SECRETARIA DE ESTADO DE ECONOMÍA,

MINISTERIO SECRETARÍA GENERAL DE POLÍTICA ECONÓMICA DE ECONOMÍA Y ECONOMÍA INTERNACIONAL Y HACIENDA SUBDIRECCIÓN GENERAL DE ECONOMÍA INTERNACIONAL

CUADERNO DE DOCUMENTACION

Número 91º ANEXO III

Alvaro Espina Vocal Asesor 6 de Septiembre de 2010

BACKGROUND PAPERS:

1. OP-ED Columnist, Georgia on my mind, The New York Times by Paul Krugman…7 2. A deal at least, Collegio Carlo Alberto…9 3. Greece wins EU 45 billion aid pledge to blunt crisis (update3), Bloomberg.com by Jame G Neuger and Jonathan Stearns…11 4. Greek bonds and stocks rebound on news of rescue, FT.com by Jaime Chisholm…14 5. A Greek bil-out at last but no real solution, FT.com by Wolfgang Munchau…16 6. La zone euro vole, enfin, au secours d’Athènes, Coulisses de Bruxelles, UE by Jean Quatremer…18 7. Interview with Jean-Claude Trichet, President of the ECB and II sole 24 ore, conducted by Beda Romano, The European Central Bank …20 8. Renminbi adjustment will not cure trade imbalance, FT.com by Yang Yao…24 9. El Estado de bienestar va rumbo a la UVI, El País de Claudi Pérez…26 10. ¿Recuperación sin empleo?, El País de Rafael Doménech…31 11. La reconfortante perspectiva del largo plazo, El País de J Bradford Delong…33 12. La extraña pareja, El País de Antón Costas…35 13. Carta a Papandreu, El País de Yorgos Papandreu, Mansion Maximou…37 14. El riesgo de contagio, El País de Ian Campbell…38 15. ¿Por quién doblan las campanas?, El País de Victorio Valle…39 16. Un retraso de doble imposición, El País de Miguel A. Noceda…41 17. Turquía emerge con fuerza de la crisis, El País de Juan Carlos Sanz…43 18. El FMI va a Europa, El país de Kenneth Rogoff…46 19. Gracias, Jean-Claude, El País de Neil Unmack…48 20. Avances en la recuperación de Irlanda, El País de Michael Martín…49 21. Balance provisional del primer trimestre de 2010, El País de Ángel Laborda…51 22. Una navaja suiza, El País de David Fernández…54 23. Liquidez para las preferentes, El País de D Fernández…57

1 24. España se mira en el espejo austriaco, El País de Luis Doncel…58 25. Crecer si, pero poco y sin empleo, El País de Alicia González…60 26. OP-ED columnist No One is to blame for anything, The New York Times by Frank Rich…65 27. Sangre, sudor y lágrimas en Reino Unido, El País de Luis Garicano y John Van Reenen…68 28. Los grandes bancos de EEUU recurren a tretas legales para camuflar su deuda, El País de Agencias…70 29. Singapore’s lesson from Harvard model, FT.com by Gillian Tett…72 30. Now Obama is president with an endgame, Ft.com by Philip Stephens…73 31. Bernanke says policymakers prevented “cataclysm” worse than great depression, The Washington Post by Neil Irwin…76 32. Learning from Greece, The New York Times by Paul Krugman…78 33. Lucky ducky redux, The Conscience of a Liberal …80 34. Fiscal fantasies, Krugman blogs…80 35. Show me the money, Krugman blogs…80 36. Birds and bees blogging…80 37. Austrian followup, Austrian economics post…80 38. More on the exchange rate and the trade Balance, Krugman blogs…81 39. Martin and the Austrians, by martin Wolf…82 40. Inmaculate transfer strikes again by Mark Thoma…82 41. The can’t imagine…83 42. Me and the bubble, …83 43. The semi-daily journal of economist J Bradford Delong: fair, balanced, reality-based and mulish. Hoisted from the archives from January 2007: in condemnation of one-equation economics …84 44. No es el momento para una guerra comercial, Project Syndicate de Joseph E Stiglitz…86 45. Evaluating the Renmimbi Manipulation, Economist’s View…89 46. Keynes and Hayek…89 47. Reblog: Wow! Cash for clunkers worked!!!…90 48. Layoff, hiring, and unemployment rates, http://economistsview.typepad.com …91

2 49. The astonishing voice of Albert Hirschman…91 50. Trichet’s communication disaster, Collegio Carlo Alberto…95 51. Trichet thwarted as Greece erodes “Mr. Euro’ status (Update1), Bloomberg.com by John Fraher…97 52. El BCE y el euro, Cinco Días.com de José Carlos Díez…99 53. Chinese trade barriers may undercut Yuan Change, Locke says, Bloomberg.com by mark Drajem and Sara Eisen…101 54. China may post trade deficit, undermining Yuan Case (Update1) by Bloomberg News…103 55. China seems set to loosen hold on its currency, The New York Times by Keith Bradsher…105 56. El peligro de Europa es el populismo, El País de Ricardo Martínez de Rituerto…108 57. And now comes the Greek prívate sector, Collegio Carlo Alberto…111 58. Greece needs political will to take “hard medicine” white says, Bloomberg.com by Svenja O’Donnell and Francine Lacqua…113 59. Merkel’s Government popularity unchanged poll shows (Update1), Bloomberg.com by Patrick Donahue…114 60. Merkel’s popularity drops to 40-month low in ARD opinion poll by Rainer Buergin…114 61. Bubbles lurk in government debt, FT.com by Kenneth Rogoff…116 62. BA and Iberia sign merger agreement, FT.com by Mark Mulligan and Pilita Clark…118 63. United and US Airways resume merger talks by Helen Thomas and Justin Baer…119 64. Why the euro will continue to weaken, FT.com by Wolfgang Munchau…120 65. US rate uncertainty leads investors to cut riskier bets, FT.com by Jaimie Chisholm…122 66. Germany: A shifting weltanschauung, FT.com by Quentin Peel…124 67. Greece, FT.com …129 68. Short view: Greek contagion, FT.com by Aline Van Duyn …130 69. Europe urged to focus on real economy, FT.com by Vincent Boland…131

3 70. Revamped ECB lending rules may give Greece more pain than gain, Bloomberg.com by Frances Robinson…132 71. The real case for fiscal integration, Collegio Carlo Alberto by Laurence Boone…134 72. Growth seen easing back slightly in US, Europe and Japan in first half of 2010, OECD…136 73. OECD Economic Outlook: interim assessment, April 2010…137 74. Is a new pattern of global imbalances emerging?…138 75. Greek funding situation turns critical, Collegio Carlo Alberto …140 76. Why the Greek rescue isn’t going to plan, FT.com by Mohamed El Erian…142 77. Greek rescue doubts fuel yields rise, FT.com by Jennifer Hughes and Kerin Hope…144 78. Greece will default, but not this year, FT.com by Wolfgang Munchau…145 79. Il est urgent de lutter contre la déflation par la dette en Europe du Sub, Les Echos.fr de Jacques Delpla …146 80. Zone euro: la croissance en panne d’investissement au 4e trimestre 2009, Les Echos.fr de Jan Strupczewski…148 81. G7: la reprise est plus dynamique aux Etats-Unis que dans la zone euro, Les Echos.fr…149 82. When I’m in India & China I get to see opportunities, not risks: Nouriel Roubini, The Economic Times …150 83. France-Allemagne: 1 à 3, Les Echos.fr by Jean march Vittori…152 84. Merkel marca el paso en Europa, El País de Juan Gómez…156 85. Las empresas en concurso frenan su ritmo de subida, El País de Europa Press…158 86. Los concursos en 2009 baten todos los récords: crecen un 104% y, con 5860, superan los publicados en los últimos cuatro años, PriceWaterHouseeCoopers…159 87. Making financial reform fool-resistant, The New York Times by Paul Krugman…160 88. WWS 543, April 5, The Conscience of a Liberal…161 89. Alan Greenspan: still not a Mensch, http://www.princeton.edu…162 90. Building a Green Economy, The New York Times by Paul Krugman…163

4 91. Geithner counts on delay to let China strengthen Yuan (Update1), Bloomberg.com by Greg Stohr and Phil Mattingly…175 92. RBA’s next move on interest rates Very Close call (Update1), Bloomberg.com by Michael Heath and Dan Petrie…178 93. I saw the crisis coming. Why didn’t the fed?, The New York Times by Michal J Burry…180 94. Greenspan cites evidence of economic “Momentum”, The New York Times by Joseph Berger…183 95. El yuan tensa las relaciones EEUU China, El País de José Reinoso y Sandro Pozzi…184 96. Incluso si la burbuja estalla en China, su impacto sería limitado, El País de Alicia González…188 97. Falso culpable, El País de Pablo Bustelo…190 98. How Texas escaped the real estate crisis, The Washington Post by Alyssa Kaltz…192 99. Economía sostenible, El País de Alfonso Novales…195 100. Financial reform 101, The New York Times by Paul Krugman…197 101. European leisure, The Conscience of a Liberal …198 102. Sara Lee se bate en retirada, El País de Vidal Maté…200 103. Candidatos al desahucio, El País de José Luis Barbería…203 104. Las líneas de falla de la democracia, El País de Nicolas Bergguren y Nathan Gardels…208 105. Alemania aprieta a la zona euro, El País de Andreu Missé…210 106. España pierde competitividad por los precios y los salarios, El País de AM…213 107. Para entender a los alemanes, El País de Xavier Vidal-Folch…215 108. Se para el motor alemán y Europa se estanca, El País de Timothy Garton Ash…217 109. Vuelven las ventas sobre plano, El País de Juan Carlos Martínez…220 110. La construcción de viviendas ha caído el 79% desde la crisis, El País …222 111. Fall in German jobless points to recovery, FT.com by Stanley Pignal…223 112. The eurozone’s gone double-digit unemployment by Izabella Kamiska…224

5 113. Why Germany cannot be amodel for the eurozone, FT.com by Martin Wolf…225 114. Greece raises €5bn at 5.9% -the deal had no effect on the market rate, Collegio Carlo Alberto…228 115. Ireland to launch €81bn bad loan bank, FT.com by John Murray …230 116. Smoke and mirrors in Brussels, Collegio Carlo Alberto by Wolfgang Munchau…231 117. Punks and Plutocrats, The New York Times by Paul Krugman…233 118. Disappointing Roach, The Conscience of a Liberal…234 119. Blaming China will not solve America’s problem, FT.com by Stephen Roach…235 120. Greece to test markets this week, Collegio Carlo Alberto…237 121. La promoción de pisos muestra los primeros síntomas de reactivación, El País de Luis Doncel…240 122. España esquiva los recortes salariales a los funcionarios de la Unión Europa, Cinco Días de Carlos Molina…242 123. Greenspan takes issue with Yellen of Fwed’s role in house Bubble, Bloombeg.com by Rich Miller and Josh Zumbrun…245 124. How rising wages are changing the game in China, BusinessWeek …247 125. Obama trade initiatives are a good start, Peterson Institute for International Economics by C Fred Bergsten…250 126. How best to boost US exports, Peterson Institute for International Economics by C Fred Bergsten…252 127. International trade, offshoring, and US wages, Vox by Avraham Ebenstein, Ann Harrison, Margaret McMillan and Shanon Phillips…254 128. Blue-collar blues: is trade to blame for rising US income inequality?, Peterson Institute by Robert Z Lawrence…261

Período: de 22/03/2010 a 12/04/2010 en orden inverso a la fecha

6 Opinion

April 12, 2010 OP-ED COLUMNIST

Georgia on My Mind By PAUL KRUGMAN As we look for ways to prevent future financial crises, many questions should be asked. Here’s one you may not have heard: What’s the matter with Georgia? I’m not sure how many people know that Georgia leads the nation in bank failures, accounting for 37 of the 206 banks seized by the Federal Deposit Insurance Corporation since the beginning of 2008. These bank failures are a symptom of deeper problems: arguably, no other state has suffered as badly from banks gone wild. To appreciate Georgia’s specialness, you need to realize that the housing bubble was a geographically uneven affair. Basically, prices rose sharply only where zoning restrictions and other factors limited the construction of new houses. In the rest of the country — what I once dubbed Flatland — permissive zoning and abundant land make it easy to increase the housing supply, a situation that prevented big price increases and therefore prevented a serious bubble. Most of the post-bubble hangover is concentrated in states where home prices soared, then fell back to earth, leaving many homeowners with negative equity — houses worth less than their mortgages. It’s no accident that Florida, Nevada and Arizona lead the nation in both negative equity and mortgage delinquencies; prices more than doubled in Miami, Las Vegas and Phoenix, and have subsequently suffered some of the biggest declines. But not all of Flatland has gotten off lightly. In particular, there’s a sharp contrast between the two biggest Flatland states, Texas — which avoided the worst — and Georgia, which didn’t. This contrast can’t be explained by the geography of the two states’ major cities. Like Dallas or Houston, Atlanta is a sprawling metropolis facing few limits on expansion. And like other Flatland cities, Atlanta never saw much of a housing price surge. Yet Texas has managed to avoid severe stress to either its housing market or its banking system, while Georgia is suffering severe post-bubble trauma. The share of mortgages with delinquent payments is higher in Georgia than in California; the percentage of Georgia homeowners with negative equity is well above the national average. And Georgia leads the nation in bank failures. So what’s the matter with Georgia? As I said, banks went wild, in a scene strongly reminiscent of the savings-and-loan excesses of the 1980s. High-flying bank executives aggressively expanded lending — and paid themselves lavishly — while relying heavily on “hot money” raised from outside investors rather than on their own depositors. It was fun while it lasted. Then the music stopped. Why didn’t the same thing happen in Texas? The most likely answer, surprisingly, is that Texas had strong consumer-protection regulation. In particular, Texas law made it difficult for homeowners to treat their homes as piggybanks, extracting cash by increasing the size of their

