless statistic until the questions, "employment at what level of compensation?" and "how does this wage level compare to the national Cost of Living?" are asked and answered.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sat Mar 3rd, 2012 at 01:24:30 PM EST
[ Parent ]
However, assuming the critics are right, who is to say that the price may not be worth paying?

This presupposes that there is a gain which could not have been otherwise obtained.

That is a fact not in evidence.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 2nd, 2012 at 03:09:17 PM EST
[ Parent ]
Governments tried breaking the upwards trend of unemployment since the 70ies. They failed, until the measures of the Schröder government.
by oliver on Sat Mar 3rd, 2012 at 03:27:06 PM EST
[ Parent ]
The business idea was to decrease domestic demand and to sell German products to Greeks instead. The Greeks couldn't pay, so they got loans. The Euro made that possible. The exporters profited from the sales, the banks profited from the loans, the Greek consumers profited, because their standard of living increased, German workers profited, because they were not unemployed, even though for many of them the income fell.

Now the Greeks still can't pay. The exporters don't mind as long as they find other customers. The banks don't mind as long as Merkel squeezes money out of the Greeks. The Greeks are suffering enormously, but that doesn't diminish their debts. So in the end German workers will have to "pay the price". It's our pensions, our complete social net that will pay the price. By the time my fellow-citizens notice that not only Greeks can be squeezed it will be too late.

by Katrin on Sat Mar 3rd, 2012 at 03:44:55 PM EST
[ Parent ]
Governments tried breaking the upwards trend of unemployment since the 70ies. They failed, until the measures of the Schröder government.

Untrue. Japan succeeded, when it deployed the full power of unrestrained fiscal policy in defense of employment.

The unwillingness to put the full power of the state planning apparatus behind the effort to eradicate deprivation should not be conflated with the impossibility of so doing.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 4th, 2012 at 02:25:35 PM EST
[ Parent ]
"I've had some people earning as little as 55 cents per hour," said Peter Huefken, the head of Stralsund's job agency, the first of its kind to sue employers for paying too little. He is encouraging other agencies to follow suit.

...

Data from the European Statistics Office suggests people in work in Germany are slightly less prone to poverty than their peers in the euro zone, but the risk has risen: 7.2 percent of workers were earning so little they were likely to experience poverty in 2010, versus 4.8 percent in 2005.

It is still lower than the euro zone average of 8.2 percent. But the number of so-called "working poor" has grown faster in Germany than in the currency bloc as a whole.



There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 02:54:36 AM EST
[ Parent ]
Fafblog! the whole world's only source for Fafblog.
"Now is there any new business," says Giblets.
"Well the boat's sinking," says me.
"Giblets seems to recall that coming up at the last meeting," says Giblets, "which would make that old business."
"Well it's more sinking-er than it was last time," says me. "That's kind of new."
"And under Old Business we agreed to form a Boat Sinking Committee to launch an investigation into the possibility of making a preliminary report on the subject of recommending the formal and official declaration of a Boat Sinking Committee," says Giblets.
"The Boat Sinking Committee has sunk," says me, "along with their half a the boat."
"Well that wraps up the old business!" says Giblets. "Who wants a grilled cheese!"
"The boat's also on fire," says me.
"Perfect," says Giblets. "The water from the sinking and the fire from the burning will cancel each other out, leaving us standing on dry land."
"I feel like there's something wrong with that but I can't put my finger on it," says me. "Because my finger would burn or drown."
"Next order of business!" says Giblets. "Should Giblets grill his grilled cheese on rye bread or cheddar cheese loaf?"
"See, I almost wonder if this isn't the time for grilled cheese," says me, "what with the burning and the sinking and all the fire coming out of the cheese grill."
"Cause cheese loaf is great by itself, but on a grilled cheese it might be overpowering," says Giblets.
"But I don't know whether to try to put out the fire or try to bail out the boat or scream and panic and scream," says me. "Come to think of it this is really the kind of discussion that calls for a Boat Burning Committee."


"I would rather have questions that can't be answered than answers that can't be questioned." - Richard Feynman
by melo (melometa4(at)gmail.com) on Fri Mar 2nd, 2012 at 06:54:21 AM EST
BINGO!

The house (EU) is burning down and TPTB are having an intense discussion about the plumbing.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Mar 2nd, 2012 at 03:04:23 PM EST
[ Parent ]
El Pais online front page (no link to story)
Directo | Rajoy: "El objetivo de déficit para 2012 será 5,8%"

El presidente desafía a Bruselas con un objetivo por encima de lo exigido.- "Vamos a cumplir con el techo de gasto la recomendación de déficit excesivo que nos hizo la UE", asegura el presidente, la "reducción del 1,5 anual en el déficit estructural"

Live | Rajoy: "The deficit goal for 2012 will be 5.8%"

The Prime Minister defies Brussels with a goal above what's demanded.- "We're going to meet with the spending ceiling the excessive deficit recommendation made by the EU", asserts the PM, the "reduction by an annual 1.5 of the structural deficit"

Apparently, they'll claim the rest of the deficit is "cyclical".

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 07:03:23 AM EST
You think you have troubles? It's going to make the Irish economy overheat in a few years:

But that's the mild bit. When the Department of Finance used the EU's method of estimating the `output gap' upon which the structural deficit is determined, they found a big big problem.

`Moreover, further out the forecast horizon, the production function methodology [the EU method] implies a positive output gap - that overheating pressures are emerging, which does not appear realistic.'

