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The PIIGS are possibly more reliant on road transport than average, something stemming from geographic location, inappropriate Urban Planning or both.
Or a historic lack of capital to invest in railways when they were fashionable. All those states invested in infrastructure when railways were silly socialism.
Ireland has a crappy railway infrastructure and really great social attitudes to use of public transport: Sam's colleagues in her more status conscious job used to be somewhat horrified that she commuted by rail rather than driving. We've upgraded the existing infrastructure, but built relatively little - a light transit system in Dublin. There was far more rail fifty years or so ago.
Just by coincidence, the Spanish government announced yesterday a plan to invest 12 billion euros on railroads:
Spain unveils 17 bln euro infrastructure roadmap MADRID, April 7 (Reuters) - Spain unveiled a 17 billion euro ($22.7 billion) infrastructure spending plan on Wednesday, looking to attract private investment to boost its construction sector as it struggles with high unemployment and a huge budget deficit. The government said 20 percent of the funds would come from the private sector and 80 percent from the Instituto de Credito Oficial (ICO), the European Investment Bank (EIB) and commercial banks. Spain's largest public-private initiative ever will help maintain public works tenders without the government spending a cent as it cuts spending after its public deficit reached 11.2 percent of gross domestic product (GDP) in 2009.
MADRID, April 7 (Reuters) - Spain unveiled a 17 billion euro ($22.7 billion) infrastructure spending plan on Wednesday, looking to attract private investment to boost its construction sector as it struggles with high unemployment and a huge budget deficit.
The government said 20 percent of the funds would come from the private sector and 80 percent from the Instituto de Credito Oficial (ICO), the European Investment Bank (EIB) and commercial banks.
Spain's largest public-private initiative ever will help maintain public works tenders without the government spending a cent as it cuts spending after its public deficit reached 11.2 percent of gross domestic product (GDP) in 2009.
European Salon de News, Discussion et Klatsch - 7 April
Spain hopes electric cars will help jump start future - Cars : europa, europe | euronewsSpain is revving up its green credentials with a plan to encourage electric cars. It wants to see a quarter of a million of them on its roads by 2014, investing 590 million euros in public funds. Lower off-peak power rates and recharging points in homes, car parks and motorways are on the cards. ... The socialist government has announced a 20 percent subsidy for electric car purchases, with a 6,000 euro ceiling. The prime minister unveiled the plan within the context of the economic crisis. Spain is one of the EU countries hardest hit.by Fran
Spain is revving up its green credentials with a plan to encourage electric cars. It wants to see a quarter of a million of them on its roads by 2014, investing 590 million euros in public funds. Lower off-peak power rates and recharging points in homes, car parks and motorways are on the cards. ... The socialist government has announced a 20 percent subsidy for electric car purchases, with a 6,000 euro ceiling. The prime minister unveiled the plan within the context of the economic crisis. Spain is one of the EU countries hardest hit.
Lower off-peak power rates and recharging points in homes, car parks and motorways are on the cards.
...
The socialist government has announced a 20 percent subsidy for electric car purchases, with a 6,000 euro ceiling. The prime minister unveiled the plan within the context of the economic crisis. Spain is one of the EU countries hardest hit.
But that's a story for another time. luis_de_sousa@mastodon.social
Decay during the post wwII maffia period? Any of our Italian ETers that could enlighten us? Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
ten years ago it was a national joke.
of course it may be due to the love affair between italians and driving that make the trains a passably relaxed experience, or maybe that the website for booking and getting schedules actually works and that frees up more staff to um, run the system.
before the net, it could take half an hour just to get through to a station master on the phone! 'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
Note also that Ireland only produces 10% of Gas it consumes. luis_de_sousa@mastodon.social
The reliance on Oil/gas for electricity is partly due to the gas finds off our coast but there is a national target to go 30& renewables by 2020 which seems to be being met ahead of schedule. Our relatively sparse population density doesn't lend itself to rail although it is regrettable we actually reduced rail freight in recent years. Undoubtedly high Oil prices have a disproportionate effect on countries like Ireland because of our high Oil/gas and road dependency. However this effect is dwarfed by the scale of the problems created by our banking sector induced property bubble. notes from no w here
We see one country from the Horn of Africa, a number of countries from the EU15 (Italy and Germany are not far below that dotted line), the USA, and again Belarus and Tayikistan.
