Progress Towards External Adjustment In The Euro Area Periphery And The Baltics

Author: Joong Shik Kang
Publisher: International Monetary Fund
ISBN: 1498339026
Size: 60.41 MB
Format: PDF, Docs
View: 2661
Download Read Online

Progress Towards External Adjustment In The Euro Area Periphery And The Baltics from the Author: Joong Shik Kang. The euro area periphery countries and the Baltic countries, which had large current account deficits in the run-up to the crisis, needed adjustment of relative prices to achieve both internal and external balances. Thus far, tangible progress has been made through lower wages and/or higher productivity relative to trading partners (“internal devaluation”), which contributed to narrowing current account deficits and shifting output towards the tradables sector. While some early adjusters cut wages more rapidly followed by productivity improvement, others have only slowly improved productivity largely through labor shedding. This adjustment for most countries has come along with a substantial recession as the unit labor cost improvement has largely come from falling employment and much of the current account improvement from import compression. Going forward, these countries still need to generate growing tradables sector employment and to continue adjustment to prevent imbalances from returning as output gaps close.

Ireland Ex Post Evaluation Of Exceptional Access Under The 2010 Extended Arrangement

Author: International Monetary Fund. Finance Dept.
Publisher: International Monetary Fund
ISBN: 149830401X
Size: 47.71 MB
Format: PDF, ePub, Mobi
View: 632
Download Read Online

Ireland Ex Post Evaluation Of Exceptional Access Under The 2010 Extended Arrangement from the Author: International Monetary Fund. Finance Dept.. This paper presents an Ex Post Evaluation of the 2010 Extended Fund Facility (EFF) arrangement with Ireland. The Fund approved in December 2010 an exceptional access EFF arrangement for SDR 19.466 billion (2,321.8 percent of quota) in support of Ireland’s home-grown program and as part of a broader financing package of Ireland and its European partners. The program focused on addressing the Irish banking crisis to break the adverse feedback loop between banks, the sovereign, and the real sector. It aimed to restore the banking system to health, including by establishing a smaller banking sector with high capital buffers and more stable funding sources; and to secure fiscal sustainability while limiting the near-term demand drag from fiscal consolidation. Large external financing was a key element of the crisis response. Program implementation was very strong. The program succeeded in stabilizing the banking sector and reducing its size, and fiscal developments were also broadly as anticipated. Domestic demand was, however, weaker than programmed and unemployment remained high, amid a very challenging external environment. Program success, including regaining market access at low interest rates, benefitted also from actions at the wider euro area level. The Ex Post Evaluation draws several lessons from Ireland’s experience under the EFF: ? The main lessons emerge from what worked well: Strong country ownership, setting (and meeting) realistic and tailored targets were key for success, combined with effective communication and pro-active engagement. Addressing a banking crisis requires strong and credible actions upfront. ? Some areas offer lessons for future program design: While the main pillars of the financial sector program were sound, more proactive and stronger supervisory interventions and other supportive steps could have strengthened banks’ balance sheets and bank profitability and helped resolve problem loans; bank recapitalization should be limited to those with viable medium-term business strategies; unsecured and non-guaranteed creditors of failed banks should be bailed in, provided a strategy to ring fence potential systemic risks can be put in place; macro-financial linkages require careful attention and timely steps to limit sovereignbanking sector feedback loops; fiscal policy has to be mindful of debt sustainability but also of domestic demand conditions, and it needs a clear anchor. ? There are also lessons related to Fund policies: Ireland’s EFF underscores the importance of addressing shortcomings of the systemic exemption clause in Criterion 2 of the exceptional access criteria; and it suggests the need to explore ways to secure stronger upfront commitments from monetary union authorities, when those are critical for program success.

