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Tuesday, November 29, 2016

Tsipras: "Οι Αγορές θα χορεύουν" : Full Show: Surveillance (11/28) - Bloomberg

Full Show: Surveillance (11/28) - Bloomberg

At 33 mins of the programme Joseph Ouhgourlian : Amber Capital Fund … bullish on S.Europe’s prospects …

“ 2 scenarios: 1 get 2nd review and Debt relief … This gvrnmt has changed quite radically… Tsipras is very intent in getting reforms done,  …you could see some positive surprises” …


Greece - Economic forecast summary (November 2016) - OECD

Greece - Economic forecast summary (November 2016) - OECD

Wednesday, November 16, 2016

German Council of Economic Experts | Annual Report 2016/17

kurzfass_eng_2016_17.pdf

from the Eecutive Summary

Reforms for Europe
5. Given increasing centrifugal forces within the EU, the principle of subsidiarity
must be reinvigorated. Stronger integration is desirable in some areas such
as climate and asylum policy and internal security. Fiscal, labour market and social
policy, however, should remain the responsibility of the member states.
6. The internal market with the four fundamental freedoms – the free movement
of goods, services, capital and persons – represents a core element of the
EU. These should not be called into question. A delayed integration of EU migrants
into social security systems would, however, be appropriate. A strengthening
of the single market through improved market access in the services sector
is desirable. However, no comprehensive harmonisation and standardisation of
entire legal areas should be derived from internal market competence.
Executive Summary – Time for reforms
2 German Council of Economic Experts – Annual Report 2016/17
7. Trade policy clearly falls into the EU’s responsibility. Protectionist trends
should be staved off. They severely diminish prosperity. The EU should conclude
the Comprehensive Economic and Trade Agreement (CETA) with Canada
and the Transatlantic Trade and Investment Partnership (TTIP) with the USA.
8. Given the global effect of greenhouse gases, a global approach to climate policy
is needed, or at least an EU-wide approach. So far, Germany's energy transition
has delivered sobering results. The economic costs are high, yet its contribution
to reducing climate change is moderate. This experience reveals the drawbacks
of a purely national approach to climate policy.
9. As the euro area lacks nominal exchange rates as an adjustment mechanism
between member states, it is important to ensure that the necessary adjustments
are achieved through other mechanisms. For this reason, further structural reforms
are needed that facilitate more flexible wage and price formation
and increase labour mobility.
10. In light of the macroeconomic developments, the extent of the ECB’s quantitative
easing and the resulting low interest rates are neither appropriate for the
euro area nor Germany. In their monetary policy decisions, the ECB should take
greater account of less volatile price indices, such as the GDP deflator and core
inflation. Given the risks monetary policy poses to financial stability and member
states' willingness to pursue consolidation and reform, it would be better to
slow down bond purchases and end them earlier.
11. The repeated turbulence in the European financial sector shows that the sector is
still not sufficiently resilient to shocks. Many major euro area banks in particular
are still not adequately capitalised. The GCEE considers a leverage ratio
of at least 5% appropriate.
12. Preconditions for a common European deposit guarantee scheme are not
currently met. First of all, risks in the banking system need to be reduced, effective
European supervision and resolution need to be ensured, and regulatory
privileges of sovereign exposures in banking regulation need to be phased out. In
the medium term, an integrated financial supervisor should be established
outside of the ECB.
13. The European fiscal rules should finally be enforced. It remains important to
strengthen the crisis mechanism, as another flare-up of the euro area crisis cannot
be ruled out. This requires a mechanism for restructuring government
debt in the event of crisis. The GCEE has developed a detailed proposal.
It calls for private sector involvement in crisis resolution, which could help to restore
the credibility of the no-bailout clause.

Monday, November 14, 2016

Branko Milanovic | The greatest reshuffle of individual incomes since the Industrial Revolution | VOX, CEPR’s Policy Portal

The greatest reshuffle of individual incomes since the Industrial Revolution | VOX, CEPR’s Policy Portal

The effects of of globalisation on income distributions in rich countries have been studied extensively. This column takes a different approach by looking at developments in global incomes from 1988 to 2008. Large real income gains have been made by people around the median of the global income distribution and by those in the global top 1%. However, there has been an absence of real income growth for people around the 80-85th percentiles of the global distribution, a group consisting of people in ‘old rich’ OECD countries who are in the lower halves of their countries’ income distributions.

