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Gene Ellis

Euro zone, IMF agree on Greece aid deal - The Washington Post - 0 views

www.washingtonpost.com/...2-b01f-5f55b193f58f_story.html

euro zone imf greece aid deal washington post

shared by Gene Ellis on 28 Nov 12 - No Cached
  • To reduce Greece’s debt pile, ministers agreed to cut the interest rate on official loans, extend their maturity by 15 years to 30 years, and grant Athens a 10-year interest repayment deferral.
  • They promised to hand back $14 billion in profits accruing to their national central banks from European Central Bank purchases of discounted Greek government bonds in the secondary market.
  • They also agreed to finance Greece to buy back its own bonds from private investors at what officials said was a target cost of about 35 cents in the euro.
  • ...4 more annotations...
  • Draghi
  • a break from the era of missed targets and loose implementation towards a new paradigm of steadfast reform momentum,
  • Greece, where the euro zone’s debt crisis erupted in late 2009, is the currency area’s most heavily indebted country, despite a big “haircut” this year on privately held bonds.
  • The key question remains whether Greek debt can become sustainable without euro-zone governments having to write off some of the loans they have made to Athens.
Gene Ellis

U.N. Says Aid Crisis Worsens in Central African Republic - NYTimes.com - 0 views

www.nytimes.com/...-central-african-republic.html

shared by Gene Ellis on 05 Jan 14 - No Cached
  • U.N. Says Aid Crisis Worsens in Central African Republic
Gene Ellis

Some thoughts on German politics and the saver's tax in Cyprus | Credit Writedowns - 0 views

www.creditwritedowns.com/...-the-savers-tax-in-cyprus.html

shared by Gene Ellis on 18 Mar 13 - No Cached
  • Now, the large 82.8% German government debt to GDP ratio is a source of shame for many because Germany was a driving force in enshrining the 60% government debt to GDP hurdle into the Maastricht Treaty that set out terms for the euro zone.
  • Moreover, the interest rate policy of the ECB, geared as it was to the slow growth core, produced negative real interest rates and credit bubbles in Spain and Ireland during the last decade. German banks piled in to those countries as prospects domestically stagnated.
  • “The average German worker feels like a cash cow being sucked dry by a quick succession of reforms and bailouts that take money out of her pocket. First it was for reunification, then for European integration, then to right the economy, then to bail out German banks, and finally to bail out the European periphery. Fatigue has set in.”
  • ...10 more annotations...
  • The bottom line is that none of the major political parties in Germany are going to vote for bailouts for other euro zone countries unless massive strings are attached, since these bailouts are political losers.
  • The anti-bailout part of the FDP platform is the one part of their rhetoric which could successfully take them over the 5% hurdle. The FDP’s complicity in using German taxpayer money to bail out the so-called profligate periphery is a one-way ticket out of Parliament.
  • “First, the Greek reports come via statements made by Michael Fuchs, CDU deputy Bundestag head and a senior member of German Chancellor Angela Merkel’s party. Fuchs warned earlier today that Germany would veto further aid to Greece if the country has not met the conditions of its previous bailouts.
  • “Second, all along Germany has indicated that it is resistant to increasing funding of the ESM and EFSF bailout facilities. This presents a problem in the case of Spain and Italy because of the size of those economies.
  • Willem Buiter, Chief Economist at Citigroup, has been most vocal in predicting that these facilities will be inadequate when Spain and Italy hit the wall and that more extreme measures will have to be taken.
  • The basic dilemma here is that almost all of the eurozone governments including Germany carry high debt burdens in excess of the Maastricht Treaty. For example, Germany has been in breach of Maastricht Treaty in 8 of 10 years since 2002, has been over the Maastricht 60% hurdle in each of those ten years, and now carries a debt to GDP burden above 80%.
  • The long and short of it was that the Germans had reached the end of their ability to support bailouts.
  • All evidence is that this levy has created panic in Cyprus. After all, what is the use of having a deposit guarantee if government can arbitrarily circumvent it to impose losses on your deposits anyway?
  • One can't just blame Cyprus for this fiasco. The ECB, EC and European Union finance ministers signed off on the insured deposit grab too]
  • My view? It was inevitable that we would be in crisis again. The austerity world view of crisis resolution is completely at odds with the capacity of the euro zone’s institutional architecture to handle a crisis.
Gene Ellis

