Englund

  Only the second half of the 700-page volume covers Merkel’s time as chancellor, when she shared the spotlight with Putin, Xi, Obama and Blair.  Instead, much of the focus is on her experiences growing up, studying and working as a physicist (and marrying her first husband) in East Germany before reunification — a country, she reminds us at the outset, which no longer exists. The East is what shaped Merkel.  Recalling a conversation she had in late 1990 with the head of the Treuhand Agency tasked with privatizing East German businesses, Merkel expressed her frustration with the loan decisions made by the agency’s “arrogant, twenty-somethings.”  Straight out of law school, they knew everything except how people work, prioritizing “young West German bankers who are just like themselves” over Easterners with a business idea.  Former SED party members, on the other hand, eloquent and adept at making grandiose promises, were successful all over again. “Unscrupulousn...

Tysklands ekonomi avstannat, tillväxt i Portugal, Italien, Grekland och Spanien Greece had the worst economic slump in a developed country since the Depression.  Now, some 15 years later, for Portugal, Italy, Ireland, Greece and Spain — labelled the ‘PIIGS’ by some analysts in the past — the tables have turned. Germany had no increase in economic activity at all over the past four years, and the Bundesbank has warned that this stagnation may drag on well into 2025 Tourism was boosted by pent-up demand for travel and higher savings during the pandemic. In Spain and in Greece, tourist arrivals are up at double-digit rates  “A 30 per cent disadvantage in unit labour costs that existed over the first decade of the currency union has been offset,” The newfound economic fortunes of Europe’s debt crisis countries can in part be traced a €800bn debt-funded investment programme launched during the pandemic. The so-called NextGenerationEU Portugal, Italy, Spain and Greece are the main r...

 — the countries at the centre of the 2010 to 2015 Eurozone crisis. This story of success in Greece defies all the doomsayers and hotheads of 2015, when the country briefly flirted with leaving the euro under its populist-left Syriza government.  The lesson to learn from the crisis over a decade ago is the value of solidarity across Europe, enabling sovereign debts to be put on a sustainable basis with support from more financially secure countries.  Conditionality attached to this support was vital, despite its political difficulty. Kicking the can down the road, as happened often from 2010 to 2015, was also necessary to foster difficult compromises. Chris Giles Financial Times 11 December 2024 https://www.ft.com/content/9ae38922-bb81-459f-83f9-2eaa4cb38fcf

  The world has changed, but the EU’s worldview hasn’t changed with it Last week, I attended a meeting of mainly European intellectuals and policymakers in the Italian Alps.  One belief that everyone in Trump’s camp shares is that China has been a free rider in the global trading system, and that the resulting imbalances must be corrected. US today is “in the position of some blend of the UK, France, and Weimar Germany in 1930”.  America is a global financial centre with the world’s reserve currency, but also the world’s largest debtor with a hollowed out industrial base. If the US succeeds in decoupling its economy from China’s without major inflation or a market crash, the EU would be even more exposed to Chinese mercantilism As former EU trade commissioner Pascal Lamy put it in a main stage session at the Grand Continent summit last week: “The EU is predictable, slow, and rules based. Trump is the opposite. While intellectuals debated in the Alps, the French government...

Just after the onset of the 2007-08 global financial crisis, disclosures of financial mismanagement in Greece almost plunged the country into bankruptcy and resulted in a loss of confidence in bond markets. A number of countries experienced big increases in government borrowing costs, with yields on government debt in Ireland, Italy, Portugal and Spain rising from about 2% in 2009 to between 7% and 20% in 2011,  and Greek 2-year bond yields rising to 200% in 2012 In addition, the crisis threatened the survival of the euro, which was introduced in 1999. A French sovereign-debt crisis would be a problem for the eurozone, economist says Vivien Lou Chen MarketWatch 3 December 2024 https://www.marketwatch.com/story/u-s-investors-watch-french-budget-mess-amid-memories-of-eurozone-debt-crisis-c1118671 Quantifying the Impact of ECB Policies during the Debt Crisis https://www.nber.org/digest/feb18/quantifying-impact-ecb-policies-during-debt-crisis We use open market operations to steer inte...