7 mortgages. Georgia lacked any similar protections (and the Bush administration blocked the state’s efforts to restrict subprime lending directly). And Georgia suffered from the difference. What’s striking about the contrast between the Texas story and Georgia’s debacle is that it doesn’t seem to have anything to do with the issues that have dominated debates about banking reform. For example, many observers have blamed complex financial derivatives for the crisis. But Georgia banks blew themselves up with old-fashioned loans gone bad. And for all the concern about banks that are too big to fail, Georgia suffered, if anything, from a proliferation of small banks. Actually, the worst offenders in the lending spree tended to be relatively small start-ups that attracted customers by playing to a specific community. Thus Georgian Bank, founded in 2001, catered to the state’s elite, some of whom were entertained on the C.E.O.’s yacht and private jet. Meanwhile, Integrity Bank, founded in 2000, played up its “faith based” business model — it was featured in a 2005 Time magazine article titled “Praying for Profits.” Both banks have now gone bust. So what’s the moral of this story? As I see it, it’s a caution against silver-bullet views of reform, the idea that cracking down on just one thing — in particular, breaking up big banks — will solve our problems. The case of Georgia shows that bad behavior by many small banks can do as much damage as misbehavior by a few financial giants. And the contrast between Texas and Georgia suggests that consumer protection is an essential element of reform. By all means, let’s limit the power of the big banks. But if we don’t also protect consumers from predatory lending, there are plenty of smaller players — both small banks and the nonbank “mortgage originators” responsible for many of the worst subprime abuses — that will step in and fill the gap. http://www.nytimes.com/2010/04/12/opinion/12krugman.html?th=&emc=th&pagewanted=pr int

See and hear also: Willie Nelson: Georgia On My Mind: http://www.youtube.com/watch?v=N3krQ23tfHU

Willie Nelson & Ray Charles - Georgia on my mind: http://www.youtube.com/watch?v=BlLUMwo_VVU

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12.04.2010 A deal at least

Finance ministers signed off on the Greek rescue package at a telephone conference yesterday. Here are the main terms. See also Bloomberg for a detailed summary. EU contribution - €30bn in 2010, EU officials say IMF contribution €15bn (but details have yet to be worked out, and IMF says the size of its contributions depend on the situation and what Greece, not the EU, is asking for! We think the IMF’s participation might be higher than €15bn). Interest rates are based on Eurepo, plus margins, and will add to about 500bp for a three-year loan. Lending will be in both variable and fixed rate notes. Funding amount will not cover Greek borrowing over the next 12 months. Greece has not yet made an official request for aid. Decision is likely to lead to a short-term rally in Greek assets. It is a three years package. It is not clear yet, how much Greece might need in 2011 and 2012.

Greek finance minister George Papaconstantinou said the government plans to go ahead with debt sales, including a dollar-denominated bond, without taking up the offer for aid. Deal became possible after Germany gave up its insistence of Greece to pay market rates. We hear that Merkel and her advisers had been digging in until late Thursday, but were finally persuaded to accept. IMF delegation to arrive in Brussels, and to negotiate the next steps, including the final size of the package, and further details. Strauss-Kahn said IMF stands ready to make available a credit facility for several years. Wolfgang Munchau welcomes the fact that there is a deal, that is more the original amount, that it is not at market rates, but believes that this is probably not enough to save Greece from Bankruptcy. The adjustment burden is simply too big. Also, this deal, and the way it was struck, and structured, cannot conceivably serve as a crisis resolution regime. He draws the analogy with Bear Stearns and Lehman, and says Greece is a Bear Stearns, and Spain/Portugal may be a Lehman.

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Lex makes the point that Greece’s fiscal nightmare is not over. The budget deficit cutting plan includes a 10% salary cut. Now that the bailout is agree, there is no more room for excuses. Jean Quatremer says it was a shame that this agreement took so long, but he said in the end it was always clear that the EU would do the right thing, and not let any of their members fail. This is something that the eurosceptics have persistently misjudged. Karl Whelan, of the Irish economy blog, makes the case for a relatively high interest rate to be applied to Greece (blog entry was written before the announcement of the deal). “...a program that (a) Made it clear that Greece would be able to roll over private sector debt because the EU will intervene to provide the funds (b) Credibly lead to the adjustments in Greece’s structural deficit should stabilise the fiscal situation in Greece and lead to a return to lower borrowing rates for Greece. That the EU should charge a high interest rate for providing the funds for (a) and overseeing the program for (b) is, it could be argued, not unreasonable. Indeed, if the rates associated with (a) are not high enough to be painful then it may be difficult to get much traction going on (b).” Trichet says some countries will have to accept deflation In an interview with Il Sole 24 ore, Jean-Claude Trichet said to regain competitiveness, some countries will have to keep inflation below the EU average for a sustained period. When asked, whether this would include accepting a period of deflation, he replied with a Yes. “It is normal that some regions, after growing above the EMU average for some time, and after having accumulated high national inflation, experience a correction and therefore a period of negative inflation, as it is currently happening in Ireland.” Poland the euro after the crash Reuters has a good question and answer article about the Polish central bank after the death of Slawomir Skrzypek, who died along with President Lech Kaczynski and 80 other Polish officials in a plane crash in Smolensk. Skrzypek was a eurosceptic, and whoever replaces him is likely to take the foot off the break for Polish euro entry. The article also contains a number of names, who might be possible successors, most of them more hawkish the Skrzypek, who was frequently outvoted http://www.eurointelligence.com/article.581+M5ca49a363f8.0.html#

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Greece Wins EU45 Billion Aid Pledge to Blunt Crisis (Update3) By James G. Neuger and Jonathan Stearns

April 11 (Bloomberg) -- European governments offered debt- burdened Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates as they try to end its fiscal crisis and restore confidence in the euro. Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. That’s less than the current three-year Greek bond yield of 6.98 percent. Another 15 billion euros would come from the International Monetary Fund. “This is a step of clarification that markets are waiting for -- it shows there is money behind this,” Luxembourg Prime Minister Jean-Claude Juncker told reporters in Brussels today after chairing the ministers’ conference call. “The initiative for activating the mechanism rests with the Greek government.” With the euro facing the sternest test since its debut in 1999, the 16-nation bloc maneuvered around rules barring the bailout of debt-stricken countries, aiming to prevent Greece’s financial plight from spreading and to mute concerns about the currency’s viability. Germany also abandoned an earlier demand that Greece pay market rates. Nuclear The euro has dropped 5.7 percent against the dollar this year as the discord within Europe over the response to the Greek crisis sapped faith in Europe’s economic management. It now buys $1.35. “This is a huge amount,” said Stephen Jen, managing director at BlueGold Capital Management LLP in London and a former IMF economist. “This is more than a bazooka. They have gone nuclear on the issue of Greece. In the short run the market is short Greek assets so we’ll get a rally in those.” A Greek finance ministry official said today that market reaction to the aid package over the next few days will determine future developments. While Finance Minister George Papaconstantinou welcomed the announcement, he said the government wasn’t requesting the bailout and planned to go ahead with planned debt sales. Greek officials plan a roadshow to U.S. investors this month before selling a dollar-denominated bond.

11 Greece will need to continue to tap markets even if it triggers the bailout, Erik Nielsen, chief European economist at Goldman Sachs Group Inc. in London, said in a note to investors. Not Over Yet The 30 billion euros from the EU “will not fully cover the Greek government’s financing needs for the next 12 months, let alone for 3 years, so Greece will still rely on commercial money beyond the April-May payments, and whether such money will become available will very much depend on how credible the policy framework is and what investors think will happen beyond the program period,” he said. “Unfortunately, this thing is unlikely to go to bed any time soon.” The teleconference of euro-region officials, which included European Central Bank President Jean-Claude Trichet, left open how much Greece might need in 2011 and 2012, the final years covered by today’s decision. Aid will flow to the Greeks “when they ask for it,” Cypriot Finance Minister Charilaos Stavrakis told reporters in Nicosia. “The decision was unanimous.” European governments would put up about two thirds of any aid, with the IMF chipping in the rest, European Union Economic and Monetary Commissioner Olli Rehn said. Yields Soar “We cannot speak on behalf of the IMF, but we know that they are ready to cooperate and contribute with a substantial amount,” Rehn said. Greek, EU and IMF officials will meet tomorrow to discuss details. European pledges in February and March to provide aid in an emergency failed to prevent Greek 10-year bond yields from soaring to 7.51 percent on April 8, according to Bloomberg generic prices, amid concern that Greek Prime Minister George Papandreou’s government will be swamped by its bills. The jump in Greek yields to the highest since December 1998 helped overcome resistance to a loan package in Germany, which as Europe’s biggest economy would contribute almost a third of the loans, the largest single share. The premium investors demand to buy Greek 10-year bonds instead of German bunds jumped to 442 basis points April 8, easing to 398 basis points the next day as speculation over a rescue gained steam. Euribor Link In the compromise hammered out today, the European loans would be tied to Euribor and priced above rates charged by the IMF, a nod to German opposition to granting a subsidy to a country that failed to live within its means. The EU will offer a mix of fixed-rate and floating rate loans. The IMF would charge less than the EU. Both types of funding would be offered at the same time, Rehn said. Transfers to Greece would be made by the ECB. Greece last week raised its estimate of the 2009 deficit from 12.7 percent of gross domestic product to 12.9 percent, the highest in the euro’s history and more than four times the EU’s 3 percent limit. While rules dictated by Germany in the 1990s foresee fines for countries that go over the limit, no penalty has ever been imposed. Germany also led the charge to loosen the rules in 2005 after three years of excessive deficits.

12 While all euro-region governments promised to contribute, some like Ireland would need parliamentary approval. Ireland, itself reeling from the financial crisis, would require “national legislation,” Finance Minister Brian Lenihan said in an e-mailed statement. No Request The Greek government has yet to request a European lifeline, confident that this year’s planned budget cut of 4 percentage points will stem speculation that it is heading for the euro region’s first-ever default. Fitch Ratings highlighted that risk by shaving Greece’s debt rating to BBB-, one level above junk, on April 9. A combination of higher taxes, lower spending and salary cuts for public workers have prompted strikes and protests against Papandreou, a socialist elected in October on promises of raising wages. The EU showed no sign of setting tougher conditions today. Rehn hailed the Greek government for implementing “a very bold and ambitious program.” Greece needs to raise 11.6 billion euros by the end of May to cover maturing bonds, and another 20 billion euros by the end of the year to pay debt coupons and finance this year’s deficit. The debt agency plans to offer 1.2 billion euros of six- month and one-year notes on April 13, in a test of investor confidence in today’s pledge. A global bond in dollars will be sold in the next two months, Petros Christodoulou, Greece’s debt-management head, said on March 31. To contact the reporters on this story: James G. Neuger in Brussels at [email protected]; Jonathan Stearns in Brussels at [email protected]; Last Updated: April 11, 2010 14:22 EDT http://www.bloomberg.com/apps/news?pid=20601085&sid=aE3sf8VtpYYU

13 FT's rolling global market overview Greek bonds and stocks rebound on news of rescue By Jamie Chisholm, Global Markets Commentator Published: April 12 2010 08:22 | Last updated: April 12 2010 10:07 09:25 BST: Greek bonds rebounded and global stocks hit fresh cyclical highs on Monday as investors welcomed news of a €30bn discount loan deal for Greece. However, gold touched its best levels for 2010 and the euro gave up early gains as some in the market remain concerned that high levels of government indebtedness in developed nations makes major reserve currencies unattractive. Gold surges in flurry of haven buying - Apr-09 Yen benefits from Beijing policy talk - Apr-08 The FTSE All-World equity index rose 0.4 per cent to its highest value since September 2008, and commodities saw further buying as hopes for global economic growth held sway. The worries over Greece’s fiscal position have hurt the euro over recent months and caused temporary wobbles in risky assets, as investors feared the damage any sovereign debt default contagion could wreak on the fragile eurozone economy. However, the claim that stocks should benefit further from any form of Greek resolution appears somewhat disingenuous. The S&P 500, for example, is 4 per cent higher than where it was when the latest concerns about Greece first hit hard in January. Indeed, the S&P 500 is 12 per cent higher than the interim trough hit at the height of Greek fiscal funk in February. Monday’s Market Menu What’s affecting risk appetite Risk on ● Backstop: Greek aid package calms eurozone debt markets. ● UBS: figures highlight recovery for financials. Risk off ● Altitude: thin air for stocks after rally, US earnings baked in. ● Careful now: gold bounce sending a signal? Of greater importance to traders, perhaps, should be the outcome of the first-quarter US earnings season, which kicks off later on Monday with Alcoa. The question investors will need to ask themselves is: even if the results season delivers the expected profit rebound, how much of this is already baked into the equity market cake?