Saturday, October 15, 2016

Can liberal values be absolute? Or is that a contradiction? | Aeon Ideas

Can liberal values be absolute? Or is that a contradiction? | Aeon Ideas

 liberalism an idea fit only for the contemporary West, proper to this particular historical, social and geographical context? Or is liberalism right for everyone, for all peoples and ages and cultures? That is to say, should liberal values be seen as relative or absolute?
In fact, the answer is neither. It is possible to steer between localist relativism on the one hand and ahistorical absolutism on the other...

Friday, October 7, 2016

Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash by Ronald Inglehart, Pippa Norris :: SSRN

Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash by Ronald Inglehart, Pippa Norris :: SSRN

Abstract:      
Rising support for populist parties has disrupted the politics of many Western societies. What explains this phenomenon? Two theories are examined here. Perhaps the most widely-held view of mass support for populism -- the economic insecurity perspective -- emphasizes the consequences of profound changes transforming the workforce and society in post-industrial economies. Alternatively, the cultural backlash thesis suggests that support can be explained as a retro reaction by once-predominant sectors of the population to progressive value change...

Tuesday, October 4, 2016

Are Special Interests Dooming the Euro to Fail? -

Are Special Interests Dooming the Euro to Fail? -

As the Eurozone struggles to stave off a lingering economic crisis, four economists debate the measures necessary to ensure its survival and what’s preventing them from being implemented.

Thursday, September 29, 2016

Simon Wren-Lewis : A General Theory of Austerity (pdf)

BSG-WP-2016-014.pdf

Abstract
Austerity is defined as a fiscal contraction that causes a significant increase in aggregate unemployment. For the
global economy, or an economy with a flexible exchange rate, or a monetary union as a whole, an increase in
unemployment following a fiscal consolidation can and should be avoided because monetary policy can normally
offset the demand impact of the consolidation. The tragedy of global austerity after 2010 was that fiscal
consolidation was not delayed until monetary policy was able to do this. 

Friday, September 23, 2016

Short of Lying. The prevalence of bullshit in political communication

Short of Lying. The prevalence of bullshit in political communication



... all the key contributors to the debate agree that political
communication is one of the main contexts in which the phenomenon occurs.
Frankfurt (2005: 22) singles out politics as one of his prime suspects from where to
expect continuous emanation of bullshit...

Wednesday, September 21, 2016

FRB: IFDP Note: Debt Statistics a la Carte: Alternative Recipes for Measuring Government Indebtedness

FRB: IFDP Note: Debt Statistics a la Carte: Alternative Recipes for Measuring Government Indebtedness

1. Introduction
According to Eurostat, the Greek government owed Euro 317 billion in debt at the end of 2014. This is equivalent to more than 177% of GDP, 387% of tax revenue and amounts to almost Euro 30,000 per person. This seems like a very large sum. For comparison, of the other highly indebted European countries that received financial assistance, Portuguese government debt amounted to 130% of GDP while Irish government debt amounted to 110% of GDP.
As a result of these large debt numbers, there have been increasing calls for debt relief to be offered to Greece and, in some cases, also to the other highly indebted countries of Europe......

EconPapers: The Pitfalls of External Dependence: Greece, 1829-2015

EconPapers: The Pitfalls of External Dependence: Greece, 1829-2015

Abstract: Two centuries of Greek debt crises highlight the pitfalls of relying on external financing. Since its independence in 1829, the Greek government has defaulted four times on its external creditors - with striking historical parallels. Each crisis is preceded by a period of heavy borrowing from foreign private creditors. As repayment difficulties arise, foreign governments step in, help to repay the private creditors, and demand budget cuts and adjustment programs as a condition for the official bailout loans. Political interference from abroad mounts and a prolonged episode of debt overhang and financial autarky follows. We conclude that these cycles of external debt and dependence are a perennial theme of Greek history, as well as in other countries that have been "addicted" to foreign savings.

Friday, September 2, 2016

Farmer & Platonov : Reinventing IS-LM to explain secular stagnation | VOX, CEPR’s Policy Portal

Reinventing IS-LM to explain secular stagnation | VOX, CEPR’s Policy Portal

Friday, August 19, 2016

Monday, July 25, 2016

Labour market recovery since the Great Recession | VOX, CEPR’s Policy Portal

Labour market recovery since the Great Recession | VOX, CEPR’s Policy Portal

Sunday, July 24, 2016

Lies, Liars, and Lawlessness by Project Syndicate - Project Syndicate

Lies, Liars, and Lawlessness by Project Syndicate - Project Syndicate



The age of Erdoğan, Trump, and Putin, with its representatives’ contempt for rules and norms, is generating serious challenges to global peace and prosperity with alarming frequency. Is there a way forward that doesn’t lead backward?