How To Fix The Euro

Author: Stephen Pickford
Publisher: Chatham House
ISBN: 9781784130138
Size: 23.80 MB
Format: PDF, ePub
View: 962
Download Read Online

How To Fix The Euro from the Author: Stephen Pickford. The global economic and financial crisis that started in 2007 exposed serious flaws in the euro's original design. This report examines why Europe's economic and monetary union was so badly affected by the crisis, and assesses whether further changes need to be made to the structure of economic governance that underpins it. A Chatham House, Elcano and AREL Report

In Search Of A New Equilibrium

Author: Paolo Canofari
Publisher: Edizioni Nuova Cultura
ISBN: 8868124556
Size: 46.91 MB
Format: PDF, ePub, Mobi
View: 1050
Download Read Online

In Search Of A New Equilibrium from the Author: Paolo Canofari. The book shows that the overcoming of the negative imbalances in the current accounts of the large majority of peripheral Member States in the euro area is mainly due to a recession-driven decrease in import, a monetary wage compression, and below average rates of inflation. This re-equilibrating process thus leads to short-term adjustments, in the sense that it is unable to structurally fill the competitive gaps accumulated inside the euro area during the first decade of its life (1999-2007), owing to the inefficient allocation of the financial flows coming from the European central countries and invested in the European peripheral countries. Contrary to the predictions of the standard macroeconomic models based on the “catching up” mechanism, these financial flows did not adequately foster the productivity of lagged Member States in the euro area. Our proposal is to replace the “invisible hand” of the market with the “visible hand” of a European policy project. We argue that an effective policy initiative would have to combine a programme of European public and private investments with “contractual arrangements” aimed at implementing crucial national reforms. This strategy might provide a short term positive demand shock as well as the long term strengthening of the structural competitiveness of the peripheral Member States without involving direct financial transfers but allowing an intergovernmental co-operation and a trust-building process under the control of the European institutions. Marcello Messori is Professor of Economics at the Department of Political Science, LUISS Guido Carli (Rome) and Director of the LUISS School of European Political Economy (SEP).

Sovereign Rating News And Financial Markets Spillovers

Author: Bertrand Candelon
Publisher: International Monetary Fund
ISBN: 1455276464
Size: 54.78 MB
Format: PDF, Kindle
View: 6943
Download Read Online

Sovereign Rating News And Financial Markets Spillovers from the Author: Bertrand Candelon. This paper examines the spillover effects of sovereign rating news on European financial markets during the period 2007-2010. Our main finding is that sovereign rating downgrades have statistically and economically significant spillover effects both across countries and financial markets. The sign and magnitude of the spillover effects depend both on the type of announcements, the source country experiencing the downgrade and the rating agency from which the announcements originates. However, we also find evidence that downgrades to near speculative grade ratings for relatively large economies such as Greece have a systematic spillover effects across Euro zone countries. Rating-based triggers used in banking regulation, CDS contracts, and investment mandates may help explain these results.

A Triumph Of Failed Ideas European Models Of Capitalism In The Crisis

Author: Steffen Lehndorff
Publisher: ETUI
ISBN: 2874522465
Size: 34.70 MB
Format: PDF
View: 1059
Download Read Online

A Triumph Of Failed Ideas European Models Of Capitalism In The Crisis from the Author: Steffen Lehndorff. The current crisis in Europe is being labelled, in mainstream media and politics, as a ‘public debt crisis’. The present book draws a markedly different picture. What is happening now is rooted, in a variety of different ways, in the destabilisation of national models of capitalism due to the predominance of neoliberalism since the demise of the post-war ‘golden age’. Ten country analyses provide insights into national ways of coping – or failing to cope – with the ongoing crisis. They reveal the extent to which the respective socio-economic development models are unsustainable, either for the country in question, or for other countries. The bottom-line of the book is twofold. First, there will be no European reform agenda at all unless each country does its own homework. Second, and equally urgent, is a new European reform agenda without which alternative approaches in individual countries will inevitably be suffocated. This message, delivered by the country chapters, is underscored by more general chapters on the prospects of trade union policy in Europe and on current austerity policies and how they interact with the new approaches to economic governance at the EU level. These insights are aimed at providing a better understanding across borders at a time when European rhetoric is being used as a smokescreen for national egoism.