● The euro bounced to its highest in three weeks versus the dollar in Asian trading as forex desks got their chance to react to news of the EU/IMF package. It had already rallied sharply on Friday when talk of the deal began to swirl. But Monday’s pop was short-lived and the single currency was later down 0.1 per cent to $1.3604.

14 The dollar dropped 0.5 per cent to 80.50 on a trade-weighted basis as supposed haven flows reversed.

● European bourses took an initial shine to the news regarding Greece and also welcomed an earnings report from Swiss bank UBS. However, the early ebullience soon faded as investors questioned current valuations and the markets’ recent strong run. The FTSE Eurofirst 300 was flat per cent and the FTSE 100 in London added just 0.1 per cent. Athens leapt 4.6 per cent as Greek banks bounced back. US equity futures suggest Wall Street may open higher by about 0.2 per cent. The FTSE Asia-Pacific index added just 0.1 per cent after sellers emerged later in the day among Chinese stocks. The Hang Seng in Hong Kong lost 0.3 per cent and Shanghai fell 0.5 per cent, with property shares hurting as the authorities again made noises about clamping down on speculative lending. Thailand’s stock market plunged another 4.6 per cent after the political situation worsened. Gaining ground were Tokyo, where the Nikkei 225 rose 0.4 per cent, and Sydney, where M&A activity and stronger resources prices helped the S&P/ASX 200 advance 0.5 per cent.

● Greek sovereign bonds saw increased buying as the European session progressed. The yield on 10-year Greek notes dropped 63 basis points to 6.5 per cent, taking the spread with Bunds 329 basis points. The yield on the two-year note plunged 104 basis points to 5.83 per cent and the cost of insuring Greek debt against default fell more than 7 per cent. US benchmark 10-year Treasury yields rose 4 basis points to 3.92 per cent.

● Gold rose to its most expensive in four months as the precious metal benefited from a fall in the dollar and its resurgent haven status. The bullion climbed 0.4 per cent to $1,164. Indsustrial commodities saw more buying, with copper up 0.8 per cent o $7,975 per tonne and oil up 0.6 per cent to $85.43. http://www.ft.com/cms/s/0/f80736fe-45f4-11df-8769- 00144feab49a.html?catid=8&SID=google tml?catid=8&SID=google

15

COLUMNISTS Wolfgang Munchau A Greek bail-out at last but no real solution By Wolfgang Münchau Published: April 11 2010 19:58 | Last updated: April 11 2010 19:58 Finally there is a deal. It came late, and only after the financial markets – and a rating agency – forced the European Union to put up or shut up. It will provide Greece with emergency loans at a rate of about 5 per cent, which is lower than present market rates. There is no agreement yet about the overall amount of money to be disbursed. But I hear that the total figure will be much larger than has been widely reported – somewhere between €50bn and €60bn. It is not the worst conceivable deal. That would have been the German idea of funding at market rates. It is evident that the economic advisers of Angela Merkel, the German chancellor, have little experience with the resolution of international solvency crises. Otherwise they could not have conceivably insisted on such a ludicrous idea. The 5 per cent interest rate that has been agreed is, in my view, still relatively high given the situation Greece is in, and the likely debt dynamics it will face in the next few years. However, 5 per cent is better than the 7 per cent or so of the recent market rates for Greek two-year bonds. Moreover, the European Central Bank decided last week to prolong the exceptional collateral regime, which allows banks that own Greek bonds to exchange their assets for cheap central bank funds. This was a significant announcement, and will provide Greece and its creditors with breathing space. So will this stave off insolvency? It is important to distinguish the near-term insolvency as a result of the failure to roll over existing debt, and the country’s long-term solvency position. This deal, I am confident, will solve the first issue. As I predicted last week, Greece will not default this year. But I am still sticking with my second prediction that Greece will eventually default. The numbers simply look too bad. The adjustment effort Greece is asked to make will be one of the largest in history. But unlike other countries that made a similar effort in the past, Greece cannot devalue; it faces a much more challenging global environment; it has a weak fiscal infrastructure; a low consensus in society in favour of deep reforms; and a fragile financial system. The agreed bail-out terms do not exactly offer much relief, except in the very short-term. It will become clear very soon that this loan agreement represents a net transfer of wealth from Athens to Berlin – and not the other way round. All this points to an eventual but not imminent default. It is important to remember that default does not usually imply a complete wipe-out. Bondholders usually recover some proportion of their holdings. I would expect that some form of restructuring of the Greek debt is inevitable, whereby bondholders will see a percentage subtracted from the par value of the assets. The 5 per cent interest rate, relative to the market rate, may already be a metric of the size of a future restructuring. It is hard enough to imagine how Greece can get out of a simultaneous debt and competitiveness crisis without falling into some vicious circle – debt deflation, for example, or just extreme public hostility that will thwart the government’s

16 reform efforts. But it is impossible, at least for me, to imagine a situation in which Greece can manage to extricate itself from a pending catastrophe without some debt restructuring. The EU and its institutions do not come out of this with much glory. The European Council made a political statement on February 11 saying that it is willing to support Greece in principle, while subsequently failing to agree on a firm package. In March, they appeared to suggest they had a deal, when, in fact, they did not. There was a lot of deceit in the process. It took a speculative attack on the Greek bond market to bring about concrete action. A lot of harm has been done in the meantime. It is still not a coherent policy. Many questions remain. For example, what will happen if Greece fails to repay the loan? Will the bond market interpret the deal as a sign that the EU will not let anyone fail who acts in good faith? Or will it start testing the EU’s solidarity for Portugal and possibly even Spain or Italy? There will come a point when the EU will no longer be in a position to help, even if it wants to. The cost of the Greek bail-out is not high, compared with the hypothetical alternative of uncontrolled Greek default inside the eurozone. Portugal is a smaller country than Greece, in terms of gross domestic product, but Spain is the eurozone’s fourth-largest economy, with an annual GDP of more than €1,000bn ($1,350bn, £875bn) at current market prices. Is this going to be a sovereign-level re-run of the bail-out decision taken by the US government in respect of Bear Stearns and Lehman Brothers? Will Greece be lucky because it was the first ones to receive help, while Portugal and Spain, like Lehman beforehand, will enjoy no such support? It is impossible to answer these questions. But it is evident that whatever will be agreed will only apply to Greece. The EU has still not provided a generalised crisis resolution regime. I suspect that smart investors know that. http://www.ft.com/cms/s/0/762c8ebc-4596-11df-9e46-00144feab49a.html

17 Coulisses de Bruxelles, UE

Jean Quatremer La zone euro vole, enfin, au secours d’Athènes

Le plan de sauvetage de la Grèce est enfin prêt, dans ses derniers détails. Au cours d’une conférence téléphonique qui a eu lieu aujourd’hui, les seize ministres des Finances se sont mis d’accord pour lui prêter, en 2010, et si elle le demande, 30 milliards d’euros sous forme de prêts bilatéraux auxquels s’ajouteront 15 milliards d’euros du Fonds monétaire international (FMI). Ils ont vu large, les besoins de financement d’Athènes n’étant plus, pour cette année, que de 35 milliards d’euros. Le plan européen s’étalera sur trois ans afin de donner de l’air à la Grèce et lui donner le temps de procéder aux réformes nécessaires : « les montants pour les années suivantes seront déterminés ultérieurement, en fonction de l'évolution de la situation financière de la Grèce », a ainsi expliqué Jean-Claude Juncker, le président de l’Eurogroupe. On ne sait pas exactement comment se répartira cette somme entre les pays de la zone euro. Juncker a simplement précisé que tout le monde participera en fonction de ses moyens. Mais l’élément le plus important pour donner de la crédibilité à ce plan est là : l’Allemagne sera bel et bien présente ! Outre les montants, les ministres des Finances ont précisé un élément fondamental, celui des taux d’intérêt qu’ils demanderont à la Grèce : ce seront des taux qui varieront en fonction de la durée et du montant du prêt, mais qui devraient se situer globalement « autour de 5 % », a précisé le commissaire chargé des affaires économiques et monétaires, Olli Rehn. Quant au FMI, il se contente de taux compris entre 1,25 % et 3,25 %. Or, actuellement, les marchés exigent, pour prêter de l’argent à la Grèce, et selon la durée du prêt, entre 6 % et presque 8 %, ce qui intenable à moyen terme. Le taux que les pays de la zone euro vont consentir à la Grèce se situeront donc au-dessus des taux irlandais et portugais (autour de 4 %), mais en dessous

18 des taux de marché. Surtout, tous les États qui participeront à ce mécanisme gagneront de l’argent, les prêts consentis étant davantage rémunérés que ceux qu’ils obtiennent sur les marchés (Berlin se finance autour de 3 %). Bref, les investisseurs ont désormais la garantie absolue que la Grèce ne tombera pas en cessation de paiement. Le plan européen est en effet susceptible de couvrir l’ensemble des besoins du pays : il ne lui reste plus à trouver pour cette année que 35 milliards d’euros sur les 53 milliards dont elle avait besoin. Les marchés n’ont donc plus à avoir peur d’une éventuelle cessation de paiement (qui n’a jamais existé que dans leur esprit) et devraient à nouveau prêter de l’argent à la Grèce à un taux plus raisonnable, proche de ce qui est demandé à l’Irlande, par exemple. Il est même possible que le plan européen n’ait pas besoin d’être activé. Il est dommage qu’il ait fallu attendre aussi longtemps pour aboutir à un plan de sauvetage précis et convaincant propre à rassurer les marchés. On ne voit pas, en particulier, ce qu’Angela Merkel a gagné en faisant trainer une solution au- delà du raisonnable, alors que ses ministres des finances successifs, le social-démocrate Peer Steinbrück et le chrétien- démocrate Wolfgang Schäuble, voulaient aller vite. Il reste, comme je l’ai dit à de multiples reprises sur ce blog depuis plus d’un an, qu’il était inimaginable que la zone euro laisse tomber l’un des siens au risque de déstabiliser la monnaie unique. Une nouvelle fois, les eurosceptiques de tous poils ont eu tort. Car ils oublient toujours une chose : la force de la volonté politique en Europe. Les gouvernements de l’Union viennent une nouvelle fois d’en faire la démonstration.

Rédigé le dimanche 11 avril 2010 à 19:42 http://bruxelles.blogs.liberation.fr/coulisses/2010/04/la-zone-euro-vole-enfin-au-secours- dath%C3%A8nes.html

19 The European Central Bank

Home > Press > Speeches & Interviews > By date > 2010 > 9 April 2010 Interview with Il Sole 24 Ore Interview with Jean-Claude Trichet, President of the ECB, and Il Sole 24 Ore, conducted by Beda Romano Il Sole 24 Ore: Greece is in dire straits as it struggles with a huge public debt and a fall in competitiveness. Some market players and newspaper commentators see Italy as being the next in line to experience a financial crisis in the euro zone. Trichet: Of course, Italy is not at all in the same situation of Greece. Your country has shown resilience in this difficult period. In particular it was able to contain its yearly budget deficit and it has committed to get back to a sustainable situation according to the European rules. The ECB strongly encourages it to implement rigorously this programme. This said, the current crisis has demonstrated that all 16 countries of the euro zone must work hard, in a determined and efficient way, in order to make their economies more flexible and elevate their growth potential thanks to determined structural reforms. Improving labour productivity in particular is good for export growth and job creation. If this had been done more efficiently in the last years better results would have been attained in Italy as well as in the euro area as a whole. Il Sole 24 Ore: The EU plan to help Greece relies on bilateral aid from EMU countries and on the involvement of the International Monetary Fund. The ECB was clearly against the IMF participation. What do you make of the EU plan? Trichet: I was not against the IMF involvement in itself. I was against the involvement of the IMF alone. I have always been in favour of the maximum level of responsibility exerted by the governments of the euro area as is prescribed by the Stability and Growth Pact. The pact is at the very heart of EMU: it calls for member countries to assess and judge the fiscal policies of their peers; this peer’s surveillance can impose sanctions. In the days preceding the EU meetings, I called all governments to live up to their treaty responsibility and to the provisions of the Stability and Growth Pact which is essential for the EMU to function well. From this point of view, the declaration of the euro area Heads of State or Government is appropriate. It is also a good and workable solution. Il Sole 24 Ore: Do you expect it will be used? Trichet: At this moment in time I don’t expect this mechanism to be necessary. Greece should proceed with its recovery program in a very determined way as committed in front of the Eurogroup. Il Sole 24 Ore: Is a default of Greece a distinct possibility as some commentators seems to expect? Trichet: It is not an issue, taking into account the decisions taken by the Greek government to reduce the public deficit and the statement by the euro area Heads of State or Government. Il Sole 24 Ore: Will the current crisis suggests a slowdown of the EMU enlargement process?