Friday, July 22, 2016

A mechanism proposal for Eurozone sovereign debt restructuring | VOX, CEPR’s Policy Portal

A mechanism proposal for Eurozone sovereign debt restructuring | VOX, CEPR’s Policy Portal



Wednesday, July 13, 2016

Maximum sustainable debt: A new measure | VOX, CEPR’s Policy Portal

Maximum sustainable debt: A new measure | VOX, CEPR’s Policy Portal

This column presents a new measure of government debt – maximum sustainable debt. This measure takes account of the fact that a shortfall in growth naturally increases the probability of default, while allowing for the possibility of rollover. Applications to recent data suggest that without sufficient institutional constraints, governments will generally borrow up to a level close to the maximum that can be sustained.

... Regulatory Capture and Reform | RegBlog

A Resource List on Regulatory Capture and Reform | RegBlog

Thursday, July 7, 2016

Sensitivity to group size in policy decision-making | VOX, CEPR’s Policy Portal

Sensitivity to group size in policy decision-making | VOX, CEPR’s Policy Portal

Evidence shows that individuals often do not act in a completely selfish manner, but rather take into account the welfare of other parties when making decisions. But how decision-makers trade off costs and benefits when the costs are dispersed among many individuals is unclear. 

Monday, June 27, 2016

Making the Eurozone more resilient: What is needed now and what can wait? | VOX, CEPR’s Policy Portal

Making the Eurozone more resilient: What is needed now and what can wait? | VOX, CEPR’s Policy Portal

Britain voted to leave the EU. This is terrible news for the UK, but it is also bad news for the Eurozone. Brexit opens the door to all sorts of shocks, and dangerous political snowball effects. Now is the time to shore up the Eurozone’s resiliency. The situation is not yet dire, but prompt action is needed. This VoxEU column – which is signed by a wide range of leading economists – identifies what needs to be done soon, and what should also be done but can probably wait if markets are patient. 


Brad DeLong reacts 



Further reaction from Paul Krugman

Monday, June 13, 2016

Avoiding another Eurozone Crisis: Part I | VOX, CEPR’s Policy Portal

Avoiding another Eurozone Crisis: Part I | VOX, CEPR’s Policy Portal



Mike Wickens 07 June 2016

A New Start for the Eurozone: Dealing with Debt | VOX, CEPR’s Policy Portal

A New Start for the Eurozone: Dealing with Debt | VOX, CEPR’s Policy Portal



This report, the first in the Monitoring the Eurozone series, addresses the measures Eurozone countries need to take to guard against returning financial instability that could threaten a sustainable recovery. The authors consider stock operations, lending structures and regulatory changes in protecting sovereign debt on a national and Europe-wide level.

check  second report too
 the authors propose a package of institutional changes that can help to restore growth and prosperity to the Eurozone, whilst at the same time being politically feasible. 

Tuesday, May 24, 2016

The Lisbon Council -"BRIEF The Euro Plus Monitor Spring 2016"

The Lisbon Council - think tank for the 21st century - News & Events



‘Shattering fragile confidence by a confrontation with
lenders was a costly mistake.’

