Group items tagged

How Putin Forged a Pipeline Deal That Derailed

The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity.

The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. Continue reading the main story Related Coverage In Diplomatic Defeat, Putin Diverts Pipeline to TurkeyDEC. 1, 2014

Former ECB chief blames governments for euro-crisis

But the 71-year-old French banker said he had warned EU governments of growing economic divergences in the euro area as far back as 2005 and that he had criticised member states, notably France and Germany, for ignoring the deficit and debt rules which underpin the common currency.

Trichet noted that the ECB intervened on bond markets and bought up Greek debt as early as May 2010, when he was still chief and when the first-ever EU bailout was still being drafted. It interevened again in 2011 to buy Italian and Spanish debt when investors started to bet against the larger euro-states.

It’s true that the U.S. economy has grown faster than that of Europe for the past generation. Since 1980 — when our politics took a sharp turn to the right, while Europe’s didn’t — America’s real G.D.P. has grown, on average, 3 percent per year. Meanwhile, the E.U. 15 — the bloc of 15 countries that were members of the European Union before it was enlarged to include a number of former Communist nations — has grown only 2.2 percent a year. America rules!

Or maybe not. All this really says is that we’ve had faster population growth. Since 1980, per capita real G.D.P. — which is what matters for living standards — has risen at about the same rate in America and in the E.U. 15: 1.95 percent a year here; 1.83 percent there.

Broadband, in particular, is just about as widespread in Europe as it is in the United States, and it’s much faster and cheaper.

the ECB gears up to go full throttle into a business that, according to its statutes, is verboten: buying the debt of member states.

The ECB is about to turn into a money machine, into a lender of last resort, and damn the treaties that mandate an inflation-fighting commitment to “price stability”. The magic phrase now is “capping bond yields”, meaning the ECB buys up the debt of Italy and others in order to depress their borrowing costs.

As Per Kurowski, a former executive director of the World Bank, reminds me regularly, crises occur when what was thought to be low risk turns out to be very high risk.

Not least, I would do everything I can to eliminate the idea that the state stands behind investment banking. That is an insane idea.

They had taken to the streets to demand an end to a lecturers' strike that had grounded academic activities in all but two of Nigeria's 78 public universities. The strike was in its third week when the protest took place.

The lecturers' strike, the third in four years, pitted the academics against the owners of Nigeria's public universities - the country's central and state governments.

In the last three years the government of President Goodluck Jonathan, a former university lecturer, has established nine new universities.

The tragedy of Argentina A century of decline

In the 43 years leading up to 1914, GDP had grown at an annual rate of 6%, the fastest recorded in the world.

The country ranked among the ten richest in the world, after the likes of Australia, Britain and the United States, but ahead of France, Germany and Italy.

In the latest example, Portugal's Constitutional Court on Thursday shot down the government's attempts to improve the country's competitiveness by making it easier for companies to shed workers—as demanded under the terms of the country's international bailout. The court ruled against the measures because, it said, they went against the principle of firing workers only when there was just cause.

Courts have been able to thwart some attempts to shrink the state bureaucracy or make the labor force more flexible.

Portugal's 1976 constitution calls for "opening the path to a socialist society." It obliges the state to promote employment, move toward free health and education services and even develop "centers of rest and holiday" for workers.

Russia is making increasing efforts to deter the biggest country in its former empire from looking west and to prod it into joining the rival, Kremlin-led Eurasian Customs Union instead.

Russia restricting Austria's gas supplies

According to the energy regulator E-Control, Gazprom supplied Austria 15 percent less gas than had been previously agreed. Similar issues have hit Poland, which has seen their supplies cut by 45 percent, and Slovakia, which has ten percent less gas than expected for the period.

Poland on Thursday accused Russia's Gazprom of slashing gas deliveries by half, which analysts said was likely aimed at sending a message to the EU amid tensions over the Ukraine conflict.

The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.

Jeffrey E. Garten, the author of “World View: Global Strategies for the New Economy” and a former dean of the Yale School of Management, said that companies “cannot take a risk that the just-in-time system won’t function, because the whole global trading system is based on that notion.” As a result, he said, “they are going to have to have redundancies in the supply chain, like more warehousing and multiple sources of supply and even production.”

In a more regionalized trading world, economists say, China would probably end up buying more of the iron ore it needs from Australia and less from Brazil, and farming out an even greater proportion of its manufacturing work to places like Vietnam and Thailand.

Fundamental to the argument that Spain (or Greece, or anyone else) has a moral obligation to repay in full its debt to Germany are two assumptions. The first assumption is that “Spain” borrowed the money from “Germany”, and that there is a collective obligation on the part of Spain to repay the German collective. The second assumption is that Spain had a choice in what it could do with the German money that poured into the country, and so it must be held responsible for its having mis-used hard-earned german funds.

There was plenty of irresponsible behavior in every country, and it is absurd to think that if German and Spanish banks were pouring nearly unlimited amounts of money into countries at extremely low or even negative real interest rates, especially once these initial inflows had set off stock market and real estate booms, that there was any chance that these countries would not respond in the way every country in history, including Germany in the 1870s and in the 1920s, had responded under similar conditions.

The winners have been banks, owners of assets, and business owners, mainly in Germany, whose profits were much higher during the last decade than they could possibly have been otherwise

Russia puts squeeze on Ukraine, jacks up natural gas prices 40 percent

On Thursday, the International Monetary Fund threw a financial lifeline, agreeing to stump up $14-18 billion as part of a two-year bailout package in exchange for tough economic reforms.

Russia's milk union has asked for a ban on Ukrainian dairy products

Why airlines make such meagre profits

In those six decades passenger kilometres (the number of flyers multiplied by the distance they travel) have gone from almost zero to more than 5 trillion a year. But though the industry has done much to connect the world, it has done little to line the pockets of the airlines themselves. Despite incredible growth, airlines have not come close to returning the cost of capital, with profit margins of less than 1% on average over that period. In 2012 they made profits of only $4 for every passenger carried. Why has a booming business failed to prosper?

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.