20 Trichet: Participating in the euro zone requires from all member governments sound fiscal policies, a sound monitoring of production costs and structural reforms. Today’s difficulties have shown that a bad management influences negatively all participants, while a good one is positive to all, given how our economies are closely intertwined because of the single currency. As I said before, peer pressure is a crucial aspect of the euro zone functioning and it has a profound economic rational and legitimacy. Therefore it is also true that to enter the euro zone there must be an overwhelming sentiment within society that the country is preparing to share a common destiny with the other members. This calls, in my opinion, on newcomers to have a clear bipartisan agreement on the desire to join EMU. Il Sole 24 Ore: In a certain sense participation in the euro area must have both a multinational and a multipartisan framework. Trichet: That’s correct. We are participating in an endeavour of great historical importance. One cannot jump in and jump out of the euro area as one hops on and off from a bus. Participation in EMU commits the destiny of a country. At the start there were 11 member states; today we are 16. Nine other countries have no “opting out” clause and are supposed to enter the euro area when they meet the criteria. We will see what happens. Needless to say that any country that seeks to join EMU will have to fulfil all the Maastricht criteria not only for one year but also on a sustainable basis. Il Sole 24 Ore: How do you judge the mood in the countries that are queuing to enter the euro area? Do you see a broad acceptance of the idea that EMU commits the destiny of a country? Trichet: In some cases there is a clear and broad political consensus to join EMU. In others there is not. In any case I consider that you have to judge the process through the lenses of history. This said, I do believe that all EU institutions and governments should point out the euro area’s meaning in terms of sharing a common destiny. More specifically, we all must understand that we have to fully accept peer surveillance to preserve the good functioning of our monetary union. Il Sole 24 Ore: What about Germany: Convincing the Federal Republic to help Greece was a long and difficult process. Do you think that Germany believes in the common destiny created by the euro? Trichet: I trust that all EMU countries are aware of this fact. And I trust the Germans as well as the Italians, the French, the Spanish, the Dutch and all other fellow citizens were all aware of this aspect when they joined EMU. By the way Germany demonstrated how attached it is to the single currency when it argued in favour of the Stability and Growth Pact, which is precisely based on peer responsibility and peer pressure and is a vivid illustration of how our destinies are interconnected. Therefore, yes, I believe that Germany is fully aware of the fact that we are sharing a common destiny. Remember in the run up to the Maastricht treaty: both Helmut Schmidt and Helmut Kohl were at the forefront of European integration with their peers, following in the footsteps, in particular, of Robert Schuman and Alcide De Gasperi. Il Sole 24 Ore: Regarding Germany, the French finance minister did criticize its economic model based on exports rather than internal demand, pointing out that its partners cannot count sufficiently on German imports. Are you in agreement with Christine Lagarde? Trichet: No, and for a number of reasons. Firstly, had Germany not increase its competitiveness in the first 11 years of EMU by keeping its costs and inflation under control, the euro area as a whole would have had the threat of higher inflation and therefore a tougher monetary policy. Secondly, Germany, with a large current account surplus, is financing the current account deficit of other countries members of the euro area. Thirdly, the Federal

21 Republic is a major world competitor in sectors such as machine tools and industrial equipment. Its global competitiveness is a major asset for the euro area given how closely intertwined EMU countries are. Therefore, I would point out to all those who argue in a similar fashion that what looks as a disadvantage for the euro area as a whole from a specific angle is in reality an advantage when seen from the right perspective. Il Sole 24 Ore: But in a more general way Ms Lagarde did point out that the euro area is experiencing large economic imbalances. Is there a Europe-wide agenda to solve this problem? Trichet: The aim must be to elevate significantly growth potential in all countries through the structural reforms that are overdue in Europe. This will remain strategically important in the next decade. The 2020 Agenda will have to be implemented in a more effective way than the 2010 Lisbon Agenda, as President Van Rompuy has recommended. More generally let me say that given the nature of monetary union, some countries, because of a rapidly aging population for example, will have to run current account surpluses, while other countries with very significantly fewer pension liabilities will not be called to run such surpluses. Similarly, some countries, to regain competitiveness, will have to keep inflation below the EU average. So a certain degree of dispersion of economic parameters might be possible within an integrated economy which has the dimension of the United States, provided this dispersion has economic justification. Il Sole 24 Ore: Even accepting a period of deflation, with all the possible social consequences this might have? Trichet: Yes. We are an immense economy. It is normal that some regions, after growing above the EMU average for some time, and after having accumulated high national inflation, experience a correction and therefore a period of negative inflation, as it is currently happening in Ireland. Il Sole 24 Ore: The recent EU declaration regarding the Greece plan says that member states should push ahead toward a stronger economic governance. What are you expecting: a more coordinated approach or a transfer of competencies from the national to the supranational level? Trichet: As citizens we all have personal opinions on this matter. As a citizen, I would call myself when time comes and when people are ready to move towards an accomplished political federation. As of today our aim is to make the current institutional framework work as best as possible. We call for the full respect of the present Treaty. EMU is politically a bold endeavour: don’t forget that with regard to fiscal policies the Treaty allows the college of governments to impose decisions on other governments and parliaments. Implementing fully the Treaty and the Stability and Growth Pact calls for a much stronger governance in the future than what has been experienced in the past years. Il Sole 24 Ore: We are at the very heart of democracy: no taxation without representation. Trichet: I repeat: peer surveillance on government and parliament as regards fiscal policy is a bold political endeavour. I do believe that by going back with great determination to the letter and the spirit of the Stability and Growth Pact we will make a jump in terms of governance of the 16 members of the euro area, and that jump is overdue. Moreover, the 2020 Agenda is also extremely important to reinforce economic governance in the EU as a whole, at the level of the 27. Il Sole 24 Ore: A last word: are you optimistic that EMU will survive the current crisis?

22 Trichet: Absolutely. Sometimes, we don’t realize how much Europe has achieved in the last half a century. The founding fathers could not even imagine the creation of a Parliament elected by universal polling, of a European Court of Justice determining jurisprudence for Europe as a whole, of a fully integrated single market and of a single currency, today for 330 million fellow citizens and 16 countries. Europe has also proved in the past two years that it was able to cope with the worst global crisis since World War I. This has been in particular true for the central banks, the ECB as well as the National Central Banks, in Italy Banca d’Italia. We are experiencing a challenging historical period at a global level and I am fully confident in the capacities of Europe and of EMU to surmount the difficulties of the time. European Central Bank http://www.ecb.int/press/key/date/2010/html/sp100409_1.en.html

23 COMMENT Renminbi adjustment will not cure trade imbalance

By Yang Yao Published: April 11 2010 20:05 | Last updated: April 11 2010 20:05 Earlier this month, the US Treasury announced it would postpone the release of its semi- annual report to Congress on exchange policies, which China’s critics hoped would name the country as a currency manipulator. The delay is said to accommodate President Hu Jintao’s trip to Washington on Monday to attend an international arms control summit, although the critics were hardly mollified. In truth though, with or without the delay, do not expect the Treasury to cite China as a currency manipulator. If the Treasury was really serious about China’s currency intervention, it would have taken real action already. The Treasury can force China to end the renminbi’s peg on the dollar by stopping the sale of its bonds to China. The fact that it has not done so suggests it cares more about financing the budget deficit and the federal government’s spending programmes. The sale of Treasury bonds to China is vital to maintaining the currency peg. As large amounts of dollars flow into China through net exports and foreign investment, the Chinese central bank must buy up these dollars at the pegged exchange rate. These purchases release equally large amounts of renminbi inside China, which will lead to inflation if the central bank does not also intervene and issue interest-bearing bonds to sterilise the excessive renminbi money supply. Fortunately, because interest rates are lower in China than those on its US bonds, the Chinese central bank does not incur any accounting cost to carry out its sterilisation programme. If, however, the Treasury stopped selling bonds to China, the Chinese central bank would have to convert its dollars in China to other currencies, such as the euro, and purchase euro- denominated assets. These purchases would drive up the value of the euro and increase China’s conversion costs. Those costs may be high enough to reduce returns on China’s foreign reserves below what the central bank must pay on its sterilising bonds. At this point, to keep its accounts balanced, the central bank can either allow the renminbi to appreciate against the dollar so it needs to spend fewer renminbi to buy dollars, or to stop issuing sterilising bonds and allow domestic inflation. As domestic prices increase in China, Chinese goods will cost more dollars. Either way, the renminbi will appreciate. Stopping the sale of Treasury bonds to China would benefit the US. First, it would prevent Chinese savings depressing demand for American goods. Second, it would discourage the US government from deficit spending and prevent skyrocketing government debts. Third, it would avoid a trade war, which would benefit no one. The inconvenient truth, however, is that the Treasury needs cheap Chinese savings to finance many more urgent spending needs, including the new healthcare plan.

24 Some people in the US want to have it both ways – they want the renminbi to appreciate and they want China’s continuous supply of cheap money. But even if China is somehow able to do both and revalue the renminbi, will that help the US economy? Probably not – at least not in the case of moderate appreciation. Between July 2005 and June 2008, the renminbi appreciated against the dollar by 21 per cent on nominal terms, but China’s exports to the US still increased and trade surplus surged from $100bn in 2005 to $300bn in 2008. A sharper appreciation of another 20 per cent, as some have suggested, will probably have a stronger effect on the trade deficit but that will also kill growth of the Chinese economy, and China will never agree to that. Often overlooked is the fact that the renminbi is only pegged to the US dollar, so its undervaluation against other currencies, if it exists, is the direct result of the dollar’s own devaluation. If the US really wants to help other countries, it should not devalue the dollar. The renminbi’s peg prevents a freefall in the dollar, so helps countries that earned and saved the currency while it was strong. The trade imbalance between China and the US cannot be cured simply by adjusting the exchange rate. There are more fundamental concerns, such as labour market flexibility and the strengths of the two economies. We should focus on those and treat the exchange rate as something to be negotiated, instead of a political label used in antagonistic name-calling. The writer is director of the China Centre for Economic Research at Peking University and editor of China Economic Quarterly http://www.ft.com/cms/s/0/76d54674-4596-11df-9e46-00144feab49a.html

25 REPORTAJE: Vida&artes LA SOSTENIBILIDAD DE LAS CUENTAS PÚBLICAS El Estado de bienestar va rumbo a la UVI La crisis y la foto demográfica ponen en tensión las cuentas públicas en España - Se impone un nuevo contrato social El peso del gasto público nacional es inferior a la media de la OCDE La diana señala a los funcionarios y tal vez a los futuros pensionistas CLAUDI PÉREZ 11/04/2010

La Gran Recesión tenía que cambiarlo todo: el mercado libre o libertino, el dominio de una casta con mucho más dinero que sentido común, los excesos del capitalismo de casino. Una

26 ola de intervención pública ?de más Estado? cuando peor iban las cosas evitó una Gran Depresión. La Gran Recesión tenía que cambiarlo todo: el mercado libre o libertino, el dominio de una casta con mucho más dinero que sentido común, los excesos del capitalismo de casino. Una ola de intervención pública -de más Estado- cuando peor iban las cosas evitó una Gran Depresión. Irónicamente, sus consecuencias devuelven el péndulo cerca de donde estaba: "Una crisis que puso en duda el futuro del capitalismo acabará por poner en duda el futuro del Estado", ironiza desde Washington el sociólogo Norman Birnbaum. Al final, la Gran Recesión va a traer algunos cambios, pero por donde menos se esperaban: la crisis cuestiona las dos o tres grandes ideas que ha aportado Europa en el último medio siglo. Una de ellas es la construcción europea, amenazada por el ascenso de un populismo derechista, por la insolidaridad de Alemania en la tragedia griega, por ese sálvese quien pueda que deja muy tocado el euro. Relacionada con la anterior, la otra idea en crisis es el Estado de bienestar. EE UU lo amplía y en Europa (y particularmente en España) hay presiones para reducirlo. El mundo al revés. La diferencia entre la felicidad y la miseria, decía Charles Dickens, reside en no gastar sistemáticamente más de lo que uno ingresa. Y eso es lo que sucede ahora. ¿Puede España garantizar su Estado de bienestar tras el derrumbe de un modelo económico antaño burbujeante? La respuesta arquetípica en economía, y puede que en política, es un melancólico depende. Pero no es aventurado decir que vienen curvas: los ajustes (sin eufemismos: recortes de gasto y subidas de impuestos) son impepinables a corto plazo si como hasta ahora mandan los mercados. Aunque, atención: de ser así se corre el riesgo de truncar de raíz una recuperación que ni siquiera ha comenzado aún. Y a más largo plazo, el debate de nunca acabar de las reformas estructurales deberá traducirse en algo tangible. En plata: más recortes. Una vez más, eso es lo que sucederá si los mercados siguen dictando el guión, y no está claro que los políticos puedan (y ni siquiera que deban) llevarles la contraria: ahí está el caso de Grecia, tan diferente pero también tan amenazador. A corto, a medio y a todos los plazos, eso, en pocas palabras, son malas noticias. Conflictos a la vista. A mediados del pasado siglo se ponen los cimientos de una forma europea de entender el capitalismo que incluye sanidad y educación universales, y lo que en su momento fue una revolución: las pensiones. Seguridad desde la cuna hasta la muerte. En España eso empieza más tarde, pero se desarrolla con rapidez: "En sólo tres décadas se ha puesto en pie un edificio que aún no es comparable con el Estado de bienestar de los países nórdicos, ni siquiera de los centroeuropeos, pero con unos estándares aceptables", asegura Jesús Fernández-Villaverde, de la Universidad de Pensilvania. "El problema es que, con el tiempo, el Estado -y las autonomías, que no son más que eso mismo: Estado- hace cada vez más cosas porque la riqueza del país se multiplica, la población aumenta y demanda más servicios, la esperanza de vida sube. Y en paralelo, izquierdas y derechas se meten en una carrera de reducción de impuestos con el argumento falaz de que eso se traducirá en más actividad económica y a la postre más recaudación. Hasta que ese edificio se viene abajo con la crisis, que de alguna manera va a obligar a repensar ese contrato social que llamamos Estado de bienestar", asegura el profesor del IESE Alfredo Pastor, ex secretario de Estado de Economía socialista. Hay varias ideas profundamente equivocadas que contaminan todo este debate. Para empezar, esa historia que oímos constantemente de una economía europea estancada en la que los impuestos elevados y los beneficios sociales generosos han eliminado los incentivos y detenido el crecimiento y la innovación, se parece poco a los hechos. "La lección de Europa es en realidad la opuesta a la que cuentan los conservadores: Europa es un éxito económico; la