Focus: The Greek Tragedy

Since the first edition of The Euro Plus Monitor appeared
in 2011, Greece has featured prominently in three separate
ways:
1. According to the analysis, Greece did face and
still faces the worst fundamental problems in the
eurozone, usually coming last in the Fundamental
Health Indicator (see, for example, The 2015 Euro Plus
Monitor).
2. Under the pressure of crisis, Greece adjusted fast from
2010 onwards. It slashed its fiscal deficit, external deficit
and labour costs faster than most other countries in the
sample while legislating serious structural reforms. As
a result, it usually took the top spot in the Adjustment
Progress Indicator.
3. We repeatedly criticised the composition of the Greek
adjustment programme. In its design – and even
more in its implementation – it focussed too much
on suppressing demand through front-loaded fiscal
tightening rather than raising supply through fast
labour, product and services markets reforms. In the
fiscal sphere, the emphasis was too much on hiking
taxes rather broadening the tax base.
Although Greece went through more pain than necessary,
its adjustment programme did work in the end. The
recovery set in over the course of 2014. In late 2014, Greek
corporate confidence had rebounded so fast that it even
exceeded that of Spain. In 2015, the Spanish economy
expanded by some 3.2%. Greece could have achieved the
same. Unfortunately, the risk of reform reversals, which
we had identified as the worst remaining risk for the
eurozone in The 2014 Euro Plus Monitor, materialised with
a vengeance in Greece.
With the rise of political uncertainty in late 2014, capital
started to flee the country. With threats to reverse many
reforms and a confrontational approach versus the only
willing lenders Greek had, the new Greek government that
came to power in January 2015 exacerbated the situation.
Until the end of the tenure of Yanis Varoufakis as finance
minister in mid-2015, capital flight through the banking
system as recorded in Greece’s balances in the Target2
payments system reached €66 billion, equivalent to 37% of
Greek GDP.
For a country that had just emerged from one of the worst
adjustment recessions on record in Western economies,
shattering fragile confidence by a full-blown confrontation
with the country’s only willing lenders proved to be a costly
disaster. Rarely before has corporate confidence plunged so
fast and so badly in any self-inflicted disaster (see Chart 7
below).
The damage is substantial. Counting only the fiscal costs,
we come up with a rough guesstimate for 2015 and 2016:
• Lost growth: Instead of expanding by around 3% in
2015 and 2016, the Greek economy contracted by 0.3%
in 2015. After a weak first quarter (-0.4% qoq), even
a modest rebound later this year will not lead to any
significant gain in annual real GDP. For 2016, Greek
real GDP will be roughly 6.5% below what it could have
been otherwise.
• Lost revenues: Lower tax revenues and extra spending
will likely lead to a cumulative fiscal shortfall of at
least €8 billion for 2015 and 2016 relative to a baseline
of unchanged policies and the absence of a political
confidence shock. Although tax hikes and an increase in
arrears hide a significant part of the fiscal damage, these
corrective measures in themselves pose a burden.
• Weaker banks: Te need to recapitalise the badly
weakened banks and the prospect of much lower
potential revenues from a future privatisation of banks
after the massive dilution of the public sector’s share in
Corporate confidence in Greece and the eurozone (excluding Greece).
Weighted average of confidence in industry, services, retail trade and
construction
Sources: European Commission, Berenberg calculations
Chart 7. The Varoufakis Effect
Greek versus eurozone corporate confidence
-50
-40
-30
-20
-10
0
10
20
30
2006 2008 2010 2012 2014 2016
Greece
Eurozone (excluding Greece)
18 The Euro Plus Monitor Spring 2016 Update
‘For countries thinking of reform reversals, the Greek
experience provides a stark warning.’
the banks probably amounts to a fiscal hit of at least €12
billion and possibly significantly more.
Lower real GDP, a slightly lower GDP deflator in response
to renewed recession, the extra fiscal hit and the sizeable
loss of potential privatisation revenues add up to the
equivalent of at least 25% of Greece’s likely 2016 GDP.
Without the confidence shock that derailed the Greek
recovery, the outlook for Greece’s debt-to-GDP ratio could
have been significantly less challenging.
Fortunately, history moves on. After Greece ratified a new
agreement with its international lenders in the summer
of 2015, corporate confidence recovered somewhat. But
shattered trust is difficult to rebuild. Even a chastened
Greek government without Mr Varoufakis has hesitated to
fully implement the obligations it signed up to in August
2015. As a result, the risk of a renewed confrontation with
creditors continues to weigh on confidence. We view this
pervasive uncertainty as the single most important obstacle
for an investment-led rebound in Greece. If Greece and
its creditors can now conclude the first review of the new
Greek programme successfully and in a way that inspires
confidence, a fading of such uncertainty may lay the basis
for a return to growth in Greece later this year.
Unfortunately, the compromise shaping up between
creditors and the current Greek government may once
again be biased towards tax hikes rather than a simpler tax
system and faster pro-growth structural reforms to unlock
the country’s significant supply potential.
To return to sustained growth and ease the heavy burden
that currently has to be borne by the Greek population,
Greece would need
• a firm political commitment to stay in the euro and work
with rather than against creditors; and
• substantial deregulation as detailed in the August 2015
agreement with creditors.
Like other countries with weak administrative capacities,
Greece could also benefit immensely from simpler rather
than higher taxes in order to improve economic efficiency,
growth potential and the tax take. It would have been and
still is an ideal candidate for a flat tax on income and sales
coupled with an offer to bring undeclared income and
assets into the open against a measured penalty.
Chances are that a new agreement between Greece and its
creditors can help the country return to growth later this
year. For other governments thinking of reform reversals,
the Greek experience should provide a stark warning:
in a still fragile situation, policy mistakes that shatter
confidence can be quite costly indeed.