Robert Samuelson: A dishonest budget debate - The Washington Post - 0 views

www.washingtonpost.com/...2-9f54-f3fdd70acad2_story.html

budget debate washington

shared by Gene Ellis on 18 Mar 13 - No Cached
  • t’s the math: In fiscal 2012, Social Security, Medicare, Medicaid and civil service and military retirement cost $1.7 trillion, about half the budget.
  • As a share of national income, defense spending ($670 billion in 2012) is headed toward its lowest level since 1940.
  • States’ Medicaid costs will increase with the number of aged and disabled, which represent two-thirds of Medicaid spending. All this will force higher taxes or reduce traditional state and local spending on schools, police, roads and parks.
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  • Almost everything is being subordinated to protect retirees.
  • “for how long will we continue to sacrifice investments in our nation’s children and youth ... to spend more and more on the aged?”
  • In a Pew poll, 87 percent of respondents favored present or greater Social Security spending; only 10 percent backed cuts. Results were similar for 18 of 19 programs, foreign aid being the exception.
  • an aging America needs a new social compact: one recognizing that longer life expectancies justify gradual increases in Social Security’s and Medicare’s eligibility ages; one accepting that sizable numbers of well-off retirees can afford to pay more for their benefits or receive less; one that improves generational fairness by concentrating help for the elderly more on the needy and poor to lighten the burdens — in higher taxes and fewer public services — on workers; and one that limits health costs.
  • Government is being slowly transformed into a vast old-age home, with everything else devalued and degraded.
Gene Ellis

Op-Ed Columnist - Bubbles and the Banks - NYTimes.com - 0 views

www.nytimes.com/...08krugman.html

Krugman banks

shared by Gene Ellis on 24 Apr 13 - Cached
  • Bear in mind that the implosion of the 1990s stock bubble, while nasty — households took a $5 trillion hit — didn’t provoke a financial crisis. So what was different about the housing bubble that followed?
  • The short answer is that while the stock bubble created a lot of risk, that risk was fairly widely diffused across the economy. By contrast, the risks created by the housing bubble were strongly concentrated in the financial sector. As a result, the collapse of the housing bubble threatened to bring down the nation’s banks. And banks play a special role in the economy. If they can’t function, the wheels of commerce as a whole grind to a halt.
  • Why did the bankers take on so much risk? Because it was in their self-interest to do so.
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  • Of course, that conflict of interest is the reason we have bank regulation. But in the years before the crisis, the rules were relaxed — and, even more important, regulators failed to expand the rules to cover the growing “shadow” banking system, consisting of institutions like Lehman Brothers that performed banklike functions even though they didn’t offer conventional bank deposits.
  • And here’s the thing: Since that aid came with few strings — in particular, no major banks were nationalized even though some clearly wouldn’t have survived without government help — there’s every incentive for bankers to engage in a repeat performance.
Gene Ellis