27 democracia social funciona", escribía en estas páginas hace tres meses el Nobel Paul Krugman. Los equívocos tienen, además, versiones puramente españolas, basados en prejuicios o incluso en errores intencionados. Hecho: el peso de los funcionarios sobre el total de trabajadores es en España menor que en las economías con las que se compara. Hecho: el peso del gasto público total es inferior; no llega a la media de la OCDE ni en sanidad, ni en pensiones, ni en educación ni en prácticamente nada. Hecho: los impuestos son menores, la presión fiscal es muy inferior a la de los países con cuyos Estados de bienestar quiere compararse el español. "España quiere ser Suecia y a la vez EE UU: quiere flexibilidad y bajos impuestos, como los estadounidenses, y a la vez un gasto social elevado y un Estado de bienestar impecable, como los suecos. No se puede ir en las dos direcciones: hay que escoger", critica André Sapir, de Bruegel. Y más ahora. Las huellas de la crisis van a ser profundas en términos de paro, empobrecimiento de las clases medias y desigualdad, pero también en lo relativo al déficit y la deuda. Cuando alguien ha estado al borde de la muerte eso le hace revisar sus prioridades y valores: el capitalismo lo estuvo en algún momento de octubre de 2008, tras la caída de Lehman Brothers; ahora son algunos Estados -y España está en esa lista negra- los que se enfrentan a una situación potencialmente devastadora. Es el momento de repensar algunas cosas. "En España y en otros países mediterráneos los Estados de bienestar son muy ineficientes, y además no mueven suficientes recursos de ricos a pobres", critica Alberto Asesina desde Harvard. "Es necesaria una combinación de reducción del fraude, recortes en el gasto y reformas que no perjudiquen a los más desfavorecidos. Hay muchos grupos sobreprotegidos (desde el improductivo funcionariado a los prejubilados de 50 años) cuyos beneficios deben ser reducidos", afirma donde más duele. Desde dentro, los economistas consultados abogan por recetas similares, pero no es nada fácil ponerle el cascabel al gato. Un día, 100 destacados economistas proponen una reforma laboral con medidas de flexibilización; al día siguiente salen 700 diciendo prácticamente lo contrario. Esa misma polarización se da en la arena política con la educación, con las pensiones, con el sistema de salud, con todo. La capacidad de consenso pareció acabarse con los Pactos de la Moncloa. Pero al menos hay un cierto acuerdo en los boquetes de ese edificio. Ignacio Zubiri, de la Universidad del País Vasco, describe algunos: "Es intolerable que el ex director general de una entidad financiera cobre el paro, es inadmisible que las ayudas a la natalidad sean exactamente iguales para un Botín que para alguien sin apenas ingresos, es inaceptable la supresión del impuesto sobre el patrimonio o las enormes rebajas en sucesiones, o la tributación de las Sicav, o en general la cada vez mayor falta de equidad del sistema fiscal, y es imprudente que algunas pensiones no contributivas no se financien vía impuestos, o que nos jubilemos a los 62 años: eso es insostenible porque, al fin y al cabo, como país somos más pobres, bastante más pobres de lo que creíamos. Hay que redefinir el Estado de bienestar, dirigirlo a quien realmente lo necesita". Luis de Guindos, ex secretario de Estado con el PP, asegura que hay margen para retocar "la inversión pública, los sueldos de los funcionarios (teniendo en cuenta que no son precisamente ellos quienes van a perder el empleo y que algún genio aumentó su sueldo el 3,7% en 2009), hay margen de mejora en la gestión de las autonomías en sanidad y educación, y se pueden tocar aspectos de las pensiones como la ampliación del plazo de cotización. Nos jugamos mucho si eso no se hace y España sigue perdiendo credibilidad fiscal". En fin: la diana señala a los funcionarios y tal vez a los futuros pensionistas, a la inversión pública y a las subidas de impuestos: "Eso es tan desafortunado y tan triste como necesario",

28 afirma categórico el catedrático de la UPF Guillem López-Casasnovas, uno de los grandes expertos españoles en Hacienda Pública. "De lo contrario hay serios riesgos de tener una crisis fiscal a la griega", abunda. No hay comidas gratis: una economía que ha vivido por encima de sus posibilidades debe purgar sus excesos tarde o temprano. "La clave será repartir las cargas de la crisis: hay que poner sobre la mesa varias píldoras muy duras de tragar. Y hacer que toda la factura recaiga en sindicatos, funcionarios y beneficiarios del gasto social sería inaceptable: hay que subir impuestos a las rentas altas para que el ajuste no penalice mayoritariamente a las clases populares", señala López-Casasnovas. Y aun así, eso apenas vale para salir del paso, de esa ratonera fiscal en la que ya está metida Grecia. La parte del león del gasto se va en pensiones, sanidad, educación y subsidios de paro, y se iría también en gastos sociales si la dependencia fuera algo más que una ley. A pesar del agujero en las cuentas públicas, el grueso del Estado de bienestar no puede permitirse estar en crisis porque sus prestaciones ya son reducidas. No parece fácil bajarle el sueldo a un país de mileuristas para que la economía gane competitividad, como piden algunos premios Nobel. Y la misma lógica vale para el Estado de bienestar: es tremendamente difícil recortar las pensiones cuando la pensión media es tan baja (775 euros). Ni uno solo de los 15 economistas, sociólogos y políticos o ex políticos consultados para este reportaje cree que haya que rebajar los servicios fundamentales. "Reducir el gasto en educación sería un desastre: España ya ocupa pésimos puestos en términos de fracaso escolar, paro juvenil o competitividad como para planteárselo", apunta el ex ministro socialista Jordi Sevilla. "Lo mismo ocurre con sanidad y pensiones; por ahí sólo es posible actuar desde las reformas estructurales, desde el pacto y con la seguridad de que los efectos sólo llegarán a largo plazo: reconversión industrial del modelo sanitario (un debate serio sobre el copago, una reforma focalizada a tratar a los enfermos crónicos y a los dependientes), retoques en las pensiones (ampliación selectiva de la edad de jubilación, financiación con impuestos) y evidentemente una reforma laboral", añade Sevilla. El sociólogo Gregorio Rodríguez Cabrero considera que los recortes, además, pueden ser contraproducentes. "El gasto en educación, sanidad y servicios sociales es una gran fuente de empleo, contribuye a generar demanda, incrementa la productividad: es una inversión social de futuro y aumenta el bienestar del presente. El fetichismo del déficit aboga por la contención del gasto, pero la obsesión por el déficit será una fuente potencial de conflictos sociales", advierte. En el fondo, tras la supuesta crisis del Estado de bienestar se esconde un jugoso debate ideológico de fenomenales consecuencias para la ciudadanía. A un lado, los mercados, los bancos y una parte de los economistas, advirtiendo del negro futuro de un país con un déficit que supera el 10% del PIB. Al otro, quienes piensan que el debate está excesivamente viciado por la sostenibilidad financiera, por el economicismo, por quienes sostienen que las matemáticas del déficit definen la agenda política por una combinación de cobardía y miopía política. Vicenç Navarro, de la Pompeu Fabra, es uno de ellos. "Mientras EE UU contrata a miles de funcionarios, aprueba una reforma sanitaria a la europea y sale con ello de la crisis, España decide recortar el 80% la oferta de empleo público, se obsesiona con el déficit, ve como algo inevitable la cura de adelgazamiento del Estado. El problema de España no es la deuda pública, sino el paro. ¡Un 20%, un 40% de paro juvenil! El Gobierno toma la línea opuesta a la que recomiendan organismos tan poco sospechosos de izquierdistas como el FMI: no retirar estímulos hasta que salgamos de esta". "Además", añade, "es urgente una subida de impuestos a las rentas altas que acabe con la falta de progresividad en el sistema fiscal, para gastar ese dinero en empleo público y en estimular la demanda", avisa Navarro, en una tesis que

29 defiende también -con matices- Josep Borrell: "Sistema fiscal y Estado de bienestar están directamente relacionados; es un error reducir una parte y pensar que la otra no se va a ver afectada". Y aún hay una tercera vía en el debate: quienes afirman que cierta izquierda ha agotado su discurso, ha muerto de éxito. "El Estado de bienestar no está en crisis: lo que está en crisis es la lógica sobre la que fue creado, sobre un modelo de sociedad que ya no existe, con personas que empezaban a trabajar a los 20 años, cotizaban más de 40 y tenían una esperanza de vida de seis meses desde el momento en que empezaban a cobrar una pensión", ataca el ex ministro socialista José María Maravall. "Cincuenta años más tarde, la izquierda está sin ideas y se empeña en mantener el carácter totalmente universal del Estado de bienestar, defiende las rebajas de impuestos, y con ello se dejan como intocables cosas como pensiones no contributivas en el barrio de Salamanca, como grandes banqueros que se van al paro y cobran prestación, como pensionistas multimillonarios que no pagan por las recetas, por poner sólo algunos ejemplos hilarantes. Es el momento de revisar aspectos antidistributivos del Estado de bienestar. Pero no parece que haya coraje para eso". Moisés Naím, director de Foreign Policy, tercia en la polémica entre más Estado o más mercado, decantada a favor del segundo en los últimos tiempos. "El reto no es Estado o mercado, es combinar ambos: ya se ha visto que no funcionan por separado. No hay recetas simples: el Estado no puede jugar el mismo rol en la sanidad que en las telecomunicaciones, en defensa que en la regulación del sistema financiero. El desafío del Estado de bienestar europeo es responder a los retos que supone la evolución de la demografía, de una economía política de derechos adquiridos que tal vez no se pueden mantener y a la distribución de poder entre generaciones, entre regiones y entre sectores ante las amenazas que deja la crisis". Hay polémicas que surgen en cuanto se abre ese debate sobre Estado y mercado: el exceso de televisiones en algunas comunidades autónomas; los informes absurdos y costosísimos que encargan las administraciones; los sueldos de los centenares de asesores que pululan alrededor de los Gobiernos central, autónomo y local; ese funcionario a quien todo el mundo conoce que se pasa el día mano sobre mano; la ineficiencia rampante de una parte del sector público, esas cosas. Cientos de conductores de autobús recibieron la baja médica en la última huelga de transportes de una de las grandes capitales españolas. Ejemplos como ese afectan a la calidad del sector público, "pero sobre todo a la moral de la tropa", se queja Josep Oliver, catedrático de la Autónoma de Barcelona. "La crisis nos deja por delante un trabajo titánico: mejorar factores como la competitividad o el absentismo en el funcionariado para redescubrir la función pública. Hay que ganar eficiencia y evitar el fraude, eso es evidente, nadie puede oponerse a eso, y sin embargo ningún partido ha conseguido avances en décadas: no debe ser tan fácil. Además, ese no es el problema: el grueso del dinero no se escapa por la falta de competitividad del sector público, por el segundo canal de una televisión pública, ni siquiera por los centenares de miles de millones de asesores políticos. Eso es meter ruido en el debate para no llegar a ningún sitio. El grueso del dinero se va y se irá en educación, sanidad y pensiones, y eso no va a bajar, no puede bajar, no debe bajar", señala Oliver. "Eso sí, no se puede gastar por sistema más de lo que se ingresa, y hay que gastar mejor para que no parezca que el dinero se desvanece, que desaparece", cierra. La frase de Dickens, felicidad o miseria, es de David Copperfield, personaje de novela convertido hoy en un mago venido a menos. El Estado de bienestar español se enfrenta también a una mutación. Veremos en qué acaba. http://www.elpais.com/articulo/sociedad/Estado/bienestar/va/rumbo/UVI/elpepusoc/2010041 1elpepisoc_1/Tes

