LONDON | The National Institute of Economic and Social Research in London said the European Monetary Union will take a long year and a mild recession before finding its way towards growth. The UK’s economy would evolve along the same path. In a prospect note, analysts at the NIESR indicated that their baseline forecast is for global growth of 3.7 percent in 2012. Growth will accelerate to 4 percent in 2013. “We…
MADRID | Following German Chancellor Angela Merkel’s instructions, those supposedly at command in Euroland zealously repeat that growth and austerity are not in contradiction. Beware about such a slim talk. Their underlying message is that fiscal compact must be preserved at all costs, growth delivery amounting to a merely cosmetic make-up. Eurocrats are working out ways to sell through financial engineering the same money under a more “à la mode” disguise….
By Luis Arroyo, in Madrid | Here’s one more example of how politics constantly enters the economics arena with the firm intention of interfering in some way or another. That was the time in which the US Republican conservatives tried to grill the then Federal Reserve chief Paul Volcker when he wanted to cool the high inflation of those days down. Let me quote these few lines: “Secretary Regan mustered…
Bad news for those in Brussels and Berlin who expected higher competitiveness through austerity budgets. Eurostat said today that in the fourth quarter of 2011, compared with the previous three months, business investment rates decreased in both the euro area and the European Union. Furthermore, official data also showed that in the euro area, the business profit share declined as wage costs increased while value added fell slightly. From October…
MADRID | Brussels seems to start taking growth into serious consideration. Up to now it follows the line that bringing deficit under tight control would be enough to trigger recovery, austerity standing as the only recipe to cure every shortcoming. The severe downturn that currently plunges European economies into utter disarray is casting doubts on the merits of such a simplistic view. Countries having lived beyond their means face now a…
NEW YORK | The debate between austerity or growth to cure Europes illness is in full swing. Austerians are, though, losing support. A consensus is growing that current cuts alone aren’t likely to tackle the euro zone crisis. For US celebrity economist and director of the Earth Institute Jeffrey Sachs, “Fiscal policy alone won’t save Europe,” he said in the launch of the Center on Global Economic Governance at Columbia…
A curated selection of links we hope can enlighten us all; some come from our corner, some do from other corners of the net. And as always, our comment widgets are anxious to get your suggestions. France isn’t talking about its economy The digital revolution, mind the bit Why Argentina’s president is wrong Everyone talks about Spain… …And many don’t know really what they are saying Democracy and the euro Hollande…
LONDON | J.P. Morgan asset management had some cold words on the news that the UK has entered a double dip recession. Tom Elliott, global strategist at the investment company said that “For most people, the country has felt like it has been in recession since late 2008, so news of an official double dip will be no surprise.” In a short note released after the British office for national statistics…
Awaiting the government’s official figures, which will be released next 30 April, the forecast published this week by the Bank of Spain should be taken as a telling sign of the success that austerity budgets throughout euro peripheral State members are enjoying. The Spanish central bank said that it expects the country’s economic activity to fall by 0.4pc during the first quarter of 2012, a one-tenth down from 2011’s last…
By Carlos Díaz Guell, in Madrid | No one in Spain is going to make it easy for the Rajoy government. Policy reforms and budget cuts undertaken by the cabinet, although considered timid and inadequate by many, will inevitably leave a number of victims in the ditches and they don’t seem willing to let this occur without doing anything against it. The business sectors (most of them) affected by constrictions in public spending…