The delicate balance of fixing the eurozone | Martin Wolf's Exchange - 0 views

blogs.ft.com/...balance-of-fixing-the-eurozone

shared by Gene Ellis on 17 Jul 12 - No Cached
  • The euro itself was a leading cause of this crisis by ushering in a remarkably swift convergence in interest rates, which had the effect of directing too much capital into countries that formerly had had to pay high interest rates. This undermined the competitiveness of these countries through inflation and gave rise to huge deficits in their current accounts.
  • The euro is not suffering from a mere confidence crisis that can be resolved by assuaging the markets; it is experiencing a profound balance‐of‐payment crisis that is being prolonged by the expansion of public financial aid.
  • Since autumn 2007, long before the official bail‐out initiatives began, some of the crisis‐hit countries have replaced dwindling private capital imports and capital flight with their money‐printing presses (Target credits).
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  • 5. Export surpluses create no real value if they translate into claims vis‐à‐vis countries which ultimately cannot pay their debts,
  • 6. The ECB Council overstepped its mandate when it transferred to Eurozone national central banks, primarily the Bundesbank, the task of financing the public and private deficits of other countries.
  • 7. Germany’s liability for the bail‐out initiatives does not total 211 billion euros, as often cited, but is actually now close to 600 billion euros if the far larger bailout initiatives of the ECB are included in this figure.
  • 8. The Target credits and the purchase of government bonds by the ECB system transfer the investment risk of private investors and banks to the taxpayers of economically sound countries, posing a threat to the euro because they offer debtor countries incentives to advocate inflationary policies at the ECB Council which would help them defer their obligation to repay their foreign debts.
  • 9. Eurobonds would undermine debt discipline, lead to much higher interest burdens for the German state, and anew induce capital flows in Europe that would exacerbate the external imbalances.
  • ) Target debts are to be settled on an annual basis with interest‐bearing, marketable assets as in the US.
  • g) Countries that are not competitive enough to repay their foreign debts should, in their own interest, leave the Monetary Union.”
  • I also appreciate the fact that the declaration envisages a credit boom in Germany that would ultimately rebalance the eurozone economy. Nevertheless, this rebalancing is likely to prove painfully slow and certainly requires a prolonged period of relatively high inflation in Germany, to offset relatively low inflation in the vulnerable countries. It is far from clear that German public opinion is prepared for such an outcome.
  • More important, I do not believe a currency union that takes for granted the possibility of sovereign defaults and even exit would prove workable. It is a recipe for extreme financial instability, with huge runs on credit to banks, private non-banks and governments built in.
  • mechanisms of financing and adjustment. Permanent transfers from some countries to others, merely to offset a lack of
  • competitiveness (rather than accelerate income convergence), are indeed undesirable. Nevertheless, financing needs to be sufficiently large and generous to give vulnerable countries some chance of managing the adjustment to shocks, without sovereign default, mass private bankruptcies and implosion of financial systems.
  • Gene Ellis on 17 Jul 12
     
    The second major article on Professor Hans-Werner Sinn's attack on the premises of the eurozone. TARGET 2 analysis, plus...
Gene Ellis

Statistics in Africa: Making Africa count | The Economist - 0 views

www.economist.com/...statistics-africa

GDP accounting Nigeria Ghana

shared by Gene Ellis on 09 Jan 14 - No Cached
  • IN 2013 Nigeria’s GDP could increase by 40%, which would be impressive even by Africa’s recent bouncy growth standards. The rise will come not from a surge in economic activity but because the country is rejigging the way it calculates its accounts.
  • But the new figures may owe as much to political calculation as to hard-nosed statisticians
  • Nigeria’s real GDP is based on 1990 prices. It plans to update them to ones from 2008. Ghana did the same in 2010, revising its base year from 1996 to 2006. Its GDP shot up by 60%, propelling it overnight from being a poor to middle-income country, defined by the IMF as having a GDP per person of at least $1,026 a year.
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  • In 2005 its government brought in fertiliser subsidies. It reported a maize crop of 3.4m tonnes in 2006-7, up from 2.6m tonnes the year before. The aid lobby said this justified the subsidies and the budget support which enables them to be paid for.
  • But figures released in 2010, disputed by Malawi’s ministry of agriculture, suggest that the harvest was only 2.1m tonnes. If maize production had risen as much as claimed, Malawians should have have had a surplus of maize and prices should have dropped. That did not happen, says Mr Jerven.
Gene Ellis

Why Is Zambia So Poor? And Will Things Ever Get Better? - 0 views

www.psmag.com/...zation-mining-corruption-66080

Zambia Why so poor?