The contagion to the rest of the euro zone has so far been minimal — suggesting that the European Central Bank’s promise to act as a lender of last resort, made under duress in 2012, is still having a powerful effect.  When the bloc’s sovereign debt crisis  https://corporatefinanceinstitute.com/resources/fixed-income/european-sovereign-debt-crisis/ broke out in 2010, there was thought to be a real solvency risk attaching to countries at the European periphery, particularly the so-called PIIGS — Portugal, Italy, Ireland, Greece and Spain.  The Macrons and Trumps on Bastille Day 2017.   This time around, the extra spreads that they must pay to investors compared to bunds have remained very stable.   John Authers Bloomberg 3 december 2024   https://www.bloomberg.com/opinion/articles/2024-12-03/france-s-cold-hasn-t-spread-to-rest-of-europe-yet Anders Borg (TT): Den stora risken var att Grekland skulle utlösa en kris i italienska, franska och tyska ban...

  Is France heading for a Greek-style debt crisis? “For the moment, it is a complete exaggeration,” At the height of its debt crisis, the yield on Greek debt climbed above 16 per cent.  The Greek economy had cratered, made worse by punishing austerity measures, and Athens engaged in a bitter fight with Berlin and Brussels over the terms of a Eurozone bailout. Financial Times 28 November 2024 https://www.ft.com/content/a3dc5b2b-3061-48fe-8961-75081e2cc7cc France May Not Be Greece, But It Is Europe Marine Le Pen’s budget brinkmanship is a manageable risk. Longer-term institutional and political crisis is not. Lionel Laurent Bloomberg 29 november 2024 France May Not Be Greece, But It Is Europe - Bloomberg Anders Borg (TT): Den stora risken var att Grekland skulle utlösa en kris i italienska, franska och tyska banker https://englundmacro.blogspot.com/2012/02/anders-borg-tt-den-stora-risken-var-att.html Tillbaka till Rolfs länktips 29 November 2024 https://englundmacro.blogspot.c...

Jag hittade detta när jag letade efter något annat på min blogg.  Det får bli Favorit i repris med ny etikett. Martin Sandbu, the economics leader writer for the Financial Times, skrev (FT 2 april 2012) en ledare som argumenterade emot att Grekland och andra länder borde lämna euron. Han borde veta vad han pratar om. Hans meriter är inte dåliga."Sandbu has a B.A. in Philosophy, Politics and Economics from Balliol College, University of Oxford, and an A.M. and Ph.D. in Political Economy and Government from Harvard University". Nuförtiden verkar fisksoppeargumentet,  att det är lätt att göra fisksoppa av ett akvarium, men svårt att ångra sig och försöka göra ett akvarium av fisksoppan,  ha bytt ut till liknelsen att det är lätt att göra citronsaft av citroner, men svårt att göra citroner av citronsaft. Ekonomerna gör framsteg, vill jag lova. https://englundmacro.blogspot.com/2012/04/eurokrisen-fisksoppan-och-elitens.html Margit Gennser brukade säga att de ingen elit, de är ...

  Ryssland kommer att vara ett hot mot Europa för lång tid framöver. För att vi ska kunna möta detta krävs en politik som bygger på militär styrka och ekonomiska reformer som ger ekonomisk tillväxt och stärker de ekonomiska strukturer som bygger samhällelig säkerhet. Europa måste växla över till en snabbare tillväxt som kan ge oss en roll när det gäller utvecklingen av AI, digitalisering, nya material, moderna energi­källor, avancerad industri samt strategiska råvaru­tillgångar för att Europa ska kunna vara en ledande partner och kraft i den globala ekonomin.  Det kräver en revidering av all EU-lagstiftning de senaste 20 åren. Förre ECB-chefen Mario Draghis rapport... Vi behöver för detta en avreglering som vitaliserar den inre marknaden och som fördjupar och utvidgar den in i alla de medlems­stater vars lagar och regler fortfarande skyddar tjänste­sektorn, nationella företag och monopol. Gunnar Hökmark SvD 6 november 2024 https://www.svd.se/a/zA9MOK/gunnar-hokmark-europa-beho...

  Proposals to integrate the supply chains of the British and German defence industries, and ease rules on military procurement, collide head on with the big push by France and Brussels for an integrated EU defence industry, under a newly-minted defence commissioner, all linked to the EU’s law-making machinery, and therefore subject to the European Court of Justice. This emerging structure is highly protectionist and designed to keep “third countries” well away, especially Britain.  Sir Keir aims to win over Germany, bringing it closer to Holland, the Nordics, Poland, Italy and others less wedded to EU ideological purism and defence mercantilism. The EU institutions can bring almost any member country to heel if it strays too far Enforcers toppled an elected Greek government in 2010, and toppled the elected Italian government in 2012 after Silvio Berlusconi threatened to take Italy out of the euro.  In both cases they parachuted in an EU loyalist. They starved Greek banks...

