Most European leaders have nothing against using the central bank's reserves as a source of financing, as became evident at the Cannes summit. Important politicians like European Council President Herman Van Rompuy and French President Sarkozy proposed making IMF "special drawing rights" available
'Run For Your Lives': Printing Money with the IMF - SPIEGEL ONLINE - 0 views
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It appears that the euro crisis is approaching its endgame. Many promises made when the common currency was introduced have already been broken. The initial stipulation that only stable countries be allowed in, for example, quickly proved illusory once Italy and Greece were accepted.
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German taxpayers were also promised that they would never be held liable for the debts of other countries in the euro zone. But then came the first and second bailout packages for Greece and the European bailout fund.
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Nato defence spending falls despite promises to reverse cuts - BBC News - 0 views
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Nato defence spending falls despite promises to reverse cuts
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Europe's failure to pay its way in Nato is seriously worrying the US, which already provides 75% of all Nato defence expenditure (the US spends 3.8% of its GDP on defence).
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Without any of its own maritime patrol aircraft, the UK recently had to request the help of Nato allies to search for suspected Russian submarines off the west coast of Scotland. In Germany there have been reports of serious malfunctions in military equipment.
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Italy Falls Back Into Recession, Raising Concern for Eurozone Economy - NYTimes.com - 0 views
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Italy Falls Back Into Recession, Raising Concern for Eurozone Economy
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Some economists argue that the region is already well into a so-called lost decade.
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Analysts surmised that the strained relations with Russia as well as turmoil in the Middle East had undercut demand for Italian exports, in particular fashion and other luxury goods.
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Dani Rodrik on the promise and peril of social-science models. - Project Syndicate - 0 views
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We have neither the mental capacity nor the understanding to decipher the full web of cause-and-effect relations in our social existence. So our daily behavior and reactions must be based on incomplete, and occasionally misleading, mental models.
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Social scientists – and economists in particular – analyze the world using simple conceptual frameworks that they call “models.”
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Useful social-science models are invariably simplifications. They leave out many details to focus on the most relevant aspect of a specific context.
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Insight: Brazil's iPhone investment falls short on promises of jobs, lower prices - Cha... - 0 views
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Insight: Brazil's iPhone investment falls short on promises of jobs, lower prices
Euro zone, IMF agree on Greece aid deal - The Washington Post - 0 views
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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.
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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.
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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.
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The Eurocrisis Can Easily Flare Up Again - Seeking Alpha - 0 views
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It is clear for all that they will also have to swallow cuts, but for this to take place, politicians have to break promises, the ECB has to break the law, and the IMF has to do something rather unprecedented. None of this is easy, to put it mildly.
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Recently, there was a new EU/IMF/ECB 'agreement' that won't fare any better.
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Basically, we're lending Greece more in order for it to keep the appearance that it is servicing and paying of the debt.
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Car Factories Offer Hope for Spanish Industry and Workers - NYTimes.com - 0 views
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Four years of economic turmoil and the euro zone’s highest jobless rate have made the Spanish labor market so inviting — an estimated 40 percent less expensive than those of Europe’s other biggest car-making countries, Germany and France — that Ford and Renault recently announced plans to expand their production in Spain.
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Some experts say such gains in competitiveness and investment are exactly what Spain needs for its economy to recover and to remove any doubts about whether the country can remain in the euro union.
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Because Spain no longer has its own currency to devalue as a way to lower the price of its exports, it is having to find its competitive advantage in lower labor costs. Many economists have argued that societies cannot survive such painful downward adjustments.
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The Electric Car's Short Circuit by Bjørn Lomborg - Project Syndicate - 0 views
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Recent research indicates that electric cars may reach break-even price with hybrids only in 2026, and with conventional cars in 2032, after governments spend €100-150 billion in subsidies.
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A life-cycle analysis shows that almost half of an electric car’s entire CO2 emissions result from its production, more than double the emissions resulting from the production of a gasoline-powered car.
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Proponents proudly proclaim that if an electric car is driven about 300,000 kilometers (180,000 miles), it will have emitted less than half the CO2 of a gasoline-powered car. But its battery will likely need to be replaced long before it reaches this target, implying many more tons of CO2 emissions.