The Department used the EU method and found that the economy was overheating by 2015.  Overheating?!  Unemployment is estimated to be 12 percent, GDP has still to return to pre-recession levels, all the components of domestic demand (consumer spending, investment, etc.) are well, well below pre-crisis levels, we have more people - yet the EU says the economy will be overheating.

That's the actual government analysis.

by Colman (colman at eurotrib.com) on Fri Mar 2nd, 2012 at 08:31:53 AM EST
[ Parent ]
Are we talking about this?

European Commission Press Releases: Simulation technology could help prevent future financial crises (30 November 2009)

"This first class European research can help us make the move from the economics of pen and paper to the economics of super-computers," said Viviane Reding, EU Commissioner for Information Society and Media. " The results of this research project, will complement traditional economic statistics and assumptions about how economic actors react by enabling better testing of a policy's effects on people, while still on the drawing board. I expect government researchers and national research institutes will act quickly to put this tool at the disposal of decision- makers as soon as possible."

This simulation technology developed by EU-backed research uses computer-based experiments to focus on the relationship between large populations of different economic actors across many interconnected markets. It is the first time this technology is applied on such a big scale using high-powered computing. Each simulated household (or business, or bank) will make different decisions in reaction to various monetary, fiscal or pro-innovation policies including, for example, whether to remain in a job or seek a new one, how much of a wage is saved, spent or invested. This means that the impact of one policy in one market at one point in time is no longer assessed in isolation from other factors.

Traditional economics failed to predict the scale of the knock-on effect of the credit crunch on the world economy. The new software shows how banks react in different ways by looking at a wide range of factors like how much reserves they must keep compared to investments, their savers' consumption/investment and saving patterns, and psychological factors like confidence in the market. It can then give policymakers - who want to know how fiscal and monetary reforms will affect banks and customers - a better warning of the scale of a financial crisis' impact on the real economy. The software can also simulate the same scenario with an older demographic to help plan for an older Europe, or with limited energy supplies.

Or about this?

ECB: Smets-Wouters (2003) Model

Recent developments in the construction, simulation and estimation of dynamic stochastic general equilibrium (DSGE) models have made it possible to combine a rigorous microeconomic derivation of the behavioural equations of macro models with an empirically plausible calibration or estimation which fits the main features of the macroeconomic time series.

The main difference between empirical DSGE models and the more traditional macroeconometric models (such as the AWM) is that both the parameters and the shocks to the structural equations are related to deeper structural parameters describing household preferences and technological and institutional constraints.

...

For these reasons, staff at the ECB and the Eurosystem have started to develop empirical DSGE models for monetary policy analysis. The Smets-Wouters (2003) Model is an example of such a medium-sized DSGE model, which has been estimated on the basis of quarterly euro area macro data. The model features three types of economic agents: households, firms and the central bank. Households decide how much to consume, how much to invest and how much to work and at what wage. Firms employ workers and capital and decide how much to produce and at what price to sell their products.



There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 08:50:51 AM EST
[ Parent ]
Irish economy overheat in a few years

The first good news in a while! Unfortunately they confuse burning down with overheating. After FIRE there is only ashes.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Mar 2nd, 2012 at 10:25:08 AM EST
[ Parent ]
Beware the inflation leprechaun!

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 2nd, 2012 at 04:48:01 PM EST
[ Parent ]
There are fiscal ways to deal with an overheating economy which are not banned by the ECB, like massively hiking income taxes and using the money to pay down the national debt.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Mar 2nd, 2012 at 05:57:24 PM EST
[ Parent ]
Overheating at 12% unemployment in an open economy doesn't strike you as a little unlikely?
by Colman (colman at eurotrib.com) on Fri Mar 2nd, 2012 at 07:08:04 PM EST
[ Parent ]
Well, of course. There will be no overheating in 2015. But if there were, there are easy remedies. The EMU rules do allow contracyclical policies in the good part of the business cycle.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Mar 2nd, 2012 at 07:44:38 PM EST
[ Parent ]
The EMU rules are being rewritten and enforced to force pro-cyclical policies in the bad part of the cycle.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 02:44:21 AM EST
[ Parent ]
Property taxes, you need to hike property taxes.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 02:41:26 AM EST
[ Parent ]
ElPais.com in English: Spain defies Brussels by granting itself the leeway it was denied on the deficit
The target of 5.8 percent is 1.4 percent above that previously agreed with the Commission

Merkel says changed figure makes "no sense" but market reaction muted

Government expects economy to contract 1.7 percent this year

So, frau Merkel, if the economy will contract by 1.7%, by how much more would it contract with an additional 1.4% budget deficit reduction?

Oh, and

The government expects the jobless rate to rise to 24.3 percent this year from 22.85 percent at the end of last year, with the economy shedding a net 630,000 jobs. De Guindos said he "wouldn`t be so bold" as to predict the number of people out of work would hit six million this year after the record 5.3 million at the end of last year.
No, The Guindos wouldn't be so bold as to say that 5.3 + 0.63 is larger than 5.93...

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 03:56:56 AM EST
[ Parent ]
These figures sound too scary. About time to give the statisticians a new definition of unemployment.
by Katrin on Sat Mar 3rd, 2012 at 04:45:37 AM EST
[ Parent ]
There are projections of 35% unemployment by the end of next year.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Mar 3rd, 2012 at 05:12:36 AM EST
[ Parent ]

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