Greece : Preliminary Debt Sustainability Analysis-Updated Estimates and Further Considerations

Greece : Preliminary Debt Sustainability Analysis-Updated Estimates and Further Considerations



Και το σημείωμα του Γιώργου Στρατόπουλου στο Protagon 24/5/16

Saturday, May 21, 2016

Greece: Debt Sustainability Summary Note

via FT Brussels Blog



IMF-Greece

"...achieving sustainability requires maintaining gross financing needs at very low levels for a prolonged period to allow debt to decline sufficiently before Greece can return to markets on a larger scale.."

Wednesday, May 11, 2016

ΚΕΠΕ (2014) : ∆ΙΟΙΚΗΤΙΚΗ ΜΕΤΑΡΡΥΘΜΙΣΗ ΚΑΙ ΛΕΙΤΟΥΡΓΙΚΟΣ ΕΚΣΥΓΧΡΟΝΙΣΜΟΣ ΤΩΝ ΑΣΦΑΛΙΣΤΙΚΩΝ ∆ΟΜΩΝ (pdf)

via Γιώργος Στρατόπουλος στο Protagon



00.Deliv.1.1

1.1 Εισαγωγή

Το υφιστάµενο σύστηµα κοινωνικής ασφάλισης αποτελείται από µία πολύπλοκη θεσµική
δοµή, η οποία παρ’ όλες τις βελτιώσεις που έχει δεχθεί διαχρονικά, δηµιουργεί σοβαρά
εµπόδια στην αποδοτική λειτουργία του. Ένα βασικό πρόβληµα είναι η εµπλοκή πολλών,
διαφορετικών και ορισµένες φορές µε διαφορετικές επιδιώξεις νοµικών προσώπων.

Tuesday, May 10, 2016

Loewenstein and Chater : "The under-appreciated drive for sense-making

1-s2.0-S0167268115002838-main.pdf

This paper draws attention to a powerful human motive that has not yet been incorporated
into economics: the desire to make sense of our immediate experience, our life, and our
world. We propose that evolution has produced a ‘drive for sense-making’ which motivates
people to gather, attend to, and process information in a fashion that augments, and complements,
autonomous sense-making. 

Eurogroup meeting, 09/05/2016 - Consilium

Eurogroup meeting, 09/05/2016 - Consilium

Saturday, May 7, 2016

Is Greek public debt unsustainable? | Bruegel

Is Greek public debt unsustainable? | Bruegel

Greek public debt does not look sustainable if the country has to return to market borrowing at the end of the third bail-out programme, but could be sustainable if preferential ESM funding continues in the long-term. Our advice is to offer hope for Greece in the form of delayed fiscal adjustment toward a target of 2.5% of GDP primary balance and adopt various measures to ease the debt burden, for the benefit of both Greece and its official lenders.

  AND 

Thursday, May 5, 2016

Health at a Glance 2015: OECD Indicators

Health at a Glance 2015: OECD Indicators

ESMT : "Where did the Greek bailout money go?"

Where did the Greek bailout money go? ESMT No. WP–16–02
"This paper provides a descriptive analysis of where the Greek bailout money went since 2010 and finds that, contrary to widely held beliefs, less than €10 billion or a fraction of less than 5% of the overall programme went to the Greek fiscal budget. In contrast, the vast majority of the money went to existing creditors in the form of debt repayments and interest payments. "

ΣΣ. Δεν έκαναν τον κόπο οι ερευνητές να βρουν ποιοι ήταν οι "existing creditors" και τί μερίδια των 300 δισ περίπου κατείχαν το 2010.   Έτσι κάποιοι απλοϊκοί συμπεραίνουν οτι " Τα υπόλοιπα διοχετεύτηκαν υπέρ… των ευρωπαϊκών τραπεζών. " 

Tuesday, April 12, 2016

Στρατόπουλος : "Η ακτινογραφία του Ασφαλιστικού"

Η ακτινογραφία του Ασφαλιστικού | Protagon.gr

"Σε 14 ενότητες όλα όσα θεμελιώδη πρέπει να γνωρίζουμε για το Ασφαλιστικό μας σύστημα: οι δυσλειτουργίες και τα αίτια της κατάρρευσης, η ιστορική εξέλιξη των βασικών μεγεθών από το 1995, τα σημερινά οικονομικά και δημογραφικά στοιχεία, οι μελλοντικοί κίνδυνοι, η σύγκριση με άλλες χώρες. ...." 