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George Soros: how to save the EU from the euro crisis - the speech in full | Business |... - 0 views
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The crisis has also transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of equal states but the crisis has turned it into a hierarchy with Germany and other creditors in charge and the heavily indebted countries relegated to second-class status. While in theory Germany cannot dictate policy, in practice no policy can be proposed without obtaining Germany's permission first.
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Italy now has a majority opposed to the euro and the trend is likely to grow. There is now a real danger that the euro crisis may end up destroying the European Union.
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The answer to the first question is extremely complicated because the euro crisis is extremely complex. It has both a political and a financial dimension. And the financial dimension can be divided into at least three components: a sovereign debt crisis and a banking crisis, as well as divergences in competitiveness
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How Apple and Other Corporations Move Profit to Avoid Taxes - NYTimes.com - 0 views
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It got so bad that late last year Starbucks promised to pay an extra £10 million — about $16 million — in 2013 and 2014 above what it would normally have had to pay in British income taxes. What it would normally have paid is zero, because Starbucks claims its British subsidiary loses money. Of course, that subsidiary pays a lot for coffee sold to it by a profitable Starbucks subsidiary in Switzerland, and pays a large royalty for the right to use the company’s intellectual property to another subsidiary in the Netherlands. Starbucks said it understood that its customers were angry that it paid no taxes in Britain.
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“It is easy to transfer the intellectual property to tax havens at a low price,” said Martin A. Sullivan, the chief economist of Tax Analysts, the publisher of Tax Notes. “When a foreign subsidiary pays a low price for this property, and collects royalties, it will have big profits.”
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it is especially hard for countries to monitor prices on intellectual property, like patents and copyrights.
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Bringer of Prosperity or Bottomless Pit? 'Putting the Virtuous in the Dock Rather than ... - 0 views
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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.
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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.
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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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Europe's banking union: Till default do us part | The Economist - 0 views
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Almost a year ago, as the euro crisis raged, Europe’s leaders boldly pledged a union to break the dangerous link between indebted governments and ailing banking systems, where the troubles of one threatened to pull down the other.
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Almost everyone involved agrees that in theory a banking union ought to have three legs.
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a single supervisor
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An interview with Athanasios Orphanides: What happened in Cyprus | The Economist - 0 views
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Cyprus had developed its financial center over three decades ago by having double taxation treaties with a number of countries, the Soviet Union for example. That means if profits are booked and earned and taxed in Cyprus, they are not taxed again in the other country. Russian deposits are there because Cyprus has a low corporate tax rate, much like Malta and Luxembourg, which annoys some people in Europe.
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In addition, Cyprus has a legal system based on English law and follows English accounting rules
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This government took a country with excellent fiscal finances, a surplus in fiscal accounts, and a banking system that was in excellent health. They started overspending, not only for unproductive government expenditures but also they raised implicit liabilities by raising pension promises, and so forth.
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How to Get a Job at Google - NYTimes.com - 0 views
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How to Get a Job at Google
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noted that Google had determined that “G.P.A.’s are worthless as a criteria for hiring, and test scores are worthless. ... We found that they don’t predict anything.”
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“Good grades certainly don’t hurt.” Many jobs at Google require math, computing and coding skills, so if your good grades truly reflect skills in those areas that you can apply, it would be an advantage.
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The third great wave | The Economist - 0 views
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The third great wave
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A third great wave of invention and economic disruption, set off by advances in computing and information and communication technology (ICT) in the late 20th century, promises to deliver a similar mixture of social stress and economic transformation
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Powerful, ubiquitous computing was made possible by the development of the integrated circuit in the 1950s
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Productivity: Technology isn't working | The Economist - 0 views
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Technology isn’t working
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Technology isn’t working
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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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The Greek Austerity Myth by Daniel Gros - Project Syndicate - 0 views
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The Greek Austerity Myth
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Greece actually spends less on debt service than Italy or Ireland, both of which have much lower (gross) debt-to-GDP ratios. With payments on Greece's official foreign debt amounting to only 1.5% of GDP, debt service is not the country's problem.
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The new Greek government's argument that this is an unreasonable target fails to withstand scrutiny. After all, when faced with excessively high debt, other European countries – including Belgium (from 1995), Ireland (from 1991), and Norway (from 1999) – maintained similar surpluses for at least ten years each, typically in the aftermath of a financial crisis.
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