Changing Welfare States

Author: Anton Hemerijck
Publisher: Oxford University Press
ISBN: 0199607605
Size: 63.64 MB
Format: PDF, Docs
View: 1282
Download Read Online

Changing Welfare States from the Author: Anton Hemerijck. Changing Welfare States is is a major new examination of the wave of social reform that has swept across Europe over the past two decades. In a comparative fashion, it analyses reform trajectories and political destinations in an era of rapid socioeconomic restructuring, including the critical impact of the global financial crisis on welfare state futures. The book argues that the overall scope of social reform across the member states of the European Union varies widely. In some cases welfare state change has been accompanied by deep social conflicts, while in other instances unpopular social reforms received broad consent from opposition parties, trade unions and employer organizations. The analysis reveals trajectories of welfare reform in many countries that are more proactive and reconstructive than is often argued in academic research and the media. Alongside retrenchments, there have been deliberate attempts - often given impetus by intensified European (economic) integration - to rebuild social programs and institutions and thereby accommodate welfare policy repertoires to the new economic and social realities of the 21st century. Welfare state change is work in progress, leading to patchwork mixes of old and new policies and institutions, on the lookout, perhaps, for greater coherence. Unsurprisingly, that search process remains incomplete, resulting from the institutionally bounded and contingent adaptation to the challenges of economic globalization, fiscal austerity, family and gender change, adverse demography, and changing political cleavages.

A History Of The Baltic States

Author: Andres Kasekamp
Publisher: Palgrave Macmillan
ISBN: 0230364519
Size: 64.16 MB
Format: PDF, Docs
View: 880
Download Read Online

A History Of The Baltic States from the Author: Andres Kasekamp. Estonia, Latvia and Lithuania have been the battleground for neighbouring powers and the site of intense rivalry, but also interaction, between East and West. A History of the Baltic States masterfully traces the development of these three Baltic countries, from the northern crusades against Europe's last pagans, and Lithuania's rise to become one of medieval Europe's largest states, to their incorporation into the Russian Empire and the creation of their modern national identities. Drawing upon the most recent scholarship, Andres Kasekamp pays particular attention to the tumultuous twentieth century, during which the Baltic States achieved independence, but also endured occupation by both the Soviet Union and Nazi Germany. Finally, he explores how the Baltic States recovered their statehood and transformed themselves into members of the European Union. Clearly and accessibly written, this is one of the first English-language books to provide a comparative survey of Baltic history.

The Shifts And The Shocks

Author: Martin Wolf
Publisher: Penguin
ISBN: 1101608447
Size: 22.94 MB
Format: PDF, ePub
View: 3302
Download Read Online

The Shifts And The Shocks from the Author: Martin Wolf. From the chief economic commentator for the Financial Times—a brilliant tour d’horizon of the new global economy There have been many books that have sought to explain the causes and courses of the financial and economic crisis that began in 2007. The Shifts and the Shocks is not another detailed history of the crisis but is the most persuasive and complete account yet published of what the crisis should teach us about modern economies and econom­ics. Written with all the intellectual command and trenchant judgment that have made Martin Wolf one of the world’s most influential economic com­mentators, The Shifts and the Shocks matches impressive analysis with no-holds-barred criti­cism and persuasive prescription for a more stable future. It is a book no one with an interest in global affairs will want to neglect. From the Trade Paperback edition.

Exchange Rate Assessments

Author: Jaewoo Lee
Publisher: IMF's Occasional Paper
ISBN:
Size: 40.64 MB
Format: PDF, ePub, Mobi
View: 5709
Download Read Online

Exchange Rate Assessments from the Author: Jaewoo Lee. As part of this mandate, since the mid-1990s the IMF Consultative Group on Exchange Rate Issues (CGER) has provided exchange rate assessments for a number of advanced economies from a multilateral perspective, with the aim of informing the country-specific analysis of the IMF's Article IV staff reports and fostering multilateral consistency. These assessments are additional tools at the disposal of the IMF staff country desks, which are responsible for formulating exchange rate assessments as part of the Fund's bilateral surveillance, another of the IMF's core responsibilities.