Looking at currency reserves was not the right thing to do, as was discussed in that diary's comments and further clarified here. But still, it is interesting that the PIIGS did show up among the most vulnerable countries in my exploratory analysis. The brainless should not be in banking -- Willem Buiter
If you want to delve yourself into this, don't hesitate asking for help ;) luis_de_sousa@mastodon.social
Industrial production rises 13.7% in February - The Irish Times - Fri, Apr 09, 2010
Annual industrial production rose 13.7 per cent in February compared to the same month in 2009, the Central Statistics Office said today.Turnover was 3.6 per cent lower compared with February 2009. The rise in volume was driven by growth in the production of basic pharmaceutical products and preparations, which rose 33.4 per cent. This was offset by a 32.3 per cent decline in the production of computer, electronic and optical products. The "modern" sector, which includes high-technology and chemical sectors, gained 18.5 per cent for the month, while the traditional sector rose marginally at 0.5 per cent. Seasonally adjusted figures show the volume of industrial production for the three-month period to the end of February 2010 was 5.7 per cent higher than the preeceeding quarter. Turnover in the same period was up 4.3 per cent for manufacturing industries."In overall terms, the figures for 2009 weren't too bad all things considered, even though it was the `multi-national' sector that was once again the main output driver. However, given the positive start to 2010, there is every chance that we will see a healthy average increase in manufacturing output this year," said Bloxham's chief economist Alan McQuaid. "The industrial output data are consistent with Ireland's external trade figures, as they clearly show a performance which is better than the global average, but in effect completely driven by a healthy chemicals sector, which can be quite volatile at the best of times. Chemicals account for over 50 per cent of Ireland's merchandise exports, and the fact that the products produced in this industry tend to be less cyclical than other sectors is a huge plus in times of recession."
Annual industrial production rose 13.7 per cent in February compared to the same month in 2009, the Central Statistics Office said today.
Turnover was 3.6 per cent lower compared with February 2009. The rise in volume was driven by growth in the production of basic pharmaceutical products and preparations, which rose 33.4 per cent. This was offset by a 32.3 per cent decline in the production of computer, electronic and optical products. The "modern" sector, which includes high-technology and chemical sectors, gained 18.5 per cent for the month, while the traditional sector rose marginally at 0.5 per cent. Seasonally adjusted figures show the volume of industrial production for the three-month period to the end of February 2010 was 5.7 per cent higher than the preeceeding quarter. Turnover in the same period was up 4.3 per cent for manufacturing industries.
"In overall terms, the figures for 2009 weren't too bad all things considered, even though it was the `multi-national' sector that was once again the main output driver. However, given the positive start to 2010, there is every chance that we will see a healthy average increase in manufacturing output this year," said Bloxham's chief economist Alan McQuaid. "The industrial output data are consistent with Ireland's external trade figures, as they clearly show a performance which is better than the global average, but in effect completely driven by a healthy chemicals sector, which can be quite volatile at the best of times. Chemicals account for over 50 per cent of Ireland's merchandise exports, and the fact that the products produced in this industry tend to be less cyclical than other sectors is a huge plus in times of recession."
Whoops.
Regardless, basing your tax take on property building and transactions is not a good plan, was not a good plan.
The current plan is to cut spending and increase taxes and service charges, because a deflationary spiral will increase the tax take or something. <shrug> Fucked if I know how that's meant to work, but it makes the Commission, the ECB and the financial markets sort of happy.
So the first problem is ideological: why are taxpayers being made liable for private losses - and thus also removing all semblance of moral hazard.
The second problem is also ideological - we tax income and spending, but not property and speculation - so guess where all the money goes, and why property bubbles ultimately become unsustainable - they aren't related to incomes (and ability to pay rents/mortgages) or real economic value, make Ireland uncompetitive, and unbalance the economy to the point where construction industry becomes 30% of GDP.
The third problem is also ideological. We didn't believe in sufficiently regulating "the markets" when the markets where preciously gaming a system of trust on which we all depended. notes from no w here
Frank you seem to be speaking about the future, I was asking about the 7% deficit in 2009. I doubt those 50 billion will come out directly from the budget and all during the same year. luis_de_sousa@mastodon.social
Now, of course, all these factors are compounded by the Government having to introduce swinging capital and ongoing expenditure reductions to try and rein in the deficit.
Basically the whole edifice had been built on the assumption of ever rising property prices with, at most, a "soft landing" or mild correction every now and then. As you know, the "market is always right". notes from no w here
Now, of course, all these factors are compounded by the Government having choosing to introduce swinging capital and ongoing expenditure reductions to try and rein in the deficit.
Fixed that for you.
It is, of course, arguable that the Government should have gone down the Greek route and kept incurring that level of borrowing in the hope that a quicker recovery in the economy and tax take would have enabled us to reduce the deficit at less social cost in due course.
However my point is that we should never have nationalised private debts in the first place. We need a functioning banking system, but that need did not have to be fulfilled through bailing out existing bondholders in exiting banks. The banks, especially Anglo - should have been allowed go bust on a Friday evening and reconstituted as new entities the following Monday.
As David McWilliams has argued, banks go bust all the time, debts are restructured all the time, and there is no reason why such defaults should have had any longer term effect on Ireland's Sovereign debt rating.
Indeed, as we started out from a relatively low level of National debt (c. 28% of GDP at its lowest) 12% budget deficits would have been sustainable for a few years if we hadn't invented NAMA or bailed out the private banks. notes from no w here
It's not about deficit reduction, it's about looking good to the markets.
Markets: Help! We're broke!
Governments: Here's a bailout...
