Europe 2020 presentation
... It has been forced to raise taxes and slash spending
for years and that won't stop until at least 2015.
The sales tax is now up to a whopping 23%
middle-class wages have been cut around 15%.
Residents face higher taxes on incomes, cars,
homes and fuel.
Nearly 15% are unemployed and seen lo ...
Blame Germany for Europe`s Economic Nightmare
... statistics hide the tragedies occurring in Italy and Greece, where GDP has fallen since 2008
by 8 and 25 percent, respectively, and long-term unemployment is almost off the charts.
Since mid-2010, after the worst part of the global financial crisis was over, Europe has
desperately needed two things ...
... US is close to average and therefore will be able to continue borrowing
... higher – no boost to growth (worst case = Greece)
Stick to Plan A → permanent loss of capacity
•No change in policy – growth remains weak – firms don’t
invest – capacity declines – unemployed become detached
from labour market – unemployment stays high for much
longer (worst case = Japan)
Austerity experience shows we need EMU-sized
... a sudden need to redistribute fiscal capacity away from projects
financed under the 2014-2020 MFF. The current British input to
the EU budget is substantial. With the European project on a lessthan-stable footing at the moment and the economic recovery not
as fast as had been hoped, expecting ad hoc ...
... and some exchange-rate instability, the Bank of Jamaica
kept its interest rate for open-market operations
unchanged at 12%.3 M1 expanded by 20.3% as of
August 2007 (16.2% in 2006), and the growth of credit
to the private sector also accelerated; during the second
quarter it grew by 5.4% year on year ...
슬라이드 1 - Claremont Graduate University
... Efforts to calm markets by committing to longer run costs
and/or trying to hide problems
3. Guaranteeing debt (caused Ireland’s huge fiscal deficit)
4. No default mantra
5. Repeated statements by leaders that they would do
“Whatever it takes to save the Euro” without making
sufficient actual commit ...
Prospects for the UK economy
... What happens on the way?
• Markets work slowly even when forward
looking but policy can speed them up
• Unemployment will rise by up to third of
the increase in the labour force
– The increase will all be absorbed in five years
– Policy and information can speed adjustment
• Special employment meas ...
Federal Debt,Deficits,Social Security
... demand for borrowed funds goes __________.
Everybody knows that if interest rates go down this will
foreign financial investment in the U.S.
causing the dollar to _______________
exchange markets and causing net exports to go
This net export e ...
... production in established fields. A windfall tax of 50%
on oil revenues, when the price of oil exceeds US$ 90
per barrel, was implemented in September. However, the
downward trend in oil prices means that revenues will be
lower than expected. Public finances also benefited from
significant grant inf ...
ITALY, THE ECONOMIC AND FINANCIAL OUTLOOK, slides, A
... The European economic policy: the
wrong prescription of austerity
“ Austerity alone will kill the patient. No big
economy has never recovered only with this
In the few cases where it worked was for small
economies and because of the factors on
which Europe cannot count:
devaluation or the ...
INDONESIA UNDER EMBARGO UNTIL 07.00 GMT, WEDNESDAY, 6 AUGUST 2014
... Exports were subdued in 2013 on softer global prices of key export commodities such as coal,
copper and palm oil. Imports also fell from a weaker currency and policy measures, such as
higher import taxes aimed at narrowing the current account deficit. Still, partly due to sizeable oil
imports, the c ...
EU policy impacts and perspectives
... Central bank can resolve it (create money, guarantee, not ideal, but)
Levels rose with crisis (for most, NOT before), bank debts + low tax
revenues + GDP falls
Public Expenditures Reduction
... Further fiscal consolidation:
- Public debt decreasing and restructuring to be below 30%GDP by 2011
- Compliance with “golden rule”
- Balanced budget
- Public expenditures reducing to 35%GDP/alternatively cuts in current
expenditure 1pp yearly
Business barriers reduction
Pension system reform – intr ...
Prospects for the UK economy
... – Those near retirement work 66% of normal hours so
its 1.5 years on the age of retirement
– This is anticipated and consumption reacts
immediately to higher expected lifetime incomes
... food (rice, beans, pork, milk and sugar, among others) therefore increased by 24.6% between 2013 and
2014. Meanwhile, spending on budgetary units decreased by 1.6% compared with the figure for 2013,
although it might be somewhat higher due to pay hikes in the public health sector.
The decentralizati ...
The European Sovereign Debt Crisis
... Credit boom during the 2003-2007 period
Ultimately, national governments failed to tighten
fiscal policy during the period of growth from 20032007
... Problems accentuated by the architecture of the EU and the eurozone
(no fiscal transfers, breakdown of monetary transmission mechanism, role
and scope of the ECB, Banking Union not moving forward)
Danger of disinflation
German strategy of keeping surpluses while the South must keep in
... and gas sectors and by improved tourism activity. Inflation is projected to exceed 2% by
year end, while unemployment is expected to decline as activity picks up. The fiscal position
strengthened as higher revenues from improved petroleum tax receipts outpaced the increase
in expenditures. Neverthel ...
In economics, austerity is a set of policies with the aim of reducing government budget deficits. Austerity policies may include spending cuts, tax increases, or a mixture of both. Austerity may be undertaken to demonstrate the government's fiscal discipline to their creditors and credit rating agencies by bringing revenues closer to expenditures.In most macroeconomic models, austerity policies generally increase unemployment in the short run, as government spending falls reducing jobs in the public or private sector or both, while tax increases reduce household disposable income and thus consumption. The U.S. Congressional Budget Office illustrated this when comparing unemployment under alternative fiscal scenarios.Unemployment increases safety net spending and further reduces tax revenues, partially offsetting the austerity measures. Government spending contributes to gross domestic product (GDP), so reducing spending may result in a higher debt-to-GDP ratio, a key measure of the debt burden carried by a country and its citizens. Higher short-term deficit spending (stimulus) contributes to GDP growth particularly when consumers and businesses are unwilling or unable to spend. This is because crowding out (i.e., rising interest rates as government bids against business for a finite amount of savings, slowing the economy) is less of a factor in a downturn, as there may be a surplus of savings.In the aftermath of the Great Recession, austerity results in Europe have been as predicted by macroeconomics, with unemployment rising to record levels and debt-to-GDP ratios rising, despite reductions in budget deficits relative to GDP. Eurostat reported that unemployment in the 17 Euro area countries (EA17) reached record levels in March 2013, at 12.1%, up from 11.0% in March 2012 and 10.3% in March 2011; and that the overall debt-to-GDP ratio for the EA17 was 70.1% in 2008, 80.0% in 2009, 85.4% in 2010, 87.3% in 2011, and 90.6% in 2012. Further, real GDP in the EA17 declined for six straight quarters from Q4 2011 to Q1 2013. The U.S. Congressional Budget Office estimated in August 2012 that if the U.S. implemented moderate austerity measures, the unemployment rate would rise by over 1% and economic growth would be significantly reduced in 2013. The U.S. partially avoided the ""fiscal cliff"" through the American Taxpayer Relief Act of 2012. U.S. unemployment has fallen steadily from a peak of 10% in early 2010 to 5.3% by July 2015.