shared by Gene Ellis on 09 Jan 14 - No Cached
  • Sixty-four percent of the population lives on less than $1 per day, 14 percent have HIV, 40 percent don’t have access to clean drinking water. Almost 90 percent of women in rural areas cannot read or write. Name a category—schools, health care, environment—and I’ll give you statistics that will depress the shit out of you.
  • For more than 150 years, the only reason to come to Kitwe—to Zambia, really—was the copper.
  • Most of the buildings in Kitwe, the roads, the health clinics, the schools, were built by the national mining company
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  • At its peak, the Zambia Consolidated Copper Mines company employed more than 65,000 Zambians and carried out services like water delivery and waste collection for five cities in the Copper Belt Province.
  • Mining employment has dropped to just 30,000, half of its glory-days peak, and the job of maintaining all that company housing and infrastructure has reverted back to the government.
  • The stats identify Switzerland as Zambia’s primary export market. This is not an indicator that Zambia hosts a thriving chocolate and suspenders sector, but rather that its copper trades are booked in the jurisdiction where they are least likely to be taxed.
  • Many of the mining companies pay just 0.6 percent royalties to Zambia, far below the already-meager industry standard of three percent.
  • And then there’s the Chinese. They arrived like a well-packed picnic, everything in shipping crates ready to be unpacked. Their own materials, their own equipment, their own workers, their own fences. If you were designing a foreign investment not to benefit the host community, this is what it would look like.
  • This is Namwile Uzondile, the director of a rural health education project.
  • Last year Namwile conducted a survey of prostitutes here in Kitwe, and found that at least half of them had education certificates, but couldn’t find work. Most had been married off early, 15 or 16, and since then had either left their husbands or lost them to AIDS.
  • First, you go to the tribal chief. Ninety-four percent of the land in Zambia is customary or traditional, no one has a title to it. It’s not just sitting there, people are living on it, farming, grazing animals, it’s just technically under the control of a chief.
  • In Zambia most of the chiefs require a gift just to get a meeting. This might mean taking them lunch at a restaurant in Lusaka, or it could mean buying their daughter a car—it’s up to them.
  • Another reason Zambia lacks skills is that some parts of the workforce operate as cartels. Take lawyers. Zambia only has 1,000 of them, and they’re concentrated where the money is: Lusaka (government), Copper Belt (mining) and Livingstone (safari tourists).
  • Last year, only six lawyers were admitted to the bar out of 164 who took the exam. The year before that, it was 16 out of 145. Keep in mind, these aren’t people coming in off the streets. These are people who have a law degree.
  • More than 60 percent of Zambia’s government revenue comes from the copper mines.
  • Taxing all this informal activity would be costly in both resources and voter goodwill. In 2012, Zambia collected just $2.3 million in income taxes from its citizens.
  • It goes as high up as you want to follow it. Michael Sata, the president of Zambia, appointed his uncle the finance minister, his nephew the deputy finance minister, his niece the local government minister, and cousins as ambassador to Japan and chief justice.
  • Zambia’s cabinet has ballooned to 20 ministers and 47 deputy ministers, the largest in Africa. With salaries three to four times higher than opposition MPs and each ministerial post bundled with perks like a company car, free fuel, house servants, and mobile phone talk-time, you get the feeling politicians aren’t jumping from opposition into government on moral sentiment alone.
  • But even if Zambia was run by a coalition of charitable technocrats and Mormon philanthropists, that wouldn’t solve the most fundamental problem of all: There simply isn’t that much money to go around.
  • In 2011, Zambia spent a total of $4.3 billion running itself. Stretch that to cover every man, woman, and child, and it amounts to just $325 per person per year. That amount—less than a dollar per person per day—has to cover education, health care, infrastructure, law enforcement, foreign debt … everything.
  • Now she goes all NGO. “Little government capacity,” she says, is the nicest way to put it. “There are simply no systems for routine government services,” she says. Getting a license, a permit, certificates, approvals to start work, visas for expats to fly down here—nothing is in one place, nothing is fast or easy.
  • And that’s just the bureaucracy. Then there are the cops that pull you over to ask for 50 kwacha ($10); the schools with slots reserved for paying parents; the hospitals that swear the earliest appointment, the only available medicine, is six months away until you reach into your pocket.
  • “Sometimes we have to pay for the inspectors to come to our mines,” Jane says.
  • The conversation goes like this: Jane tells the local certification body that she needs an inspector to sign off for a permit. The local certification body tells her that they would be happy to come out to the site, but they don’t have fuel for their cars, or enough petty cash to pay per diems. Jane offers to pay their costs, but only their costs, and the payments aren’t related to clearing the inspection.
  • The company has even paid the police to follow up on complaints or to investigate thefts. “They say, ‘We don’t have this in our budget’ or ‘We’ll need you to pay for it,’” Jane says. So the company fixes the police cars, covers their travel expenses, treats them to lunch.
  • “We tell them, ‘The company I work for, we’re not going to pay up.’ But at the end of the day, they know you’re on a short timeline, and they aren’t.”
  • Thomas’ family told him his nephews didn’t need to be in school. From their perspective, that’s not totally irrational. In a country with so few formal jobs and so much competition for getting them, I can see how spending hundreds of hours, thousands of kwachas, on education would seem superfluous. Thomas’ daughter wants to become a lawyer. You could almost forgive Thomas if he told her that the bar exam failure rate is more than 90 percent, so what’s the use?
  • International investors pledged $750 million last year to build infrastructure.
Gene Ellis

