The Great Debate UK
from Nicholas Wapshott:
Austerity is a moral issue
Security worker opens the door of a government job center as people wait to enter in Marbella, Spain, December 2, 2011. REUTERS/Jon Nazca
In the nearly five years since the worst financial crash since the Great Depression, the remedy for the world’s economic doldrums has swung from full-on Keynesianism to unforgiving austerity and back.
The initial Keynesian response halted the collapse in economic activity. But it was soon met by borrowers’ remorse in the shape of paying down debt and raising taxes without delay. In the last year, full-throttle austerity has fallen out of favor with those charged with monitoring the world economy.
Christine Lagarde, managing director of the International Monetary Fund, has been urging German Chancellor Angela Merkel, who has been imposing singeing public spending cuts on her neighbors, and George Osborne, Britain’s finance minister, who has been doing the same to the Brits, to ease up. The IMF is now urging fiscal measures beyond monetary easing “to nurture a sustainable recovery and restore the resilience of the global economy.”
from The Great Debate:
How Europe can stave off a crisis
By Gordon Brown
The views expressed are his own.
It was said of European monarchs of a century ago that they learned nothing and forgot nothing. For three years, as a Greek debt problem has morphed into a full blown euro area crisis, European leaders have been behind the curve, consistently repeating the same mistake of doing too little too late. But when they meet on Sunday, the time for small measures is over. As the G20 found when it met in London at the height of the 2009 crisis, only a demonstration of policy intent that shows irresistible force will persuade the markets that leaders will do what it takes. An announcement on a new Greek package will not be enough. Nor will it be sufficient to recapitalize the banks. European leaders will have to announce a comprehensive -- around 2 trillion euro -- finance facility; set out a plan to fundamentally reform the euro; and work with the G20 to agree on a coordinated plan for growth.
For three years it has suited leaders across Europe to disguise Europe’s banking problems and, citing the blatant profligacy of Greece, they have defined the European problem as simply a public sector debt problem. And it has suited Europe’s leaders to call for austerity (and if that fails, more austerity) and forget how the inflexibility of the euro is itself dampening prospects for growth, keeping unemployment unacceptably high and weakening Europe’s competitive position in the world today. Indeed, Europe’s share of world output has now fallen to just 18 percent. And it is a measure of how it is losing out in the growth markets of the future that just 7.5 percent of Europe’s exports go to the emerging markets that are responsible for 70 percent of the world’s growth.
from The Great Debate:
A tale of two rape charges
By Naomi Wolf
The opinions expressed are her own.
With the arrest of Dominique Strauss-Kahn, then Managing Director of the International Monetary Fund, New York City has abruptly become the scene of two very different official approaches to investigating sex-crime cases, one traditional and one new. The new approach so far appears to be reserved for Strauss-Kahn alone.
Consider the first case: the ongoing trial of two police officers, Kenneth Moreno and Franklin Mata, charged in the rape of a 27-year-old Manhattan woman. She was drunk, and, after helping her to enter her apartment, Moreno and Mata allegedly made a false emergency call so that they could return to her. At that point, the woman says, she woke periodically out of her intoxicated state to find herself being raped, face down, by Moreno, as Mata stood guard.
from Breakingviews:
Global economy not as healthy as it looks
By Hugo Dixon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The global economy is not as healthy as it looks. The International Monetary Fund now predicts 4.4 percent growth for 2011. But inflation has reared its ugly head across the globe, suggesting that many economies are growing faster than can be sustained without structural changes. Spurring on reform should be the main focus of the annual World Economic Forum shindig this week in Davos.
What’s next in EMU after Greece deal?
-Jane Foley is research director at Forex.com. The opinions expressed are her own.-
The European Union has finally agreed that an Economic and Monetary Union member country in serious fiscal difficulties will be able to receive bi-lateral assistance from its Eurozone partners as well as draw support from the International Monetary Fund.
Too soon to predict that EMU will wobble
-Jane Foley is research director at Forex.com. The opinions expressed are her own.-
The budget crisis facing the Greek government has drawn an array of comments and responses from various parts of the European Central Bank, the European Commission, the International Monetary Fund and the financial markets.
from The Great Debate:
G20 ends Anglo-Saxon era
-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --
Thursday's G20 summit may not mark the end or even the beginning of the end of the global recession. It did mark the end of the ascendancy of the unfettered, Anglo-Saxon model of capitalism.
What comes next is far from sure, but it will be different from the headlong dash for individual enrichment, short-term profit and financial acrobatics that began with the dominance of U.S. President Ronald Reagan and British Prime Minister Margaret Thatcher in the 1980s. The widespread acceptance of increased regulation would have been anathema for U.S. President Barack Obama's predecessors.
from The Great Debate:
“Truman doctrine” could boost IMF firepower
-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --
The day before he returned to the U.S. Treasury for six weeks to help the understaffed Obama administration, Edwin Truman published a proposal to give the International Monetary Fund more firepower to fight the financial crisis.
Truman's idea -- a one-off $250 billion allocation of Special Drawing Rights (SDRs) to IMF member states -- looks like the quickest way to put a safety net under developing countries and avert financial contagion. The Group of 20 world leaders should embrace it at the meeting in London on April 2.
from The Great Debate:
Buck-passing augurs ill for G20 summit
-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --
The foreplay to next month's G20 summit is degenerating into a buck-passing exercise rather than crafting a Grand Bargain to save the world economy and regulate capitalism.
The industrialized powers do not agree on how to arrest the steep slide in output, how to handle collapsing banks, how much market regulation is needed, how to reach a world trade deal and prevent protectionism, or how to redistribute power to emerging nations in exchange for their money.