Humans can survive whole days without food, shelter or internet, but they can’t last long without water.  Which is why it’s so weird that American humans keep rushing to live in places where water is increasingly scarce.  The latest dry hot spot is Texas. The state’s growing population is outstripping its water resources, and climate change will only make it worse. Questions about why Americans keep migrating so relentlessly toward the climate crisis instead of away from it.  People escaping wildfires and high housing prices in, say, California are moving into the path of new disasters, with fresh opportunities for financial ruin . Mark Gongloff Bloomberg 4 september 2024 https://www.bloomberg.com/opinion/articles/2024-09-04/texas-water-problems-like-arizona-but-bigger Greece Is Learning to Live With Wildfires https://www.bloomberg.com/news/features/2024-09-06/greece-wildfires-how-technology-is-helping-mitigate-impact-of-blazes

  CNN 4 August 2024 Overtourism has become a major buzzword in travel in recent years as popular destinations struggle to balance their need for visitor dollars with the quality of life of their residents and maintaining a desirable and sustainable environment for all. On Santorini, according to some, it’s not simply a case of too many tourists. “The truth is that the island is empty. Right now is like never before, it’s the worst season ever.” https://edition.cnn.com/travel/santorini-greece-overtourism-cr uise-visitor-cap/index.html The island was the site of one of the largest volcanic eruptions in recorded history:  the Minoan eruption (sometimes called the Thera eruption), which occurred about 3,600 years ago at the height of the Minoan civilization. https://en.wikipedia.org/wiki/Santorini Under bronsåldern domineras vår värld av tre blomstrande civilisationer. Men inom loppet av bara 50 år kollapsar de alla, en efter en.  https://www.svtplay.se/video/KMVxoG3/varldens...

The far right’s acceptance of the euro means that possible Victory in France’s election is unlikely to lead to financial crisis. Veterans of European crises got a sickening sense of deja-vu this past week. Since a debt crisis beginning in Greece in 2009 almost destroyed the euro, investors have been alert to anything that threatens the survival of the European Union or the common currency shared by 20 of its 27 members.   As Europe’s far-right parties have crept closer to power, their stated goals have shifted from leaving the EU to reforming it from within.  The underappreciated story of Europe’s election season isn’t the fragility of the EU and euro, but their resilience.  The debt crisis that began in Greece in 2009 exposed the common currency’s underlying contradictions.  By allowing countries with higher inflation such as Greece and Spain to borrow at the same low interest rates as Germany, it fueled the growth of unsustainable debts. Yet the euro survived ...

Remember the “PIGS,” short for Portugal, Italy, Greece and Spain?  Four of the top-10 performers in the Stoxx Europe 600 index over the past year are Italian and Spanish banks: Banca Monte dei Paschi di Siena, Banco de Sabadell, Banca Popolare di Sondrio and UniCredit.  In Greece and Italy, yields on 10-year government bonds have gone from trading roughly 2 percentage points above Germany’s to around 1 percentage point. This is an impressive turnaround for nations that many investors saw as irredeemable basketcases following the eurozone crisis of 2011 and 2012. in Europe, though, fiscal austerity is back. The European Parliament last month approved a new set of fiscal rules designed by the 27 EU states.  They will allow for more bespoke adjustment plans, but nevertheless force national governments to return to an arbitrary “structural” deficit below 1.5% and a debt-to-GDP ratio below 60%.  This is a self-inflicted wound as the bloc tries to catch up with American an...

Eurokrisen orsakade djupa lågkonjunkturer och krävde stora internationella räddningspaket. Länderna i södra Europa tvingades strama åt till priset av massarbetslöshet och dramatiskt ökande fattigdom.  Chocker av sådan magnitud tar lång tid att komma ur. Den starka tillväxten sedan 2017 har bara delvis gjort att dessa ekonomier har återhämtat sig. Därför är dagens rubriker i internationell affärspress om ett tudelat Europa där syd växer snabbare än nord ganska missvisande. Trots att de förstås stämmer i sak. Vad som egentligen har hänt är att Europa har blivit mer enhetligt. Eftersom Tyskland går långsammare och Grekland snabbare hamnar länderna närmare varandra. Den europeiska centralbankens jobb har därmed blivit enklare.  Ett av de stora (och rimliga) argumenten mot euron brukade ju var att Tyskland och Grekland var alldeles för olika ekonomier för att kunna ha samma ränta. Detta är ett mindre problem i dag. Katrine Kielos-Marçal DN 5 maj 2024 https://www.dn.se/ekonomi/katri...