Companies Quietly Apply Biofuel Tools to Household Products - NYTimes.com - 0 views

www.nytimes.com/...pplied-to-household-soaps.html

shared by Gene Ellis on 01 Jun 14 - No Cached
  • Companies Quietly Apply Biofuel Tools to Household Products
  • A liquid laundry detergent made by Ecover, a Belgian company that makes “green” household products including the Method line, contains an oil produced by algae whose genetic code was altered using synthetic biology. The algae’s DNA sequence was changed in a lab, according to Tom Domen, the company’s manager for long-term innovation.
  • Unilever recently announced that it was using algae oil made by a company called Solazyme in Lux, a popular soap
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  • An ingredient crucial to malaria drugs, artemisinin, is already being produced from a yeast altered through synthetic biology. Specific brands have not been disclosed.
  • Solazyme points to substances like rennet, a key processing aid in cheese-making that requires an enzyme called chymosin to promote clotting. Traditionally, calves’ stomachs were used to provide that enzyme to curdle milk for cheese. But since the late 1990s, rennet has been generated by a microbe whose genetic code was altered with the insertion of a single bovine gene, and that process is the one most widely in use now in the United States.
  • Solazyme describes the organism that produces the oil as “an optimized strain” of single-cell algae “that have been in existence longer than we have.”
  • Ecover buys the ingredient, algal oil from Solazyme, which used to describe itself as a synthetic biology company but has taken the term off its website.
  • Solazyme pointed to the environmental benefits of its processes and noted that the World Wildlife Fund, Rainforest Alliance and other environmental groups support its work. “We use molecular biology and standard industrial fermentation to produce renewable, sustainable algal oils that help alleviate pressures on the fragile ecosystems around the Equator that are frequently subject to deforestation and habitat destruction,”
  • The groups acknowledge that the Solazyme oil itself — in the Ecover detergent — does not contain genetically engineered ingredients in the conventional meaning of the term. Rather, the organism producing the oil has been genetically altered.
  • Some of the same companies are now busily churning out vanillin, resveratrol and citrus flavorings from yeast and other microorganisms that are a product of synthetic biology for use in foods.
Gene Ellis

