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Gene Ellis

Europe Eyes Trade Pact With Obama - NYTimes.com - 0 views

rendezvous.blogs.nytimes.com/...ope-eyes-trade-pact-with-obama

europe eyes trade pact obama

shared by Gene Ellis on 08 Nov 12 - No Cached
  • “A car tested for safety in the United States could be sold in Europe without further tests, while a drug deemed safe by Brussels would not have to be approved as well by the U.S. government,” according to a Reuters report that cited examples of the benefits of a free-trade agreement.
Gene Ellis

Bringer of Prosperity or Bottomless Pit? 'Putting the Virtuous in the Dock Rather than ... - 0 views

www.spiegel.de/...ebate-the-euro-a-685018-2.html

shared by Gene Ellis on 09 Jul 12 - No Cached
  • You should look at it more holistically. We wouldn't have been able to increase our exports if the other countries had behaved like us and had not increased their demand for an entire decade.
  • Excluding Greece from the union would be the completely wrong approach. Greece's problem is its inefficiency in terms of public finances. That can be corrected.
  • Starbatty: In my experience, speculators are only successful when political promises diverge from economic reality, as has become clear in Greece.
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  • In the German Council of Economic Experts, we proposed a consolidation pact, under which each country would be required to specify a fully verifiable path that it will follow as it puts its financial house in order. It wouldn't just be a solution for Greece; it would be for everyone.
  • And you seriously believe that would help? Following that approach, the Greeks would save themselves to death, just as the Germans did in the early 1930s under then-Reich Chancellor Heinrich Brüning. What you expect the Greeks to do is Brüning squared. The real problem is that Greece shouldn't have been accepted into the monetary union in the first place.
    • Gene Ellis
      Gene Ellis on 09 Jul 12
       
      An important point:  the role of German policy in allowing 1.3 million short-term workers into the labor market, and its role in lowering the tax on labor.
  • But such a pact would be circumscribed to helping countries help themselves.
  • But government debt is still growing considerably. Doesn't this also increase the risk of inflation? Starbatty: That's what I assume. Inflation would be an elegant means of reducing debt, and many academics are discussing this scenario. But it becomes truly problematic when government bonds eventually lose their status as a safe haven. If China or Japan arrive at this conclusion and sell their bonds, a bubble could burst that is far more dangerous than any other bubble. If that happens, markets will plunge, and interest rates will shoot up.
  • Likewise, when it comes to assistance, I think we have a clear legal framework, according to which neither any member state nor the entire Union can be held liable for the debt of another member state.
  • its 1.3 million short-time workers do not find regular employment again,
  • The European Central Bank would never, ever contemplate using inflation to eliminate debt.
Gene Ellis

Trade: In my backyard | The Economist - 0 views

www.economist.com/...-way-regional-ones-my-backyard

multilateral trade regional

shared by Gene Ellis on 09 Jan 14 - No Cached
  • Multilateral trade pacts are increasingly giving way to regional ones
Gene Ellis

Europe's Two-Speed Future by Jean-Claude Piris - Project Syndicate - 0 views

www.project-syndicate.org/...ed-europe-by-jean-claude-piris

shared by Gene Ellis on 19 Dec 12 - No Cached
  • relatively small size,
  • aging populations,
  • excessive indebtedness
  • ...5 more annotations...
  • insufficient investment in research and development
  • lack of energy resources
  • But the eurozone’s architecture – in which monetary policy is centralized, but budgetary and economic policies are left up to individual governments – is not viable in the long term
  • establishing a “two-speed Europe” – in which a core group of countries pursues deeper integration more quickly than the rest – is the EU’s best option for reaching the level of cooperation needed to escape the crisis intact.
  • Pursuing this option would require that the decision-making process be legitimate. In the Council, as in all cases of “enhanced cooperation,” only participating members have the right to vote. In the European Parliament, by contrast, all 27 EU members participate in the decision-making process, even concerning measures that will affect only the 23 “eurozone plus” countries (the 17 eurozone members and the six that have agreed to the Euro Plus Pact) – a method that could pose a political problem.
Gene Ellis

Tomato Imports Deal Reached by U.S. and Mexico - NYTimes.com - 0 views

www.nytimes.com/...ch-deal-on-tomato-imports.html

tomato imports deal u s mexico

shared by Gene Ellis on 04 Feb 13 - No Cached
  • The agreement, reached late Saturday, raises the minimum sales price for Mexican tomatoes in the United States, aims to strengthen compliance and enforcement, and increases the types of tomatoes governed by the bilateral pact to four from one.
  • “The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products,
  • Florida growers contended it set the minimum price of Mexican tomatoes so low that the Florida growers could not compete.
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  • “Even though no dumping or injury to the U.S. industry was demonstrated by our competitors,
  • The new agreement covers all fresh and chilled tomatoes, excluding those intended for use in processing like canning and dehydrating, and in juices, sauces and purées.
  • It raises the basic floor price for winter tomatoes to 31 cents a pound from 21.69 cents — higher than the price the Mexicans were proposing in October — and establishes even higher prices for specialty tomatoes and tomatoes grown in controlled environments. The Mexicans have invested billions in greenhouses to grow tomatoes, while Florida tomatoes are largely picked green and treated with a gas to change their color.
  • The dispute unfolded in the heated politics surrounding the presidential election, with Mexican growers charging that the Commerce Department was courting voters in the important swing state of Florida. Instead, the timing of the negotiations ensured that the government could win those votes and bring the controversy to a conclusion satisfactory to the Mexicans after the election was over.
  • The Mexicans enlisted roughly 370 American businesses, including Wal-Mart Stores and meat and vegetable producers, to argue their cause.
Gene Ellis