30 RAFAEL DOMÉNECH Primer plano ¿Recuperación sin empleo? RAFAEL DOMÉNECH 11/04/2010 De la misma manera que la recesión económica ha tenido efectos sobre el empleo muy diferenciados entre países, la recuperación se verá acompañada por un proceso de creación de empleo, sobre el que existen muchas incertidumbres y que difícilmente seguirá un patrón común internacionalmente. Mientras que la caída del PIB en EE UU (-2,4%) en 2009 se vio acompañada de una caída más intensa del empleo (-3,8%) y de un aumento de 3 puntos en la tasa de paro, en la zona euro ocurrió justo lo contrario: a pesar de que la caída del PIB fue del -4%, el empleo disminuyó sólo un 2%. Este comportamiento diferenciado del mercado de trabajo no sólo se observa a ambos lados del Atlántico, sino que también dentro de la eurozona los efectos sobre el empleo han sido muy heterogéneos. En Alemania, con una caída del PIB del 4,9%, el empleo disminuyó sólo un 0,3% y la tasa de paro apenas aumentó cuatro décimas, en el otro extremo el PIB de España se contrajo un 3,6%, su empleo un 6,7 y la tasa de paro casi cinco puntos. La primera conclusión que puede extraerse de la evidencia anterior es que, si el proceso de destrucción de empleo ha sido muy heterogéneo entre países, la recuperación también tendrá efectos diferentes sobre la creación de empleo. En algunos casos, como en Alemania, la recuperación sin empleo es el escenario natural tras una recesión que ha tenido un impacto muy reducido en términos de destrucción de empleo, gracias al programa de reducción de la jornada de trabajo o Kurzarbeit. Si en EE UU la recuperación sin empleo es una fuente importante de incertidumbre, en España sería un auténtico fracaso social porque implicaría que la tasa de desempleo permanecería elevada por mucho tiempo. ¿De qué depende que la recuperación genere empleo en EE UU y en España? En Estados Unidos, donde tras las crisis de 1991 y 2001 (dos recesiones con una destrucción moderada del empleo) se popularizó el término jobless recovery -ya utilizado en la Gran Depresión-, la incertidumbre se cierne sobre si la recuperación del empleo seguirá el patrón de las dos últimas décadas o si, por el contrario, será más parecida al de las recesiones de 1973- 1975 y 1981-1982, crisis con una destrucción de empleo muy intensa. A favor de una recuperación rápida del empleo en los próximos trimestres está el que desde los años cincuenta la evidencia empírica muestra que la creación de empleo en la recuperación ha sido proporcional a la intensidad de su destrucción durante la crisis. En contra, que en esta crisis se conjugan un cambio sectorial (las combinaciones de crisis inmobiliarias y financieras siempre han generado recesiones más intensas); cambios en los procesos de producción (mayor importancia de los procesos just-in-time), y un porcentaje elevado de trabajadores a tiempo parcial de forma involuntaria o que han sido despedidos de sus empresas. En este último escenario, la recuperación implica que muchos trabajadores tendrán que cambiar de sector y de empresas, lo que lleva tiempo, que muchas empresas retrasarán el aumento de su demanda de trabajo y que, cuando lo hagan, primero aumentarán la jornada de trabajo de los trabajadores que ahora están a tiempo parcial. En España, la intensa destrucción de empleo se explica en parte por el ajuste del sector inmobiliario y por lo que en un reciente trabajo del Servicio de Estudios de BBVA denominamos la flexirrigidez de un mercado de trabajo dual y poco eficiente: la convivencia simultánea de ámbitos muy rígidos (negociación colectiva, jornada de trabajo o contratos indefinidos con indemnizaciones de despido elevadas) y otros excesivamente flexibles

31 (contratos temporales con costes de despido muy reducidos o nulos), que ha propiciado también un ajuste muy intenso del empleo temporal en la industria y los servicios. Así, la recuperación del empleo vendrá condicionada por dos factores. El primero es el ajuste sectorial en una economía en la que el sector inmobiliario tendrá un peso menor. Si el patrón de crecimiento fuera el observado a partir de 1996 o 2000 en la actividad una vez excluida la construcción, el empleo podría empezar a crecer con tasas de crecimiento interanual del PIB por encima del 0,6%, según la Encuesta de Población Activa. Sin embargo, el reto es crecer muy por encima de esta tasa para que la recuperación del empleo sea verdaderamente intensa y rápida. Por ello resulta particularmente relevante el segundo factor: la reforma del mercado de trabajo. Con una tasa de paro del 18,8%, la economía necesita incentivar la demanda de trabajo por parte de las empresas y eliminar las ineficiencias existentes, reduciendo la dualidad y adecuando los salarios a las condiciones de las empresas. Ante la magnitud del desafío, el cambio en el futuro patrón de crecimiento no hace la reforma laboral menos importante, sino todo lo contrario: una reforma ambiciosa acortaría de forma significativa el tiempo requerido para recuperar el empleo perdido y haría posible una recuperación más intensa con mayor crecimiento del empleo. - http://www.elpais.com/articulo/primer/plano/Recuperacion/empleo/elpepueconeg/20100411el pneglse_3/Tes

32 TRIBUNA: Laboratorio de ideas J. BRADFORD DELONG La reconfortante perspectiva del largo plazo J. BRADFORD DELONG 11/04/2010 En Estados Unidos nos encontramos en medio de un desempleo del 10%. En algunos países, la política fiscal se ve limitada por temores legítimos de que un mayor gasto deficitario genere crisis de deuda externa. En muchos otros países, la política fiscal se ve afectada por la confusión entre déficits cíclicos de corto plazo y estructurales de largo plazo. Mientras tanto, la política bancaria resulta afectada por la reacción populista contra más rescates financieros, y la política monetaria por una extraña actitud mental de los funcionarios de los bancos centrales que temen a la inflación, a pesar de que el crecimiento no para de caer. Como dijera R. G. Hawtrey a propósito de los predecesores, de esta gente en la Gran Depresión: "Gritan ¡Fuego! ¡Fuego! En medio del Diluvio Universal". Es momento de tranquilizarse. Y la mejor manera de hacerlo es mirar la perspectiva de largo plazo. Si todo va bien en China e India -y si nada va catastróficamente mal en el núcleo noratlántico de la economía global, rico y postindustrial- la próxima generación alcanzará un verdadero hito. Por primera vez más de la mitad del planeta tendrá suficiente comida para no pasar hambre, techos suficientes para protegerse de las inclemencias climáticas, ropas suficientes para no pasar frío, y suficiente atención médica para dejar de preocuparse de que ellos y la mayoría de sus hijos mueran prematuramente a causa de microparásitos. La mayor parte de la humanidad estará ocupada en encontrar suficientes retos y diversiones conceptuales en sus vidas laborales y de ocio como para evitar el aburrimiento, y suficiente estatus relativo como para no vivir envidiosa de sus vecinos. Y, por supuesto, tendrá que librarse de los matones que antes usaban espadas y hoy disponen de misiles crucero y bombas de hidrógeno, es decir, los macroparásitos que han infectado a la humanidad desde que los agricultores se dieron cuenta de que tener cultivos eliminaba la opción de escapar al monte. ¿Cómo llegó a ocurrir este milagro? Algunos dicen que fue el desencanto del mundo: el paso de una visión que confiaba en la oración y los espíritus propicios a una basada en la manipulación racional de la naturaleza y la sociedad. Los griegos clásicos contaban con la filosofía natural y los romanos clásicos creían en determinar lo que funcionaba y aplicarlo. No obstante, todo lo que produjeron fueron algunas espléndidas obras de arquitectura e infraestructura, y un sistema de entrenamiento militar que llevó su sociedad más allá del Mediterráneo. Algunos dicen que el milagro surgió de una revolución agrícola que liberó a una gran parte de la mano de obra para crear y construir objetos, en lugar de cultivar alimentos. Sin embargo, la China del siglo once vivió una revolución agrícola mayor y más temprana que la Inglaterra del siglo XVIII, y China tendría que esperar otro milenio antes de emerger como potencia mundial. Algunos dicen que lo que merece el crédito es la conquista europea de América. Pero lo que se enviaba a Europa a través del Atlántico -y lo que se pagaba por las importaciones asiáticas con productos americanos- nunca fue verdadera riqueza. No era más que oro y plata estériles, algunas calorías vacías -en forma de azúcar- y algunos productos psicoactivos: café, té, chocolate y tabaco.

33 Algunos plantean que lo que nos llevó a la victoria sobre la escasez fue la revolución comercial y el ascenso de la clase media. Pero Adam Smith en 1776, y David Ricardo tiempo después, tenían una visión de una Inglaterra futura muy parecida a China: un país con alta productividad agrícola y una división bien desarrollada de la mano de obra, pero con un campesinado y una clase trabajadora muy pobres, gobernados por terratenientes muy ricos. O quizás fue la revolución industrial británica del siglo dieciocho -la máquina de vapor, la fragua y el molino de algodón- lo que dio impulso al tren del progreso. Pero, ya en 1871, John Stuart Mill escribía que era dudoso que cualquiera de los inventos de la revolución industrial hubiese aliviado las penurias cotidianas de un solo trabajador. Si miramos hacia atrás, es difícil evitar la conclusión de que a fines del siglo XIX ocurrió algo realmente especial. Y ese suceso especial estuvo compuesto por tres partes. En primer lugar, la llegada de las comunicaciones globales significó que las ideas inventadas, descubiertas o aplicadas en una parte del mundo se podían comunicar y adaptar rápidamente en otras partes del mundo, en lugar de esperar décadas o siglos a que atravesaran los océanos. Segundo, el desarrollo del transporte global significó que cualquier buena idea se podía poner en práctica para producir enormes utilidades a medida que se aprovechaba en todo el planeta. En tercer lugar, y en gran medida como consecuencia de los dos factores anteriores, el ascenso del inventor profesional y el laboratorio de investigación industrial crearon una clase de gente cuyo negocio no era crear y aplicar un invento específico, sino inventar el proceso mismo de invención e innovación constantes. Puesto que estos tres avances ocurrieron más o menos al mismo tiempo, se creó una masa crítica y la reación en cadena que nos llevó hasta acá. Esperemos que la podamos mantener en movimiento, y que no desperdiciemos ni perdamos de vista los elementos realmente importantes que le dieron origen. http://www.elpais.com/articulo/primer/plano/reconfortante/perspectiva/largo/plazo/elpepueco neg/20100411elpneglse_4/Tes

34 TRIBUNA: Laboratorio de ideas ANTÓN COSTAS La extraña pareja Hay algo intrigante en las parejas de reformista y político reformador. La relación suele durar poco ANTÓN COSTAS 11/04/2010 Cuando hayamos salido de la recesión, habremos salido también de la crisis? No es seguro, porque una cosa no implica la otra. La recesión es un concepto técnico. Se sale de ella cuando hay dos trimestres consecutivos con crecimiento positivo. Probablemente, lo veremos en el tercer trimestre. Pero eso no implicará entrar en una fase de crecimiento. En medio puede haber una larga etapa de convalecencia. Es como cuando el médico te da el alta, pero te dice que tienes que hacer recuperación para volver a rendir al máximo. En la salida de la crisis interviene la disposición de ánimo y la actitud para el cambio y la mejora. Pero en este terreno veo mejores fundamentos de lo que parece. La sociedad española comprende bastante bien los esfuerzos que hay que hacer para transformar la crisis en una oportunidad. Se ve reflejado en el interés con que se habla de competitividad y productividad en muchos ámbitos sociales y en las empresas. Si tengo razón, ¿por qué los políticos -los del Gobierno y los de la oposición- no lideran y capitalizan a esa disposición social? En un artículo en este diario, Víctor Pérez Díaz (4 de febrero de 2010) ha hablado de "la desconexión" entre los políticos y la ciudadanía. Pero señala que la responsabilidad es de ambos. Y apunta especialmente a la "opinión experta, bien intencionada y capaz (...), pero a la que aún le falta aliento y acierto para la tarea pedagógica que tiene por delante". ¿Cuáles son las condiciones que parecen favorecer las grandes reformas? La literatura especializada es amplia, pero permítanme la indelicadeza de citarme a mí mismo. Hace ya varios años publique varios trabajos académicos y un libro sobre procesos de reforma económica en España. En esos trabajos identifiqué cuatro factores. El primero es el surgimiento de un "estado de necesidad" provocado por la aparición de una fuerte crisis económica. Así ocurrió en 1864-1868, en 1957-1959, en 1974-1977, en 1982- 1983 y en 1992-1993. Al contrario de lo que dice el sentido común, que sería cambiar cuando las cosas van bien, la experiencia dice que lo hacemos cuando van mal. Quién sabe, quizá nos acojamos a la máxima de "no lo arregles si no está estropeado". El segundo es la existencia de una percepción generalizada de "agotamiento" del "viejo" modelo de crecimiento y de política. Las crisis contribuyen más que cualquier otra cosa a poner de manifiesto el agotamiento del viejo modelo. Cuando esa percepción se generaliza, como ocurrió en los periodos mencionados, son más fáciles las reformas. Pero, siendo necesarios, estos dos factores no son suficientes para hacer posible las reformas. No cambiamos por el solo hecho de ver que lo viejo no funciona. Necesitamos tener la certeza de que hay una solución nueva mejor. De ahí que el tercer factor sea la existencia de un diagnóstico solvente sobre los problemas, una doctrina persuasiva sobre las ventajas del cambio y una estrategia adecuada para el tránsito de lo viejo a lo nuevo. Esta estrategia ha de incluir el reparto del coste de la crisis y de los beneficios del cambio. Porque no sólo de eficiencia se alimentan el apoyo social a las reformas, sino también de la percepción sobre el reparto equitativo de los beneficios entre ganadores y perdedores. Sin equidad las reformas no

