29 de janeiro de 2012

Algumas leituras sobre o momento económico europeu

Das mais antigas para as as mais recentes - aquelas que foram ficando.

The Origins of the Greek Financial Crisis | Foreign Affairs
So, as the Greek state expanded territorially it also expanded its responsibilities, undercutting old traditions of localism and community action. Herein lies the root of the country's current crisis. Long-established, autonomous local elites were displaced in the 1920s, their place taken by a new group of people adept at managing a rent-seeking relationship with the state. The new local leaders joined national parties and then worked to build up party machines by distributing state largesse. Not a single region or city of note mobilized its resources in pursuit of economic success, based on international competitiveness. Instead all major localities channeled central government resources into patronage. The central government, which was dominated by the same parties, was an energetic accomplice.

By the late 1980s, the interaction between local and national elites had already produced a highly dysfunctional system. Appointments to key institutions -- hospitals, museums, universities, and port authorities -- were not meritocratic. To become president of a university, one would need to buy off the student unions, which could deliver the votes needed to win an election. To run a hospital, one would had to have put in the time as a hanger-on of one of Greece's major national parties. Unconditional European Union funding in the 1980s and early 1990s, and easy international borrowing in the 2000s helped both the left and right finance unsustainable patronage politics.

According to Eurostat, the EU's statistical agency, public payroll expenses (salaries and pensions of civil servants) rose in Greece from 38 percent of state revenue in 2000 to 55 percent in 2009. Compounding this trend, local elites became hostile to any coherent national reform effort, precisely to preserve the system that now privileged them. For example, in the mid-2000s a local alliance in Salonica successfully resisted the granting of a concession to a major international port operator, in order to retain management of it themselves.

 Happy 2012? | vox - Research-based policy analysis and commentary from leading economists

This observation raises another, most disquieting, interpretation. Are the politicians captured by special interests?

A common thread of many decisions is that they aim at protecting banks. Clearly, no one wishes to see a banking collapse but if, as many believe, some deep bank restructuring is unavoidable, forbearance is highly counterproductive. The capture interpretation rests on a web of signals: the initial refusal of contemplating any sovereign debt restructuring, last summer’s row with the IMF Managing Director, pressure on the European Banking Authority to conduct gentle stress tests, and the negotiation of PSI with the world banking lobby leading to solutions that protect banks while providing little debt relief.

The ECB’s actions have been equally disquieting, raising all the same questions (understanding of the phenomenon, access to technical support, capture). The small-scale bond purchases of the SMP have repeatedly failed to quieten markets down. Tactically, the presence of the ECB in the market provides temporary relief. Yet, official statements that the latest intervention was a one-off have systematically undermined any strategic benefit that could be reaped. Most disturbing is continuous insistence on the primacy of the price stability objective, as well as concern with the transmission channels of monetary policy at a time when bond markets are in panic and the interbank market has stopped functioning. As he left the Executive Board, Lorenzo Bini-Smaghi has evoked “quasi-religious discussions” within the Eurosystem. This would confirm the impression that the central bank is not focused on hard-core economic analysis and would explain why it does not seem to learn from past mistakes either.

The only kind interpretation is that the ECB and some politicians shrewdly want to use the crisis to achieve lasting fiscal discipline throughout the Eurozone. One idea is that acute pain will teach a lesson to countries that have always thought little of fiscal discipline. A better one is that we need to go to the brink to make serious changes politically acceptable.

A Month In Spain That Didn’t Shake The World | afoe | A Fistful of Euros | European Opinion

Simply put I think Spain’s centralised wage bargaining system can explain why Spain hasn’t had an internal devaluation and wage and price reduction of the kind Latvia, or even, Ireland had. Spain’s labour and product market structures are inflexible, and this is why the economy is having so much difficulty adjusting, and making the transition from a construction and consumer-demand driven economy to an export-driven one.

But this lack of labour market flexibility isn’t NOT the main reason competitiveness was lost before the start of the crisis. The reason competitiveness was lost was the availability of excessively cheap borrowing made available by Europe’s large and deep capital markets and cheap interest rates at the ECB. It was this massive and cheap liquidity which generated one of the largest property bubbles seen this century. The bubble created huge distortions (many of which have still to be unwound), and basically meant that it was too easy for everyone (workers and employers alike) to make money, so there was no pressure even on the employers themselves to address the fact they were paying increasing wages without getting increasing productivity. It was simply a “cool” time for everyone.

Jobless in Spain: What can be done about the insider-outsider divide | vox - Research-based policy analysis and commentary from leading economists:

Spain has a lower public debt-to-GDP ratio than not only Italy, but also France, Germany, and the UK. So why is it threatened with another downgrade? This column points to the fundamental problem with Spain’s economy – the insider-outsider divide that has led to the highest unemployment rate in the Eurozone. It proposes a single open-ended contract for all workers – a difficult solution whose time has come.

The Irish Economy » Blog Archive » Debt and Deleveraging

JOHN MAULDIN: Staring Into The Abyss

                 Problemas da Europa:

1. A growing number of its countries are insolvent or close to it. It is increasingly likely that the only way forward is for defaults of some type, to lessen the burden of debt to a level where it can be dealt with and that will allow the countries the possibility of growth, which is the only real answer to the problems they face.

2. Because of growing fears of multiple defaults (just Greece would be bad enough!) most of the banks in Europe are seen to be insolvent and in need of hundreds of billions of euros of new capital. The interbank market in Europe is in a shambles, and banks park their cash with the ECB, at a lower rate of return, as that is the only institution they trust. They clearly do not trust each other. As an aside, I heard from many sources while I was Hong Kong and Singapore, meeting with readers and friends, that European banks (especially French) are cutting back on their trade lending, which is making normal commerce more difficult. Didn't we just go through that in 2008?

3. The real problem in Europe is the massive trade imbalances between the peripheral countries and the so-called core countries. Without the ability to adjust currencies, those trade imbalances will render any debt solution moot, as a country cannot balance its budget while it runs a trade deficit and its citizens and businesses also deleverage. I have written about this arithmetic problem on numerous occasions. There must be balance or there must be a mechanism to achieve balance.

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