Monday, April 11, 2016

Ethnographies of Austerity: Temporality, Crisis and Affect in Southern Europe

Ethnographies of Austerity: Temporality, Crisis and Affect in Southern Europe

Daniel M. Knight & Charles Stewart



We argue for the empirical study of crisis that captures the decisions or non-decisions that people make, and the actual temporal processes by which they judge responses. We conclude that modern linear historicism is often overridden in such moments by other historicities,
showing that in crises, not only time, but history itself as an organizing structure and set of expectations, is up for grabs.

Saturday, April 9, 2016

J.Baron & E.McCaffery :Thinking About Tax (pdf)

via Stian Reimers in Commentary : "When it comes to tax, how do we decide what’s fair?" 



Baron-McCaffery-2006.pdf

"This article reports the findings of several experiments about perceptions of various
aspects of tax-law design. The authors find that people are vulnerable to a wide
range of heuristics and biases in evaluating public finance systems, leading to
inconsistent judgments and evaluations. These errors in judgment are specific
instances of a more general isolation effect, whereby people respond quickly to a
decision or choice set, focusing on salient aspects while ignoring or underusing
logically relevant information that is not immediately before them. In tax and public
finance, this tendency to make decisions as if with blinders on is problematic. As a
result of it, skillful politicians can manipulate public opinion, and tax system design
can be volatile on account of the possibility of eliciting preference reversals through
purely formal rhetorical means. More troubling, the findings suggest a likely and
persistent wedge between observed and optimal public finance."

Friday, April 8, 2016

Peter Bofinger : "Two views of the EZ Crisis"

Two views of the EZ Crisis: Government failure vs market failure | VOX, CEPR’s Policy Portal

Diagnosing the EZ Crisis is a critical first step towards developing a consensus on how the monetary union should be fixed. This column contrasts views that place the blame mostly on markets with those that place the onus on governments. The fixes necessary for the survival of the euro are – correspondingly – more ‘market discipline’ or ‘political discipline’ exerted at the European level. Neither is very attractive, but it should be clear that ‘market discipline’ is not a mechanism run by atomistic players. Global wealth is highly concentrated, so market discipline means, de facto, a regime of plutocracy.

See also Causes of the Eurozone Crisis: A nuanced view

Hindsight is a wonderful thing. In the midst of a crisis, it is of course very hard to understand causality. This column uses the benefit of hindsight to present a nuanced view of the causes of the Eurozone Crisis as seen by members of the German Council of Economic Experts. To prevent the same crisis happening again, the Maastricht Treaty needs to be revitalised to enhance the future stability of the Eurozone and relieve the ECB of its role as crisis manager. 

Thomas Palley : "Inequality, the financial crisis and stagnation: competing stories and why they matter"

Palley74.pdf

Abstract

This paper examines several mainstream explanations of the financial crisis and
stagnation and the role they attribute to income inequality. Those explanations are
contrasted with a structural Keynesian explanation. The role of income inequality
differs substantially, giving rise to different policy recommendations. That highlights
the critical importance of economic theory. Theory shapes the way we understand the
world, thereby shaping how we respond to it. The theoretical narrative we adopt
therefore implicitly shapes policy. That observation applies forcefully to the issue of
income inequality, the financial crisis and stagnation, making it critical we get the story
right.