35 avanzan. Y si avanzan, quedan expuestas a retrocesos cuando los perdedores tienen ocasión de devolver el golpe. El cuarto factor es la existencia en el país de expertos-reformistas que encarnen esa nueva doctrina reformadora, y que, a la vez, tengan reputabilidad técnica socialmente reconocida a través de una larga labor de pedagogía ciudadana y ofrezcan a los políticos el expertise y la credibilidad necesaria para gestionar las reformas. El análisis de las grandes reformas que se han llevado a cabo en España en los dos últimos siglos muestra que detrás de cada una de ellas estuvo el impulso de una extraña pareja. La formada por el experto-reformista y el político-reformador. Fue el caso del economista Laureano Figuerola y del general liberal y presidente del Gobierno Juan Prin en la reforma económica de "La gloriosa", la revolución de 1868, que introdujo la peseta como moneda única y otras grandes reformas. También lo es la del profesor Enrique Fuentes Quintana y Adolfo Suárez en los llamados Pactos de la Moncloa de 1977. O la de Miguel Boyer y Felipe González en el año 1982. Cada parte de esa extraña pareja cumple su papel en la promoción y el éxito de las reformas. El reformista da credibilidad y solvencia técnica a las propuestas de reforma. El político, liderazgo, compromiso y apoyo político al reformista. Pero es una confianza al 99%, como dijo alguna vez Felipe González. El 1% restante se la queda el político para cesar al reformista. En los tres casos mencionados, el político acabó haciendo uso de ese margen que se reserva. En este sentido hay algo intrigante en esta pareja de reformista y político reformador. Son parejas cuya relación acostumbra a durar poco. Mirando la experiencia española, no más de dos años, en el mejor de los casos. Por otro lado, las grandes reformas que merecen ese nombre se han producido siempre en los primeros años de un Gobierno salido de unas elecciones. Viniendo al presente, no veo hoy por ningún lado esa pareja reformadora. Pero no sólo por pereza o incapacidad de nuestros políticos, sino porque, hasta ahora, ha faltado labor previa de pedagogía por parte de los reformistas. Es decir, esa "opinión experta", bien intencionada, pero a la que aún le falta aliento y acierto para la tarea pedagógica de la que habla Víctor Pérez Díaz. Pero, en cualquier caso, si el pasado puede servir para hacer alguna predicción de futuro, lo dicho me lleva a afirmar que no es muy probable que veamos grandes reformas hasta después de unas nuevas elecciones generales. http://www.elpais.com/articulo/primer/plano/extrana/pareja/elpepueconeg/20100411elpneglse _5/Tes

36 REPORTAJE: Laboratorio de ideas - BREAKINGVIEWS. Reuters

Carta a Papandreu PIERRE BRIANÇON 11/04/2010 A Yorgos Papandreu, Mansión Maximou, Atenas, Grecia. Primer ministro: Como ya sabe, los mercados financieros no están convencidos de que su Gobierno pueda hacer frente a la crisis de deuda en la que se ha visto sumida Grecia. El rendimiento de los bonos griegos ha aumentado hasta superar el 7,5% esta semana, con los diferenciales respecto a los bonos alemanes en su nivel más alto desde la entrada del euro. Debe recaudar unos 11.000 millones para finales de mayo. El enorme diferencial significa que la falta de confianza en Grecia añade 400 millones anuales a la cuenta de intereses a pagar del país. Me gustaría sugerirle respetuosamente el siguiente plan de cuatro puntos: 1. Afronte la realidad. Sus socios de la eurozona no van a ayudarle el mes que viene. Puede que hayan prometido ayuda financiera hace dos semanas, pero no hay la más mínima posibilidad de que se pongan de acuerdo sobre los periodos y las condiciones antes de las elecciones regionales alemanas del 9 de mayo, cruciales para el político futuro de Angela Merkel. La canciller alemana cree que, para empezar, ustedes no deberían recibir ayuda alguna: sus votantes no quieren pagar los gastos de sus pensionistas. Pero ahora Merkel insiste en que la ayuda prometida por la UE sólo se debería ofrecer a tipos de interés del mercado. A ese precio, ¿por qué iba a aceptarla? 2. Deje de hablar. En los últimos meses ha insistido en que Grecia no necesita un rescate, a la vez que ha buscado la "solidaridad" de sus socios de la UE y amenazado con ir al FMI si no recibe un paquete de ayuda europeo. También ha dado a entender que Grecia debería obtener los préstamos a tipos "normales". Pero casi cada vez que abre la boca (ya sea para restar o añadir importancia a la situación), el mercado se asusta más. Así que estése callado. Concéntrese en reformar la economía y dar la vuelta a la situación del país. Los 11.000 millones que pretende conseguir no van a salir baratos. Mala suerte. No hay nada que pueda hacer. La credibilidad que ha perdido sólo se recuperará mediante una acción conjunta durante muchos meses. 3. Siga trabajando. La Comisión Europea, el BCE y sus socios de la UE creen que su plan de reducción del déficit es creíble. El FMI ha accedido a ayudar, y sus expertos ya están en Atenas para trabajar con usted. Escúcheles. Escuche también con mucha atención a Jean- Claude Trichet. El presidente del BCE ha resultado ser su aliado más fuerte, duro pero justo, durante toda la crisis, y aún tiene cierta influencia en Merkel. No está trabajando solo. 4. Diseñe planes de contingencia. Es posible que la eurozona demuestre que es incapaz de acordar un plan de ayuda financiera si la terquedad alemana persiste después de que cierren las urnas el mes que viene. Tiene que preparar un plan B y C, pero sin siquiera insinuar que está haciéndolo. Si los mercados siguen insistiendo en aplicarles unos tipos punitivos, está la opción de una operación del FMI en toda regla. Podría obtener un préstamo del Fondo a menos del 3%, y seguramente no le supondría mucho más perjuicio económico que el que ya ha acordado infligir. Por último, la suspensión de pagos no debería ser un tabú. La carga entonces pasaría de golpe a los bancos europeos a los que usted debe, sobre todo a las entidades de crédito alemanas y francesas. Merkel ha presupuestado unos impresionantes 400.000 millones de euros en posibles avales de préstamos y paquetes de rescate para los

37 bancos alemanes. Qué ironía tan exquisita sería que sus intransigentes tácticas la obligaran a firmar un cheque enorme para limpiar los destrozos que usted ha causado. Atentamente, un banquero amigo. http://www.elpais.com/articulo/primer/plano/Carta/Papandreu/elpepueconeg/20100411e lpneglse_6/Tes

Laboratorio de ideas - BREAKINGVIEWS. Reuters GRECIA / RESCATE El riesgo de contagio IAN CAMPBELL 11/04/2010 El apoyo verbal a Grecia no está resultando suficiente. Si no hay dinero, no sirve de nada. El diferencial de la deuda griega a medio plazo sobre la alemana ha subido hasta los 4,5 puntos porcentuales. Demasiado alto para ser viable para un país muy endeudado. Un rescate a Grecia en forma de préstamos de emergencia tiene que salir adelante, y rápido. La cuestión será si esto traería tranquilidad o llevaría a los mercados a la caza de otros países de la zona euro con déficits excesivos, e incluso al Reino Unido. El desencadenante exacto de la intervención no está claro, pero lo más probable es que el FMI, al que Alemania quería involucrar en cualquier propuesta de rescate de Grecia, coordinará un rescate. El acuerdo probablemente incluiría préstamos bilaterales de Francia, Alemania y otros países de la UE, apuntalados por préstamos del FMI, que se otorgarían sólo si Grecia cumple los objetivos fiscales. Los presidentes de la UE ya habían afirmado que no habría subvenciones a los préstamos otorgados a Grecia. Pero esto es incompatible con el complicado negocio de salvar al país. Jean-Claude Trichet, presidente del BCE, ha dado a entender que el tipo de interés no sería muy superior al coste de financiación para los Gobiernos donantes. El BCE también se ha saltado sus normas sobre garantías para permitir a los bancos griegos que sigan teniendo financiación barata. Con préstamos de emergencia a tipos moderados, Grecia sobrevivirá a la temporada primaveral de financiación. Pero el problema no se acaba ahí. El déficit fiscal de Grecia tendrá que recortarse y habrá que reanudar el crecimiento económico. La UE podría pasarse años inyectando dinero a Grecia. La cuestión más inmediata es qué pasa con España, Irlanda, Portugal e Italia, cuya trayectoria fiscal parece insostenible. Ellos también se enfrentan al problema de intentar restablecer el crecimiento con la carga de una divisa fuerte. El peligro para la UE es que salvar a Grecia supone que los mercados salgan a la caza de otros países. Portugal e Irlanda, por ejemplo, aún logran financiación a tipos moderados. Esto podría cambiar en los próximos meses. Si los mercados pueden marginar a un miembro de la eurozona, también pueden hacérselo a otros. Los líderes de la UE tendrán que esperar que los mercados no se empeñen en averiguar a cuáles. - http://www.elpais.com/articulo/primer/plano/riesgo/contagio/elpepueconeg/20100411elpnegls e_8/Tes

38 TRIBUNA: Laboratorio de ideas VICTORIO VALLE

¿Por quién doblan las campanas? VICTORIO VALLE 11/04/2010 La muerte de cualquier hombre me disminuye porque estoy ligado a la humanidad, por consiguiente nunca preguntes por quién doblan las campanas, doblan por ti". (John Donne, 1624). Desde hace un tiempo, las cajas de ahorros están en boca de todos. Primero fue la tan traída y llevada politización y ahora es el tema de su reestructuración, ante el impacto de la crisis que vivimos que ha dejado una profunda huella en estas instituciones que siempre fueron líderes en el crédito hipotecario, el más batido por el "pinchazo" de la tristemente celebre burbuja inmobiliaria. Como suele ocurrir en estas ocasiones no todo es culpa de la crisis; hay que reconocer también en algunos casos fallos importantes de gestión pero, como el tiempo se encargará de demostrar más pronto que tarde, la situación difícil por la que atraviesan algunas cajas de ahorros -unas más que otras- no es muy distinta, como no podía ser de otra manera, de la que parecen ya mostrar otras instituciones bancarias con morosidad creciente y con tasas de concesión de nuevos créditos en declive. En este sentido, la singularidad es sólo relativa. Sin embargo, esas dificultades circunstanciales y la búsqueda de soluciones no deben llevar a ignorar el factor diferencial que suponen la naturaleza y objetivo de estas instituciones. Hace ahora 200 años el reverendo Henry Duncan creó en la parroquia de Ruthwell (Escocia) la primera caja de ahorros, un modelo que, con peculiaridades, se adoptaría en España en 1838 con la creación de la Caja de Ahorros de Madrid. Las cajas de ahorros nacieron en todas partes con misiones de destacada solidaridad: evitar la usura, reducir la exclusión financiera del ahorro popular modesto, propiciar el desarrollo de su zona e integrar a las clases más humildes, estimulando y protegiendo su ahorro en el sistema capitalista de mercado, contribuyendo a la estabilidad y a la paz social, complementando así con criterios sociales el poderoso mecanismo de eficiencia de la banca privada. Por eso las cajas no son simplemente bancos sin accionistas, esa es una visión reduccionista de su naturaleza. Son instituciones financieras con una pluralidad de misiones sociales, que no se limitan a la obra social sino que entrañan aspectos relativos a la reducción de la exclusión, a la promoción de los territorios en que operan y la potenciación de la competencia, evitando abusos derivados del poder de mercado, entre otros. El transcurso del tiempo no parece haber cambiado el fondo de esta situación. Los expertos recuerdan la conveniencia de la biodiversidad en el sector financiero. La sociedad también ha manifestado con reiteración su apuesta por la diversidad institucional que las cajas de ahorros suponen. Una reciente encuesta elaborada por IMOP para FUNCAS nos revela que el 81% de la población española quiere la convivencia de bancos y cajas de ahorros y que más de la mitad de los encuestados se siente satisfecha con la actual naturaleza fundacional de las cajas de ahorros españolas. La experiencia internacional y particularmente la británica y la italiana, países en que las cajas adquirieron un gran desarrollo y en los que, en la actualidad, han desaparecido, es muy contundente respecto a la pérdida de bienestar social que la desaparición de las cajas ha supuesto. La exclusión financiera se ha intensificado y las condiciones de los mercados se han endurecido. La positiva valoración que la actividad de las cajas de ahorros me merece no está en contradicción con la necesidad, que desde luego admito, de que sean precisos cambios para reducir la sobrecapacidad del sistema, consolidar su solvencia y racionalizar la estructura de sus órganos de gobierno.

