Tag Archives: Paul de Grauwe

Eurokriisin kiero hoito

Olen työn parissa lukenut lukuisia tekstejä eurokriisistä, miten se syntyy, mitä on tehty väärin, mitä meidän pitäisi tehdä yms. Kriisin ymmärtämiseen keskeisimmät kirjoitukset ovat minulle olleet Jörg Bibow (2012), Richard Koo:n kirja ‘balance-sheet recessions’-aiheesta ja Paul de Grauwen tärkeä kirjoitus rahaliitosta.

Joskus tulee kuitenkin vastaan sellaisia kirjoituksia, että tekee mieli kiroilla ja huutaa ja näin, koska koko eurokriisin hoito perustuu virheisiin, valheisiin ja inkompetenssiin. Tämä haastattelu Philippe Legrainin kanssa on sellainen tapaus. Lukekaa sitä.

Tässä päävika: vuonna 2010, Deauvillessa, Ranskassa, Merkel ja Sarkozy päättivät, että pitää rikkoa ns. “no-bailout clause” joka oli euroalueen perustuskivi. He, ja heidän kanssa myös Komissio vaativat että Kreikan valtio pelastaa Kreikan kriisipankkeja. Syy siihen oli, että piti suojella ranskalaiset ja saksalaiset (ja alankomaalaiset) pankit.  Sen sijään, että vihdoin tehtiin jotain järkevää finanssijärjestelmän vikoihin, laitettiin kaikki ongelmat valtioon. [siihen tulee de Grauwen analyysia peliin].

Koska ei Kreikallakaan ollut hyvä tilanne valtion taloudella (ei olisi pitänyt päästä Euroon, mutta sekin oli poliittinen päätös), päätettiin ‘antaa’ ‘apupaketteja.’ Tästä tuli lopussa se, että Pohjois-Euroopan maissa erilaiset hallitukset ja oppositiopuolueet ja nimenomaan myös kansalaiset ovat hyvin taipuvaisia kieltää lisää ‘apua’ esim. Kreikalle. Ja tämä on ymmärrettävää. Samoin kuin kreikkalaiset ovat vihaisia siitä, että heidän pitää kärsiä siitä, kun huonot pankit ‘pelastettiin’ ja pankit eivät nähneet melkein mitään seurauksia, myös pohjois-eurooppalaiset ovat  vihaisia, että heidän verorahat käytetetään ‘tukemaan laiskoja etelä-eurooppalaisia’ tai “täyttämään mustaa aukkoa” [mutta lue myös tätä]. Pointti on se, että olisi pitänyt tapahtua pankkien velkajärjestelyä ja hoita pankkialan valvonta kuntoon sen sijaan että pankkeja tuetaan. Nyt meillä on zombiepankit.

Ymmärrän varsin hyvin kritiikkiä rahaliitosta ja eurosta, mutta Suomessa ja Saksassa alusta diskurssi on keskittynyt niin vahvasti moraalikysymykseen, eikä oikeaan kysymykseen (pankkijärjestelmä, Saksan ajama talouspolitiikka), että on tosi vaikeaa enää puhua järkevästi tästä asiasta. Nykyiset ja viimeaikaiset hallituspuolueet ovat leikkineet tulella keskittymällä väärään asiaan. Kreikka tarvitsee rahaa vaan siksi, että kriisin alussa tehtiin valtavia virheitä. Olisi jo aikaa myöntää, että eurokriisin hoito on ollut tosi kehno. Brysselillä, Saksalla, Alankomailla ja myös Suomella.

Philip Atticus

Although the world of finance by itself is quite foreign to me, I find the writings of this Philip Atticus of a high quality, especially his observations of the interaction of politics and press (on Cyprus). Furthermore, I think his assessment of the Eurozone/EU is, unfortunately, quite realistic. The level of mismanagement in the Eurocrisis is just staggering. I think the EU by itself has accomplished a lot of good and important things but the monetary union has not been one of them. This is quite a reversal from my student time, when I was very pro-Euro. I guess I didn’t read Paul de Grauwe’s handbook on monetary union well enough.