  Europe’s Biggest Smart City Rises in Greece On the southern coastline of Greece’s capital, a long-awaited plan to transform the city’s former airport into the largest smart city in Europe is finally gaining momentum. Bloomberg 1maj 2024 https://www.bloomberg.com/news/features/2024-05-01/greece-s-ellinikon-set-to-become-europe-s-biggest-smart-city Dalénum Lidingö https://www.jm.se/stockholm-lan/lidingo-kommun/dalenum/

Italy’s borrowings, for example, could soon exceed 140% of output again. Late on Friday for example, Fitch Ratings observed that France’s aim to bring its deficit down to 3% of gross domestic product by 2027 “will be difficult to achieve.” “Building popular support for bringing debt down looks challenging,” said Colin Ellis, a global credit strategist at Moody’s Ratings Macron last week calling for a change of paradigm in EU rules  over the mandate of the European Central Bank — whose unprecedented tightening has hugely increased France’s financing costs. As officials also know only too well from the region’s sovereign debt crisis of the past decade, getting the balance right there in enforcing discipline isn’t politically easy. Bloomberg 29 April 2024 https://www.bloomberg.com/news/articles/2024-04-29/europe-s-debt-is-rising-again-as-politics-erodes-budget-resolve Anders Borg (TT): Den stora risken var att Grekland skulle utlösa en kris i italienska, franska och tyska banker 22 fe...

Fedchefen Alan Greenspan stod i början av 2000-talet på toppen av sin glans. Den legendariske journalisten Bob Woodward  - han som tillsammans med Carl Bernstein avslöjade Watergate och tvingade Nixon att avgå - gav ut boken Maestro: Greenspan's Fed And The American Boom. År 2002 fick han av Queen Elizabeth II of the United Kingdom titeln honorary Knight of the British Empire för hans "contribution to global economic stability". Sedan kom finanskrisen och Lehman Brothers gick i konkurs 2008. Katastrofen var nära och det råder nu så mycket konsensus som det kan bland ekonomer om att Greenspan var en av de skyldiga, genom att han hållit för låg ränta för länge. Sedan kom eurokrisen. Grekland låg sämst till, men det löstes akut genom att EU lånade ut pengar till Grekland så att Grekland kunde betala sin lån till bankerna. - Den stora risken var att Grekland skulle utlösa en kris i italienska, franska och tyska banker. Nu finns i praktiken en EU-garanti för de utestående grek...

 ... according to Governing Council member Yannis Stournaras, who sees a first rate cut in June. “The ECB has to deal with more difficult problems than the Fed,” the Greek central bank chief said Monday, citing fragmentation in the euro area’s banking system and the legacy of the region’s sovereign debt crisis. Bloomberg 26 February 2024 https://www.bloomberg.com/news/articles/2024-02-26/ecb-faces-bigger-problems-than-the-fed-does-stournaras-says ECB Warns Banks of Consequences for Poor Property Risk Management https://englundmacro.blogspot.com/2024/02/ecb-warns-banks-of-consequences-for.html

 Även den som inte är speciellt intresserad av amerikansk utrikespolitik under 1900-talets senare hälft kommer att fängslas av denna gestalt om de ger sig tid att läsa Frank Costigliolas superba biografi ”Kennan: A life between worlds” (Princeton University Press).  Det är en historia som lämpar sig för en tv-serie och i dessa dagar är väl det ungefär det högsta betyg som man kan ge en bok. Carl Rudbeck SvD 5 januari 2024 https://www.svd.se/a/O8V8xO/borde-vi-ha-lyssnat-mer-pa-george-f-kennan Carl Rudbeck,fyllde på med en signerad artikel i  Sydsvenskan 18 februari 2012  Vi här uppe i Norden tenderar att avskärma oss och säga att det är rätt åt dessa lata greker. De inbillade sig att man kunde pensionera sig vid 50 års ålder med full lön. Nu får de betala för sina misstag.  Sen kan man självgott zappa från TV:s dagliga kravallscener från ett brinnande Aten till hel- eller halvdebil underhållning som På spåret, Så ska det låta eller något slags melodifestival. His...