Category Archive: Europe
According to Deputy Economic Development Minister Andrei Klepach last week, Russia’s economy shrank by 7 percent year on year in the first quarter of 2009, a staggering turnaround for an economy which has just enjoyed eight years of solid oil-fueled growth.
“These figures are worse than we expected,” Klepach said at a press conference in Kiev,citing preliminary figures. Klepach also stated that net capital outflows reached $33 billion in the first quarter of 2009, following record outflows of $130 billion in the second half of last year.
There are times when a country has the calling to step forward on the world stage and transform its role from that of a passive follower to that of a leader. That time has come for India—it must seize the moment.
The reordering of the global economic power structure, with the G20 now taking a prominent role, has created a leadership void among emerging markets.
There is the risk that the emerging market agenda could be taken over by countries that are seen as advancing just their own narrow interests. This would heighten tensions with advanced economies and work against global cooperation.
For the second month in a row, the US nonfarm payroll figure came out bang in line with expectations, missing the consensus forecast by just 3k (after missing by 1k the previous month and 1k in January.) Macro Man isn’t naturally prone to wearing tin-foil hats; if he were, he could only conclude that the Street’s newfound forecasting prowess is the result of government manipulation of the numbers.
In any event, the data brought to mind a comment from last summer, when the US government first announced a support package for the Agencies. “When I picked up my newspaper yesterday, I thought I woke up in France,” quipped Jim Bunning last July, before excoriating the Federales in a Senate hearing.
Most international summit meetings are long on photo-opportunities and short on substance. Last Thursday’s G-20 meeting in London did have genuine substance. Nobody reads the communiques, or listens to the press conferences of leaders or finance ministers. But here it is: Top of the list of accomplishments was expansion of IMF resources. The new SDR [...]
Are you tired of waiting for health care reform?:
When it comes to healthcare, the U.S., Britain and Canada are hurting, by Ezra Klein, Commentary, LA Times: …Long lines come up frequently in the American healthcare discussion, the symbol of all that is to be feared about a government-run system. And it’s true that in Canada and Britain, the two countries most often cited in discussions of what nationalized healthcare might mean, some patients report having to wait months for some elective treatments. Sometimes.
The world changed last week, unreported by the media and hence unseen by most Americans. Our locked orientation – seeing ourselves as the hegemonic or imperial power — blinds us to the almost inevitable evolution of the world to a multi-polar order. In the 21st century the center of economic power moves from West to East.
This blindness afflicts even experts, as seen in this article: “The Last European: Why the G-20 Was a Success“, Simon Johnson, blog of the New York Times, 3 April 2009. The World Bank and International Monetary Fund are central organizations in the global geopolitical system. The first always has an American boss, the second European boss. Johnson explains that both might soon have leaders from the emerging nations, a signal of their emergence onto the world stage as a major power group.
So what is the verdict on the G20 meeting? Now that the international caravan has moved on, will we look back on it as a triumph, a turning point, or a strange little footnote in economic history?
Last time I was at the Excel Centre in Docklands it was for the motor show. Next year’s has been cancelled because of the grim state of the global car industry. The question is whether the results of the G20 meeting will lift the black clouds.
The first thing to say is that Gordon Brown had a much better week hosting the summit than many expected. The idea that it would be a disaster was always a bit far-fetched, and so it proved. The praise from other leaders was genuine. If he was born for anything, this was it.
The big news at the G20 was obviously about the IMF, with the Americans pulling out an impressive deal on funding (compare with our predictions…). But the money is not the biggest achivement. The big move was in terms of who will run the IMF in the near future – as I explain my NYT.com [...]
It may strike you as extraordinary that the G20 summit barely touched on what is, arguably, the key policy issue going forward – what will central banks do, including the detailed when and how of avoiding falling wages and prices (deflation). Fiscal stimulus is already almost fully in play around the world, regulatory reform will at best be slow and not relevant to the recovery, and “we promise to avoid an irresponsible protectionist trade war” is nice but more about not making things worse rather than getting our economies going again. Funding and leadership model change for the IMF can help prevent emerging markets from cratering, but in terms of impact on global growth or unemployment, it’s second order relative to the macro policies of the world’s largest countries.
The number of unemployed in Spain was up again in March – by “only” 123,543. I say “only” since it is evidently less than the 154,508 increase registered in February, or the 198,538 registered in January. And indeed many of the newspaper stories have been full of arguments from Employment Minister Maravillas Rojo (would that she could work “Maravillas”) about how Spain registered the weakest unemployment gain in six months in March (when compared to the previous month). However, as those who look into the economic analysis side of this a bit more (and who don’t believe in either wonders or “miracles) point out, taking seasonal factors into account the monthly 3.55% rise in March shows a more or less steady trend, and no special sign of improvement, despite the large stimulus programme. Last March, for example, unemployment fell by 0.62%.
So when we come to look at the year on year situation (which more or less eliminates the seasonal variation) we find that the year on year rate of increase of 56.69% was the highest so far, and if we look at the chart we will see there is no sign of a softening in the curve.