Markets: Oooh - just look at all the new public debt. We're not having that. You might default on us.
I cannot help feeling that "the market" is looking on in shopcked bemusement that we are bailing out the banks in the first place. "We can't trust people who are that stupid now can we"? notes from no w here
But when it is ok to run 50% deficits at one side of the Atlantic but it is not ok to run 12% deficits at the other end, I must concede that something's wrong... luis_de_sousa@mastodon.social
50% refers to total debt to GDP.
I don't think budget deficits equivalent to 12%+ of GDP are sustainable except in an emergency and for a relatively short period. Not only do you have the increased servicing cost, but the interest rates demanded by sovereign debt markets become unsustainable - as in the case of Greece.
Frank this is objectively true in our case in the Eurogroup. But for a state with its own currency such deficits can be run for "long" periods without defaulting. First of all you have to continuously depreciate your currency so that rolling over debt doesn't kill you. Secondly, you set up some sweet rates on government bonds to seduce local investors, keep the debt in borders. Watch the US closely for something along these lines.
There's an obviously problem, at some point the folk may become nervous about an ever depreciating currency. After that it's game over. luis_de_sousa@mastodon.social
I've driven a lot in Greece, Italy and Spain. Italy and Spain are big countries with very diversified terrain. I once spent 36 hours on a train from Padova to Sicily (and yes, it broke down a number of times, but was not stopped for more than an hour at any given time). Greece is pretty mountainous and Spain is just big.
Note though that peripheral states (e.g. Estonia) and Switzerland have similar problems but do not suffer from the same pathology. luis_de_sousa@mastodon.social
And, lo and behold, Austria is the next most oil-dependent country in the EU, after the PIIGS. The brainless should not be in banking -- Willem Buiter
Italy has the Alps and a very mountainous north.
the appenines, while being a lot less formidable than the alps, stretch down beyond the north, and definitely make travel more energy intensive.
nothing more and better branch lines couldn't solve though.
as for energy deficit, i have often heard Italy imports 75% of its electricity, the daily hemorrhage of capital should have people in the streets, but it doesn't, unless you count beppe grillo's five star movement.
maybe this is improving as i am seeing more solar PV panels popping up all over, thanks to trying to keep up with the EU carbon reduction commitments.
on a more disturbing note, there used to be little signs by the roads entering many towns with a white dove on them, stating the community's opposition to nuclear power. they were one of the first things i noticed when coming here 18 years ago.
they seem to be disappearing in this area. 'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
Without having hard numbers, this reliance on Oil is mainly due to the Transport sector, given that all the PIIGS have been modernizing their Electricity infrastructure and consolidating balanced energy mixes there.
How about heating? Before the 70ies oil crises Sweden had lots of oil heating. Sweden of course has large heating needs, though countries with lots of heat tends to have poor insulation making their heating needs larger when it is cold. Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
large families helped each other stay warm huddled round the fire in winter. august afternoons can be merciless.
the winters... what tao said about PT. lots of room for improvement there. 'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
That's for old houses; more recent construction hasn't been so careful, especially during the years when cheap and abundant energy was the prevailing paradigm. Special mention to the buildings and houses built during the 60s and 70s that should be just demolished...
Special mention to the buildings and houses built during the 60s and 70s that should be just demolished...
In my experience they do that all by themselves.
There's a lot of room for improvement, especially in places with extreme temperature swings like desert areas.
The winter in Portugal is extremely uncomfortable in-house: all the houses that I know require extensive amount of heating and are still cold. Contrast this with my place in Liverpool: DOES NOT NEED WARMING IN WINTER AS LONG AS I KEEP CLOTHES ON.
Granted, this is one anecdotal example (and I can think of cold homes in the UK), but I think it honestly reflects the reality: Much energy, wealth (and comfort) escapes through the (uninsulated) windows and doors in PT.
Ah... and don't get me started with cars. I've read somewhere (lost reference, sorry) about something like having the biggest number of cars per capita in Europe for PT. Normally this goes with a justification of "public transport is bad". Who had endured the public transport in London versus Lisbon knows that, at least where most people live, this is utter bull. It is mainly a status symbol, and a symbol of not being prepared to do anything for the common good.
I think I may be able to distil some numbers on this matter to get a clearer picture. luis_de_sousa@mastodon.social
I would be nice to have a quantitative grip on how much energy is lost.
EarthTrends: Data Tables - Energy and Resources
Energy and Resources DATA TABLES Select a data table from the list. Energy Consumption by Sector 2005
The "residential" category should give some clues. Though the tables are in total energy/country and then divided in percentage of that total. So to compare one would need to get the absolute number for residential and divide by population to get residential/capita. And it is getting late in Sweden so I will not get the spreadsheet out now. Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
If anything there should be a relation between the country's external debt and the energy mix. The PIIGS are PIIGS because of their state budget deficit.. and it is not the state that consumes the oil. Moreover, Spain had a budget surplus in the last years, today's deficit is simply conjectural - a the oil-dependence is not.
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