The Eurozone has proven to be an emperor without clothes. The political hostility by Germany, France and others; the lack of basic understanding of financial operations and banking confidence; the very real effort to demonise Cyprus and Russia; the stubborn insistence on seizing deposits; the deliberate threats of Eurozone exit: these are not behaviours which will soon be forgotten.
Moreover, they are behaviours which appear ingrained, and which have been fully transmitted to national populations via what can only be described as a yellow press.
It is impossible to see how the Eurozone will deal with its deep-rooted competitive distortions given these political reactions. Rather than addressing an issue calmly and rationally, they stir up the worse nationalistic instincts of a European population already beset by economic crisis. Their “solutions” contain the roots of the next crisis. If the Eurozone is unable to solve a EUR 17.5 billion refinancing scheme, how will it solve the EUR 2 trillion national debt of Italy?
Ironically, this bail-out does absolutely nothing to solve the many “problems” attributed to Cyprus by the Eurozone. In the list below, I present the many reasons German politicians found to vilify Cyprus over the past week, and the impact of the current bail-out:
The entire spectacle of European—and particularly German—decision-making in the case of Cyprus is characterised by incompetence, hypocrisy, hysteria, and the loutish behaviour of a schoolyard bully. Rather than solving any issues in Cyprus, it has undermined the trust of international investors in Europe itself, and established the conditions for the next financial crisis in Cyprus, which will almost certainly relate to BOC recapitalisation in the face of deposit flight.
In Cyprus as in Greece, the European leaders have done everything possible through their statements and decisions to destroy international trust in a European Member State. And as with the example of Greece, it appears that these same European leaders have learned nothing.
We look forward to the next European crisis.

De Grauwe: Euro area in ‘deep trouble’


Paul Krugman has angered the Commission and Olli Rehn

Here is the account. I like the way he exposes the EU elite and the difference between his substantive comments and the Commissioners’ ad hominem attacts (of course, his use of Monty Python quotes is well-known):

What you would never grasp from those outraged tweets is that all my criticisms have been substantive. I never asserted that Mr. Rehn’s mother was a hamster and his father smelt of elderberries; I pointed out that he has been promising good results from austerity for years, without changing his rhetoric a bit despite ever-rising unemployment, and that his response to studies suggesting larger adverse effects from austerity than he and his colleagues had allowed for was to complain that such studies undermine confidence.

Panic-Driven Austerity in the Eurozone and its Implications

http://www.nakedcapitalism.com/2013/02/panic-driven-austerity-in-the-eurozone-and-its-implications.html Another good link.

Ambrose Evans-Pritchard on the Eurocrisis and bad policies

A quote from a long and insightful comment by Ambrose Evans-Pritchard

The report warned that “new divide” is emerging between the EMU core and those countries “that seem trapped in a downward spiral of falling output, fast rising unemployment and eroding disposable incomes The waive of austerity policies raise important questions about the viability of Europe’s welfare states,” it said. Indeed.

The Economist Poll of forecasters expects the eurozone to contract 0.2pc this year, with scant growth in 2014.

By then millions of people will have fallen into an “enormous poverty trap,” to borrow the words of EU jobs chief Laszlo Andor.

It is why Gustav Horn — head of Germany’s IMK Institute and one of the country’s five `Wise Men’ — called for an end to the contractionary torture last week. “It’s a vicious circle. Excess austerity is not reducing debt, it is causing debt to rise,” he said.

Dr Horn has concluded that the only viable way to close the gap is for Germany to tolerate an inflationary boom with 4pc wage growth for a while. He is right.

I haven’t been able to find Dr Horn’s comments but this is exactly the medicine also prescribed by e.g. Paul Krugman and Joseph Stiglitz, and other experts of the so-called Zero Lower Bound -economics.  The IMK instute is a very respectable institute and I hope Germans finally take note. Last weekend I spoke with a German who complained that all European countries have lived above their means, and that deficits should be cut. I tried to discuss this issue, because it rather makes a difference if you have your own currency or not (see this already classic article by Paul de Grauwe) but to no avail – many Germans (and Dutch, and Finns) seem to have adopted the myth of ‘Mediterranean overspending/borrowing’. I really hope the European policy elites come to their senses, because the human suffering in the face of a bad diagnosis of the problem is too catastrophic too contemplate.