Productivity: Technology isn't working | The Economist - 0 views

www.economist.com/...higher-productivity-and-better

shared by Gene Ellis on 05 Feb 15 - No Cached
  • Technology isn’t working
  • Technology isn’t working
  • n the 1970s the blistering growth after the second world war vanished in both Europe and America. In the early 1990s Japan joined the slump, entering a prolonged period of economic stagnation.
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  • Between 1991 and 2012 the average annual increase in real wages in Britain was 1.5% and in America 1%, according to the Organisation for Economic Co-operation and Development, a club of mostly rich countries.
  • Real wage growth in Germany from 1992 to 2012 was just 0.6%; Italy and Japan saw hardly any increase at all.
  • And the dramatic dip in productivity growth after 2000 seems to have coincided with an apparent acceleration in technological advances as the web and smartphones spread everywhere and machine intelligence and robotics made rapid progress.
  • A second explanation for the Solow paradox, put forward by Erik Brynjolfsson and Andrew McAfee (as well as plenty of techno-optimists in Silicon Valley), is that technological advances increase productivity only after a long lag.
  • John Fernald, an economist at the Federal Reserve Bank of San Francisco and perhaps the foremost authority on American productivity figures, earlier this year published a study of productivity growth over the past decade. He found that its slowness had nothing to do with the housing boom and bust, the financial crisis or the recession. Instead, it was concentrated in ICT industries and those that use ICT intensively.
  • Once an online course has been developed, it can be offered to unlimited numbers of extra students at little extra cost.
  • For example, new techniques and technologies in medical care appear to be slowing the rise in health-care costs in America. Machine intelligence could aid diagnosis, allowing a given doctor or nurse to diagnose more patients more effectively at lower cost. The use of mobile technology to monitor chronically ill patients at home could also produce huge savings.
  • Health care and education are expensive, in large part, because expansion involves putting up new buildings and filling them with costly employees. Rising productivity in those sectors would probably cut employment.
  • The integration of large emerging markets into the global economy added a large pool of relatively low-skilled labour which many workers in rich countries had to compete with. That meant firms were able to keep workers’ pay low.
  • By creating a labour glut, new technologies have trapped rich economies in a cycle of self-limiting productivity growth.
  • Productivity growth has always meant cutting down on labour. In 1900 some 40% of Americans worked in agriculture, and just over 40% of the typical household budget was spent on food. Over the next century automation reduced agricultural employment in most rich countries to below 5%,
  • A new paper by Peter Cappelli, of the University of Pennsylvania, concludes that in recent years over-education has been a consistent problem in most developed economies, which do not produce enough suitable jobs to absorb the growing number of college-educated workers.
Gene Ellis

Dani Rodrik shows why Sub-Saharan Africa's impressive economic performance is not susta... - 0 views

www.project-syndicate.org/...performance-is-not-sustainable

economics africa

shared by Gene Ellis on 27 Dec 13 - No Cached
  • Africa’s Structural Transformation Challenge
  • As researchers at the African Center for Economic Transformation in Accra, Ghana, put it, the continent is “growing rapidly, transforming slowly.”
  • Fewer than 10% of African workers find jobs in manufacturing, and among those only a tiny fraction – as low as one-tenth – are employed in modern, formal firms with adequate technology. Distressingly, there has been very little improvement in this regard, despite high growth rates. In fact, Sub-Saharan Africa is less industrialized today than it was in the 1980’s. Private investment in modern industries, especially non-resource tradables, has not increased, and remains too low to sustain structural transformation.
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  • As in all developing countries, farmers in Africa are flocking to the cities. And yet, as a recent study from the Groningen Growth and Development Center shows, rural migrants do not end up in modern manufacturing industries, as they did in East Asia, but in services such as retail trade and distribution. Though such services have higher productivity than much of agriculture, they are not technologically dynamic in Africa
  • Xinshen Diao of the International Food Policy Research Institute has shown that this growth was led by non-tradable services, in particular construction, transport, and hotels and restaurants. The public sector dominates investment, and the bulk of public investment is financed by foreign grants. Foreign aid has caused the real exchange rate to appreciate,
  • What Rwanda and other African countries lack are the modern, tradable industries that can turn the potential into reality by acting as the domestic engine of productivity growth.
  • Studies show that very few microenterprises grow beyond informality, just as the bulk of successful established firms do not start out as small, informal enterprises.
Gene Ellis