"Which Eurobonds?" by Jeffrey Frankel | Project Syndicate - 0 views

www.project-syndicate.org/...which-eurobonds-

jeffrey project syndicate

shared by Gene Ellis on 16 Jun 12 - No Cached
  • Any solution to the eurozone crisis must meet a short-run objective and a long-run goal. Unfortunately, the two tend to conflict.Illustration by Paul LachineCommentsView/Create comment on this paragraphThe short-run objective is to return Greece, Portugal, and other troubled countries to a sustainable debt path (that is, a declining debt/GDP ratio). Austerity has raised debt/GDP ratios, but a debt write-down or bigger bailouts would undermine the long-term goal of minimizing the risk of similar debt crises in the future.CommentsView/Create comment on this paragraph
  • it is hard to commit today to practice fiscal rectitude tomorrow. Official debt caps, such as the Maastricht fiscal criteria and the Stability and Growth Pact (SGP), failed because they were unenforceable.
  • The introduction of Eurobonds – joint, aggregate eurozone liabilities – could be part of the solution, if designed properly. There is certainly demand for them in China and other major emerging countries, which are desperate for an alternative to low-yielding US government securities.
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  • But Germany remains opposed on moral-hazard grounds: a joint guarantee of Eurozone members’ liabilities would strengthen individual national governments’ incentive to spend beyond their means.
  • The German Council of Economic Experts has proposed a European Redemption Fund (ERF). The plan would convert into de facto 25-year Eurobonds the existing sovereign debt of member countries in excess of 60% of GDP, the threshold specified by the Maastricht criteria and the SGP.
  • But this seems upside down.
  • it offers absolution precisely on the 60%-of-GDP margin where countries will have the most trouble resisting temptation.
  • the main explanation for the absence of US moral hazard is that the right precedent was set in 1841, when the federal government let eight states and the Territory of Florida default.
  • Ever since 1841, the market requires that US states running up questionable levels of debt pay an interest-rate premium to compensate for the default risk.
  • Had the ECB operated from the outset under a rule prohibiting it from accepting SGP-noncompliant countries’ debt as collateral, the entire eurozone sovereign-debt problem might have been avoided.
  • the expansion in the US took place at the federal level, where spending today amounts to 24% of GDP, compared to just 1.2% of GDP for the European Union budget.
  • The version of Eurobonds that might work as the missing long-term enforcement mechanism is almost the reverse of the Germans’ ERF proposal: the “blue bonds” proposed two years ago by Jacques Delpla and Jakob von Weizsäcker. Under this plan, only debt issued by national authorities below the 60%-of-GDP threshold could receive eurozone backing and seniority. When a country issued debt above the threshold, the resulting “red bonds” would lose this status.
  • The point is that the enforcement mechanism would be truly automatic: market interest rates would provide the discipline that bureaucrats in Brussels cannot.
  • Of course, the eurozone cannot establish a blue-bond regime without first solving the problems of debt overhang and troubled banks. Otherwise, the plan itself would be destabilizing, because almost all countries would immediately be in the red.
  • But one thing seems clear. German taxpayers, whose longstanding suspicion of profligate Mediterranean euro members has been vindicated, will not be happy when asked to pay still more for the cause of European integration. At a minimum, they will need some credible reason to believe that 20 years of false assurances have come to an end – that this is the last bailout.
Gene Ellis

Angela Merkel scolds Italy and France over the faltering eurozone recovery | Business |... - 0 views

www.theguardian.com/...ance-eurozone-faltering-growth

shared by Gene Ellis on 05 Feb 15 - No Cached
  • said faltering growth was the direct result of the 18-member currency zone's inability to punish those countries that ran high deficits in contravention of limits set by Brussels.
  • "We have very little, if any, possibility of sanctioning those countries that break the rules," she said.
  • Her comments echoed those of ECB president Mario Draghi, who last month warned that without moves to strengthen the fiscal pact and impose punishments on rule-breaking countries, the eurozone project could flounder.
Gene Ellis

France and Europe: More special pleading | The Economist - 0 views

www.economist.com/...be-italy-more-special-pleading

shared by Gene Ellis on 26 Apr 14 - No Cached
  • Bureaucratic France has 90 public-sector staff per 1,000 people compared to 50 in Germany. Most enjoy almost total job security.
  • France’s serial requests are treated as duplicitous by those who ask why big countries break rules that smaller ones have to obey (a game that first began when France and Germany bust the stability pact in 2002). The Hollande government has already been given one delay
  • Another would mark the third time in seven years that France has missed targets.
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  • The best guess is that France will yet again get its way,
  • France and Europe More special pleading
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