Monday, April 4, 2016

Tsipras -> Lagarde -> Tsipras

Tsipras ' letter to Lagarde

Oh c'mon, it's just a little gentle arm-twisting | World News |Axisoflogic.com



Lagarde;s letter to Tsipras:
IMF: Press Release No. 16/149 April 3, 2016

Jim Brunsden and Kerin Hope cover the story for the FT




Christine Lagarde, head of the International Monetary Fund, has hit back at Greece over claims that the IMF is seeking to push the country towards default, describing the idea as “nonsense”.
In a terse letter to Alexis Tsipras, Greek prime minister, Ms Lagarde defended IMF staff who have found themselves at the centre of a furore over a leaked transcript of a teleconference where they discuss difficult bailout negotiations.
Mr Tsipras has argued the leaked transcript of the mid-March call, which was published by WikiLeaks, raised the question of whether Athens can continue to deal with two officials on the call, Poul Thomsen, head of the IMF’s European bureau, and Delia Valculescu, who oversees the Greek programme for the IMF. But Ms Lagarde said her team “consists of experienced staff who have my full confidence and personal backing”.
Ms Lagarde falls short of accusing Athens of being responsible for spying on her officials, but she warns Mr Tsipras that “it is critical that your authorities ensure an environment that respects the privacy of their internal discussions”.
The row was prompted by comments recorded in the transcript where the IMF officials express frustration about the EU’s slow progress in granting debt relief to Greece. They mention that eurozone governments have in the past left important decisions until the Greek government was on the point of bankruptcy.
Greece has publicly interpreted the remarks as a plan by the IMF to prolong negotiations on whether to take part in eurozone’s latest bailout of the country until July, when the Greek government is faced with its next big debt payment. The logic would be that the impending deadline would give the IMF more leverage, allowing it to extract concessions out of a reluctant Germany on the debt relief that the IMF believes is essential for Greece’s long-term recovery.
The episode prompted an emergency meeting of senior Greek ministers on Saturday, and led Mr Tsipras to write to Ms Lagarde the same day to express his “deep concerns”. In his letter, he says that what is at stake is nothing less than “whether Greece can trust, and continue negotiating in good faith” with the IMF.
Ms Lagarde, in her reply, warns that the Greek reaction to the transcript has itself damaged mutual trust.
“This weekend’s incident has made me concerned as to whether we can indeed achieve progress in a climate of extreme sensitivity to statements of either side,” she writes. “On reflection, however, I have decided to allow our team to return to Athens to continue the discussions.”
In a further swipe at Greece’s handling of the affair, Ms Lagarde writes that the IMF “conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks.”

In depth



A logo of the Euro in front of the European Central Bank headquarters in Frankfurt
News and analysis of the single currency bloc’s fragile recovery as it attempts to regain competitiveness in the wake of the sovereign debt crisis and its struggles with austerity

Further reading
Despite the competing interpretations over the transcript of the teleconference, it remains the clearest sign to date that the fund wants to leave Greece’s €86bn rescue to the EU alone and wash its hands of a programme that has led to a torrent of criticism.
According to the document, Mr Thomsen at one point suggested confronting Angela Merkel, German chancellor, to either agree to debt relief or allow the IMF to exit.
Ms Lagarde confirms in the letter that, in her view, Greece is “still a good distance away from having a coherent program that I can present to our executive board.”
“The real fight here is between Germany and the IMF; Greece is a mere spectator,” said Mujtaba Rahman who heads European analysis at Eurasia Group. “As no IMF means no more bailout, Germany will ultimately support debt relief, it really has no other choice.”
Several observers in Athens said they suspected the Syriza government could be behind the leak of the transcript.
“The government’s reaction suggests it’s trying to manufacture a crisis to make the fund pull out of the Greek programme, hoping to make a deal on easier terms with the EU,” said Miranda Xafa, a researcher with the Centre for International Governance Innovation.


Sunday, April 3, 2016

"In Search of the Perfect Health System" by Mark Britnell

EUROPP – Book Review: In Search of the Perfect Health System by Mark Britnell

Mark Britnell is one of the UK’s most knowledgeable health management professionals, with boundless enthusiasm for healthcare and a mission to encourage countries to collaborate for the benefit of patients and citizens in general. In Search of the Perfect Health System is a series of essays based on his observation of health systems around the world, from which he distils the global challenges that we face. This is an admirable objective, and Mike Pym argues that this practitioner’s perspective is both a timely and accessible study for anyone with an interest in the healthcare field.

Saturday, April 2, 2016

WikiLeaks - IMF Internal Meeting Predicts Greek 'Disaster', Threatens to Leave Troika

via TO ΒΗΜΑ: Wikileaks: Αποκαλυπτική συνομιλία Τόμσεν-Βελκουλέσκου για την αξιολόγηση

WikiLeaks - IMF Internal Meeting Predicts Greek 'Disaster', Threatens to Leave Troika

Tim Worstall at Forbes thinks that "Wikileaks Release Is Pretty Much What We All Knew Anyway"