Lethal Malfeasance in Malawi - NYTimes.com - 0 views

www.nytimes.com/...hal-malfeasance-in-malawi.html

shared by Gene Ellis on 05 Jan 14 - No Cached
  • Lethal Malfeasance in Malawi
  • a $50 million corruption scandal
  • Government investigators believe $500 million in donor money was lost to graft during the eight-year reign of Ms. Banda’s predecessor.
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  • Donor states started withholding aid, which makes up 40 percent of the country’s budget.
  • “For every one I have arrested,” she said of government crooks, “I have lost a whole village of votes.”
  • In February the health minister admitted that Malawi’s central medical stores held only 5 percent of the drugs they were supposed to stock.
  • Dr. Chiudzu blamed not corruption but an overcentralized state: The hospital is barred from buying supplies itself, yet the Health Ministry, which holds all the procurement power, is unable to meet needs.
  • Ms. Banda appeared to agree that poor governance was as lethal as corruption. “
Gene Ellis

Irish Charm With Germans Leads Nation Out of Bailout Wilderness - Bloomberg - 0 views

www.bloomberg.com/...-german-love-ends-bailout.html

shared by Gene Ellis on 13 Dec 13 - No Cached
  • Before the new government could go on the offensive, it needed to play defense. It fended off an attack on Ireland’s 12.5 percent corporate tax rate, the cornerstone of an economic policy that transformed Ireland from a financial backwater into a European hub for companies such as Pfizer Inc., the maker of Viagra, and Google Inc.
  • Two days after commencing his premiership, Irish Prime Minister Enda Kenny, 62, became embroiled in what he called a Gallic spat with French President Nicolas Sarkozy after refusing to raise the tax rate in return for an interest-rate cut on aid.
  • “The attitude was: ‘You misbehaved and here’s what you have to do’,’”
  • ...5 more annotations...
  • Within months, the central bank injected more than 1 trillion euros of three-year loans into the region’s banking system
  • The economy emerged from recession in the second quarter, unemployment dropped for six months in a row, and house prices in Dublin are rising again. The yield on 10-year bonds is down to 3.5 percent, lower than Italy and Spain.
  • Noonan then ramped up his efforts to broker a deal on banking debt. He had a consistent line: it was payback time. The government hadn’t imposed losses on senior bank bondholders, preventing contagion spreading across the euro region from the Irish banking crisis.
  • Banks used the cash to buy sovereign debt
  • “The Germans disagree all the time until the very end, and then they agree,” he said. “Once you realize that, you keep talking, you keep chipping away.”
Gene Ellis

Across Eastern Europe, Military Spending Lags - NYTimes.com - 0 views

www.nytimes.com/...ato-and-military-spending.html

military spending europe

shared by Gene Ellis on 03 Apr 15 - No Cached
  • Across Eastern Europe, Military Spending Lags
  • After years in which a combination of fiscal pressures and a complacent trust in the alliance’s protection may have led them to drop their guard,
  • many countries are building from a very limited ability and remain years away from fielding anything resembling a formidable force against a military as large as Russia’s.
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  • NATO asks member states to spend 2 percent of their gross domestic product on their armed forces, yet only a handful of them actually do. Estonia, the small Baltic state at the alliance’s far eastern edge, is one of them, and Poland, by far the largest and richest country on that flank, is at 1.95 percent.
  • Latvia and Lithuania are spending less than 1 percent, though both have indicated they intend to ratchet up to 2 percent by 2020
  • But it will be a decade before the full impact of this modernization is felt in the field, he said.
  • The plan NATO has agreed on — to set up forward supply bases on the alliance’s eastern front in which 4,000 or so troops could be deployed within 48 hours — might be useful in combating a small, stealth insurgency, like the masked gunmen who arrived in Ukraine to set off that crisis, but would be useless in the face of an invasion. “What is required is to be able to hold off any aggression for at least a couple of weeks, to buy some time and provide some sort of sanctuary for reinforcements”
  • In recent years, Russia has massed tens of thousands of troops for exercises just across their borders.
  • When the Baltic states entered NATO a decade ago, they were urged not to spend their limited resources on building large standing armies, but to depend on others in the alliance to come to their aid in an emergency. Instead, the Baltic countries and other former Soviet satellite states focused their military spending on building specialties that they could offer the alliance, such as Estonia’s focus on cybersecurity
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