- RGE - Is King Euro Naked?
Europeans may find several historical and theoretical reasons why a political government for the euro area would be desirable. But after the global crisis there are technical reasons why it is more than desirable. That conclusion is a necessity in light of three increasingly important aspects of current monetary developments in Europe: (1) the lack of an exchange rate policy; (2) the absence of a European fiscal authority guaranteeing the stability of sovereign bonds; and (3) the collusive relationship developing between the European Central Bank (ECB), the banks, and the national governments hiding the costs to the taxpayers.
- RGE - Post-Crisis: What Should Be the Goal of a Fiscal Exit Strategy?
One obvious fallout of the global financial crisis is a huge
deterioration in fiscal conditions, particularly in advanced countries. [...] It really boils down to “plain vanilla”
deficits—revenue losses from the recession, fiscal stimulus, and some
underlying spending increases that would have occurred even without a
recession.
[...]The first step is to stabilize the debt-to-GDP
ratio.[...] But is stabilizing debt
ratios at their post-crisis level enough?
- RGE - Balancing Fiscal Support with Fiscal Solvency
As I noted in my last post,
government deficits in many countries—particularly in advanced
countries—have jumped dramatically in the wake of the global crisis,
and government debt has reached levels that could jeopardize longer
term macroeconomic stability and growth. [...] The challenge for policymakers is to formulate strategies for fiscal
solvency—what we often call “exit strategies”—and communicate these
strategies to the general public.[...] Are there
actions that governments can undertake today to enhance their
credibility without negatively affecting aggregate demand?
- RGE - ECB Shows the Exit: Timing and Signposts [...] the
central bank is increasingly feeling the need to regain control of
market interest rates via a progressive mopping up of excess liquidity. [...] As a result, ECB figures confirm that banks’ net asset
purchases of government bonds more than tripled and now stand at EUR
150bn: banks enjoyed a positive carry which was much needed for their
impaired bottom lines, and governments were able to finance the
heaviest supply in history which allowed them to undertake a
significant (though not dramatic) fiscal easing. Something for
everyone. Faced with a stabilizing macro and financial picture, the
question is: what’s next?
- McKinsey & Company - Imbalances that strain the eurozone:
"[...] Much less noticed has been the steady rise in current account deficits
and surpluses among eurozone countries since the adoption of the common
currency in 1999. [...]
Although the eurozone's collective current account has seen only modest
deficits and surpluses, the sum of the absolute value of its current
deficits and surpluses rose at a 16.3 percent annual rate after
2000—more than twice as fast as the 6.7 percent annual pace of increase
in the 1990s. To put this in perspective, the U.S. current account
deficit grew by 7 percent per year during this period, while China's
surplus grew at a 43 percent annual rate.
[...] Meanwhile, Greece, Italy, Portugal, and Spain have run growing current
account deficits since 2000, both with other eurozone countries and
with the rest of the world. Spain's overall current account deficit
reached $154 billion in 2008, the largest of any country in the
eurozone, and equal to roughly 10 percent of GDP—much bigger
proportionally than the U.S. deficit at its peak. Greece and Portugal
had even bigger current account deficits relative to GDP in 2008.
[...] In deficit countries, foreign capital flows fell sharply in 2008, by
some 28 percent in Spain and 30 percent in Portugal, for example,
contributing to deep recessions. Today, after the wage and price
run—ups that occurred in the deficit countries during the boom, their
exports are less competitive on world markets than those of other
eurozone countries. [...]
[...] In addition, running a continued current account deficit adds to the
national debt, whether it is in the form of government debt (as in
Italy) or private debt (as in Spain, Portugal, and Greece). And at some
point, these debts must be repaid. Although the use of a common
currency removes the risk of a sudden currency depreciation causing the
value of foreign debt to soar, the repayment will still represent a
transfer of wealth and income out of the country to investors
elsewhere.
[...] It will also require adopting policies to promote higher
productivity growth in the deficit countries of Southern Europe, which
will raise incomes and create more competitive exports. [...]"
- arquivo: Ausência de caminho?| Pedro Adão e Silva
[...] Moral da história: sem o pacote de estímulos, a recessão
teria sido bem mais profunda e o desemprego ainda pior.
Foi quebrado o ciclo vicioso que nos ameaçava, mas os riscos estão
longe de terem sido eliminados. Que fazer agora? Estamos perante um
dilema dramático: não temos recursos para manter a economia alimentada
pelo consumo público, mas não há condições para não o fazer.
Há três caminhos possíveis, todos muito exíguos: diminuir a despesa
(sendo que a que resta é tremendamente rígida); aumentar impostos (não
se vê quais) e estimular a economia, continuando a aumentar a despesa.
Provavelmente, é preciso fazer de tudo um pouco. Mas também é
necessário que nos libertemos dos que, enquanto se entretêm a repetir
que o cenário é negro, não conseguem vislumbrar nenhum caminho.
Mensagens