Peter Spiegel 's column at CNBC  and his FT Column

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The International Monetary Fund is considering forcing Germany’s leadership to quickly grant wide-ranging debt relief for Greece or allow the Fund to exit Athens’ bailout programme after six years, according to a transcript of an internal IMF teleconference published by WikiLeaks.
The teleconference, between the head of the IMF’s European operations and its top Greek bailout monitor, is the clearest sign to date that the Fund wants to leave Greece’s €86bn rescue to the EU alone and wash its hands of a programme that has led to a torrent of criticism.
During the call, which occurred just two weeks ago, Poul Thomsen, head of the IMF’s European bureau, notes that Berlin is under intense political pressure because of the refugee crisis and suggests confronting Angela Merkel, the German chancellor, to either agree to debt relief or allow the IMF to exit.
German officials have repeatedly said they could not participate in Greece’s bailout without the IMF on board, and senior members of the Bundestag have warned Ms Merkel they would reject new eurozone loans to Greece if only EU authorities were monitoring the programme.
“Look, you Ms Merkel, you face a question, you have to think about what is more costly: to go ahead without the IMF? Would the Bundestag say, ‘The IMF is not on board’?” the transcript quotes Mr Thomsen as saying to his staff. “Or [does Ms Merkel] pick the debt relief that we think that Greece needs in order to keep us on board? Right? That is really the issue.”
The IMF said it would not comment on “supposed reports of internal discussions.” But it noted that it has long pushed for “a credible set of reforms matched by debt relief from [Greece’s] European partners.”
One official involved in the talks said the transcript accurately reflected Mr Thomsen’s private and publicly-stated views, albeit in “more direct and colourful language.” Many of the points raised by Mr Thomsen in the call have been made publicly on his IMF blog.
Greek officials, however, reacted angrily to the revelation, arguing it was evidence the IMF was “blackmailing” Germany on the debt relief issue. 
“We will not allow anyone to play with fire and blackmail Greece or Germany or Europe,” said a senior Greek official. Alexis Tsipras, the Greek prime minister, was meeting with his cabinet on Saturday to decide how to respond and was expected to talk to Christine Lagarde, the IMF managing director, later in the day.
The IMF teleconference came just days after Wolfgang Schäuble, the powerful German finance minister, publicly said he was opposed to Greek debt relief — despite the fact eurozone leaders agreed to restructuring last July at a high-drama EU summit that agreed to a third bailout programme.
In the past there has been only one time when the decision has been made and then that was when they were about to run out ofmoney
- Poul Thomsen, IMF
The transcript shows IMF officials fretting that despite public claims, eurozone leaders wanted to move quickly to agree debt relief — which has long been an IMF demand, since Mr Thomsen believes Greece cannot survive economically without a large-scale restructuring — a decision will probably be delayed until July, when Greece is faced with its next big debt payment.
“What is going to bring it all to a decision point? In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default,” Mr Thomsen is quoted as saying. “And possibly this is what is going to happen again. In that case, it drags on until July.”
But Mr Thomsen notes that in addition to causing instability in Greece, a drawn-out deliberation on debt relief is politically dangerous for the EU because it will coincide with strife prompted by the refugee crisis and play out at the same time as Britain’s June 23 referendum on EU membership.
“Clearly the Europeans are not going to have any discussion a month before the Brexit [vote] and so, at some stage, they will want to take a break and then want to start again after the European referendum,” Mr Thomsen says.
Olga Gerovasili, a Greek government spokesman, said the statement showed Mr Thomsen was pushing for a Greek default before the British referendum in June.
"The Greek government asks the IMF for explanations whether pursuing the creation of bankruptcy conditions in Greece, just before the British referendum, is the Fund's official position,” Ms Gerovasili said.
A spokeswoman for Ms Merkel declined to comment. Berlin is likely to play down the reported remarks and avoid inflaming the political tensions surrounding the Greek rescue. The government is expected to remain very sceptical about deep debt cuts for Athens: it has repeatedly argued that these do not have to be on the immediate agenda as Greece has already been granted debt relief for the next few years.
Berlin will however be keen for the IMF to stay involved in the rescue, as the Bundestag’s support for the package depends on continued IMF financial backing.
Ms Merkel is also concerned to avoid undermining support for the EU in the UK in the run-up to the referendum. She has said that British membership is not only in UK’s interest but also Germany’s and the whole EU’s.
Although much of the transcript reiterates well-known IMF positions on Greece, it lays out in clear detail the profound differences between Mr Thomsen and the European Commission, and highlights the IMF’s belief that Brussels no longer has any credibility in judging Greece’s fiscal and economic performance. The IMF and the commission are the bailout’s two leading monitors and have clashed for months over how to proceed with the programme.
Delia Velculescu, who oversees the Greek programme for the IMF, is quoted showing frustration with the European Commission’s backsliding on reforms required by Athens and says eurozone finance ministers should be forced to decide whether to accept the IMF’s pessimistic view of the bailout’s likelihood of success or a more optimistic view from Brussels. 
“They need to take a stand on whether they believe our projections or the commission’s projections,” Ms Velculescu says.
Despite Greek anger over the disclosure, the transcript also shows the IMF arguing on Greece’s behalf, saying it wants to ease off tough budget surplus targets and grant Athens significant debt relief — both policies Mr Tsipras has long asked for.
“I hope for the sake of the Greeks we are going to find a solution soon,” Mr Thomsen says.