39 Hoy se plantea la necesidad de encontrar vías para dotar a las cajas de ahorros de mayores recursos propios, ante la situación difícil que atraviesa el sector bancario en general y, sobre todo, ante el futuro, para permitir su crecimiento teniendo en cuenta la ampliación de exigencias de recursos propios tanto en cantidad como en calidad, que va a derivarse de lo que ha dado en llamarse Basilea III. Responder a las exigencias de recursos propios en el futuro puede colocar a las cajas ante una disyuntiva poco halagüeña. Por una parte, mantenerse en el esquema de capitalización tradicional puede ser insuficiente para algunas cajas, lo que obligará a reducir no sólo el crecimiento sino la propia dimensión actual del sector. Es cierto que en la hoja de ruta de las cajas de ahorros no está escrito que deban tener la mitad del sistema bancario pero, si esa proporción cayera con exceso, sería duro de asumir tras la brillante trayectoria de los últimos treinta años. Por otra, los nuevos caminos planteados en este momento para avanzar en la capitalización, creo que amenazan gravemente la identidad de las cajas de ahorros en el futuro. En todo caso el proceso de reestructuración de las cajas habría que abordarlo con extremada cautela. La generalización de la emisión de cuotas participativas con derechos políticos mas allá de su uso como elemento de control por parte de la autoridad en situaciones extremas de intervención constituye, en mi opinión, la antesala a la conversión de las cajas en sociedades. Es fácil predecir que la secuencia será, en un periodo más o menos corto, pasar de cajas a cajas con cuotas participativas dotadas de derechos políticos, de ahí a bancos que dotan obras sociales con sus beneficios residuales, cada vez menores y de ahí a bancos por acciones. Sería una ruta parecida a la seguida en el caso de Italia, país europeo con las mayores cajas de ahorros que finalmente han quedado sepultadas en el nuevo diseño del sistema bancario que derivó de la denominada Ley Amato de 1990. Inicialmente todo puede tener límites, pero también todos sabemos que nada impide ampliarlos en el futuro. Por otra parte, el camino de las fusiones que, ab initio, es una vía correcta, podría terminar en algunos casos -ya hay intentos claros de ello- en una suerte de banca-caja regional de naturaleza semipública sometida al estricto uso y control por parte de la correspondiente comunidad autónoma. El SIP (Sistema Institucional de Protección) en su actual versión aún tiene más clara la conversión en bancos, ya que la entidad aglutinante tiene que serlo por obligación regulatoria. Otra cosa sería que la entidad que encabece la agrupación del SIP tenga naturaleza de caja de ahorros, ya que ello permitiría, sin vulneración de la naturaleza de las cajas, que formen parte del mismo, potenciarse conservando su individualidad formal y tal vez -esto lo tengo menos claro- reducir algo la presión autonómica sobre las cajas. Cualquiera de estos caminos implica serias amenazas para la supervivencia de las cajas tal como hoy las conocemos. Es en este sentido en el que cabe entender lo que algunos destacan: las cajas españolas pueden ser víctima de su propio éxito. Tal vez sea preferible crecer menos y mantener las características institucionales básicas. El mensaje central que me gustaría transmitir es que esa muerte hoy por hoy anunciada no será sólo a las propias cajas de ahorros a las que afecte. En última instancia las cajas son un instrumento institucional al servicio de la sociedad; lo grave es la pérdida de bienestar social que su desaparición causará. Por tanto, no es una cuestión de técnica financiera difícilmente comprensible; es un tema que afecta directamente a los beneficiarios de la actividad de las cajas que tienden a coincidir con la población total. Todos perderemos algo si esa desaparición se materializa. Será por la sociedad, y no sólo por las cajas, por quien doblen las campanas.http://www.elpais.com/articulo/primer/plano/quien/doblan/campanas/elpepueconeg/20100411elpne glse_9/Tes

40 REPORTAJE: Empresas & sectores Información privilegiada Un retraso de doble imposición España y Estados Unidos, abocados a modernizar un convenio 'desactualizado' MIGUEL Á. NOCEDA 11/04/2010 Entre tanto lío de previsiones, crisis financieras, reestructuración de cajas, presidencia europea, corrupciones y demás asuntos de calado, pasan desapercibidas otras cosas que, a bote pronto, parecen menores en el mundo de la economía. Pero no lo son. Es el caso, por ejemplo, de las negociaciones para revisar el convenio para evitar la doble imposición entre Estados Unidos y España, y la prevención de la evasión fiscal. Una cuestión que se arrastra desde 2006 y a la que se refirió José Luis Rodríguez Zapatero cuando acudió a Washington invitado por Barack Obama al Desayuno de la Oración. El presidente aseguró a algunos de los presentes que antes del verano (de 2010, claro) se revisaría el acuerdo. Desde entonces hasta ahora se han mantenido las intenciones y algunos contactos; pero pocos progresos, que se sepan, a pesar de que los dos países están de acuerdo en modernizar el convenio, que data de febrero de 1990. Es una de las tareas que tiene sobre la mesa el secretario de Estado de Hacienda, Carlos Ocaña, desde los tiempos de Pedro Solbes como ministro de Economía. Entre los convidados elegidos para estar con Zapatero estaba el presidente de la Cámara de Comercio de Estados Unidos en España, Jaime Malet, quien reiteradamente ha subrayado que está "desactualizado" y que tenía bastante que ver con lo que había dicho el presidente al respecto. Malet pudo explicar a Zapatero que el convenio actual ha provocado que la presencia de empresas de Estados Unidos en España sea muy inferior a la de países del entorno. Para el organismo, conlleva "efectos perjudiciales" para la economía española, ya que "desincentiva la inversión". Según un documento (white paper) elaborado en 2006 por la cámara que preside Malet, sus socios (es decir, las empresas estadounidenses radicadas en España) se quejan de "los efectos perniciosos" de dicho convenio y sugerían modificaciones en tres aspectos: el tratamiento de las ganancias de capital, los cánones y los dividendos. Los cambios en las relaciones bilaterales desde la llegada de los demócratas al poder en Estados Unidos han provocado que el organismo intensifique sus demandas. En octubre -es decir, unos meses antes de la visita de Zapatero a Obama- realizó una actualización del citado documento, esta vez con la participación de expertos en la materia de entidades de prestigio presentes en los dos países (Baker & McKenzie, Deloitte, Ernst & Young, KPMG, Garrigues, PriceWaterhouse y Uría y Menéndez), en la que se recogen todas las peticiones. Los convenios de doble imposición distribuyen entre el Estado de residencia del perceptor de las rentas y el Estado donde éstas se obtienen el derecho a gravar las distintas categorías de rentas. No obstante, los países lo adaptan a sus intereses. Según la Cámara de Comercio americana, el modelo español establece una "desviación significativa" respecto a la OCDE que provoca que la ganancia de capital originada en la transmisión de acciones de una compañía española por parte de una estadounidense que la participe en más del 25% durante el año precedente, tribute en España con independencia de que ya lo haga en Estados Unidos. La Cámara de Comercio americana añade que los rendimientos de capital mobiliario también están sometidos a tipos más elevados en España que en otros países que han actualizado sus convenios. Eso sitúa al país "en situación de desventaja comparativa" a la hora de atraer

41 inversiones. Así, mientras los beneficios distribuidos por las filiales residentes en España a sus holdings residentes en otros Estados de la UE están libres de tributación, los de las compañías norteamericanas se gravan con un tipo del 15% si la participación del holding es inferior al 25% y del 10% si iguala o supera ese porcentaje. Los obstáculos llevan, en su opinión, a que "aproximadamente la mitad de los activos empresariales estadounidenses que hay en España (más de 42.500 millones de euros) se hayan triangulado, es decir, a través de terceros países como Holanda, Luxemburgo o Bélgica, "por razones fiscales". La facturación agregada de las empresas estadounidenses establecidas en España como de las empresas españolas con presencia en Estados Unidos se aproxima al 24% del PIB español (1,1 billones de euros), lo que pone de relieve la importancia de este asunto. - http://www.elpais.com/articulo/empresas/sectores/retraso/doble/imposicion/elpepueconeg/201 00411elpnegemp_2/Tes

42 REPORTAJE: Economía global Turquía emerge con fuerza de la crisis La economía crece de nuevo de forma sostenida tras haber tocado fondo en 2009 JUAN CARLOS SANZ 11/04/2010

43 Mientras la economía de Grecia se hunde y el crecimiento se estanca en la mayoría de los países europeos, Turquía resurge con fuerza de la crisis global. Después de haber tocado fondo en el primer trimestre de 2009 -con una contracción del PIB del 14,5%, la más profunda desde que se registran los datos en el país-, la economía turca ha emergido en el último cuarto de 2009 con un inesperado aumento del 6% tras cinco trimestres consecutivos de recesión. Se trata del mayor crecimiento experimentado dentro del G-20, detrás de China (10,7%) y emparejado con los de India y Corea del Sur. El PIB turco cayó en el conjunto del año pasado un 4,7%, frente al 6,5% pronosticado por el FMI. Los analistas coinciden ahora en anticipar un crecimiento del 5% en 2010, por encima del 3,5% que figura en las previsiones del Gobierno de Ankara. "La recuperación de la economía turca es clara", constata Isaac Martín Barbero, consejero jefe de la Oficina Económica y Comercial de la Embajada de España en Ankara. "Turquía había hecho sus deberes. Sufrió una gravísima crisis económica en 2001 y tuvo que reformar profundamente su sistema bancario. La crisis inmobiliaria tampoco le ha afectado, ya que la actividad hipotecaria turca es aún muy débil". La política de estímulo fiscal del Gobierno ha tenido éxito y ha contribuido, según Martín Barbero, al incremento de las exportaciones hacia Europa y los países árabes. "Y Turquía cuenta ante todo con un gran mercado interior de más de setenta millones de habitantes, y el potencial de una población joven en proceso de urbanización que genera más consumo que ahorro", destaca el consejero económico español. Pero la recuperación será lenta, advierte en su último informe sobre Turquía Christian Keller, analista de mercados emergentes de Barclays Capital. "El saneado sistema bancario e hipotecario turco puede contribuir a la recuperación de la economía en 2010", sostiene este experto, quien también alerta de "un potencial retorno de la alta inflación por los estímulos de la demanda doméstica". "La inflación seguirá creciendo a causa del dinamismo de la economía turca, en la que se está disparando el consumo mientras aumentan los impuestos indirectos", coincide en el diagnóstico Martín Barbero. "Las cifras de marzo se sitúan en un 9,56% interanual y en abril se espera un nuevo repunte. Va a ser complicado que la tasa de 2010 no supere el listón de los dos dígitos". Ibrahim Öztürk, profesor de Economía de la Universidad del Mármara, en Estambul, y columnista del diario Zaman, próximo al Gobierno de base islamista del primer ministro Recep Tayyip Erdogan, considera que "los principales problemas económicos de Turquía son el persistente déficit comercial y un patrón de crecimiento que puede estancarse en el medio plazo. Estos objetivos de crecimiento van a alcanzarse, pero no ocurrirá lo mismo con las previsiones de inflación. El gran problema es el desempleo". El paro empieza a ser visto como un problema estructural de Turquía, que ya cuenta con un 17% de jóvenes con titulación secundaria sin trabajo. Los datos oficiales turcos (13,5% de tasa de desempleo) deben ser examinados con cierto escepticismo, en opinión del responsable de la Oficina Económica de España en Ankara. "El peso de la economía sumergida es muy superior al que tiene en España, y muestra las limitaciones de Turquía para incrementar sus ingresos tributarios". El ministro de Economía turco, Alí Babacan, ha resumido así la línea de trabajo del Gobierno: "La prioridad es la estabilidad de los precios y, si no se contradice esta máxima, el desempleo y el crecimiento económico".

44 Turquía ha logrado contener su deuda pública por debajo del 50% del PIB y cuenta con las inversiones extranjeras para proseguir su expansión gracias a la importancia de su mercado interno y su papel clave como plataforma económica plurirregional. Tras varios años de caída de las inversiones extranjeras, que han pasado de 22.000 millones de dólares en 2007 a 8.000 millones de dólares en 2009 a causa de la coyuntura internacional, los analistas de mercados dan por seguro que en 2010 se invertirá la tendencia. Definitivamente, la economía turca ha despegado. "Las previsiones iniciales sobre exportaciones y producción industrial apuntan con firmeza a un crecimiento por encima de los dos dígitos en el primer trimestre de 2010", asegura el profesor Öztürk, "y el crecimiento anual se estima en un 5%". "No parece una predicción exagerada, después del alza registrada en el último trimestre de 2009", se suma Martín Barbero. El primer ministro Erdogan se jactaba el jueves durante una visita oficial a París de que el ISE-100, el índice de la Bolsa de Estambul, había batido a comienzos de esta semana su récord histórico gracias al clima de "estabilidad y confianza". Pero la situación política turca dista de estar tan sosegada. Tras varias redadas en las que han sido detenidos decenas de altos mandos de las Fuerzas Armadas acusados de participar en tramas golpistas, el Gobierno acaba de presentar una reforma constitucional que rechazan los partidos de la oposición laica, amparados por los jueces y los militares que encarnan el aparato laico del Estado. "El actual orden político bloquea las reformas necesarias para que Turquía pueda afrontar los desafíos económicos contemporáneos", argumenta el economista y columnista Öztürk. "Las empresas que nos consultan no parecen tener en cuenta ahora la situación política interna a la hora de tomar sus decisiones sobre Turquía, como ocurrió en 2008 durante el proceso de ilegalización del partido del Gobierno ante el Tribunal Constitucional", concluye Martín Barbero. Los intercambios comerciales entre España y Turquía se han multiplicado por ocho desde 1995, hasta alcanzar los 7.000 millones de euros el año pasado. - http://www.elpais.com/articulo/economia/global/Turquia/emerge/fuerza/crisis/elpepueconeg/2 0100411elpnegeco_1/Tes

45 TRIBUNA: Economía global KENNETH ROGOFF El FMI va a Europa Europa se ha convertido en la zona cero de la mayor expansión de créditos e influencia del FMI en años KENNETH ROGOFF 11/04/2010

El presidente del BCE, J.-C. Trichet, y el director del FMI, D. Strauss- Khan.- REUTERS

Con la participación central del Fondo Monetario Internacional (FMI) en el plan de rescate de la zona euro para Grecia, el organismo multilateral de crédito ha cerrado el círculo. En sus primeros días, después de la Segunda Guerra Mundial, la función principal del FMI fue ayudar a Europa a superar los estragos de la guerra. En otros tiempos el Fondo tenía decenas de programas en todo el continente (como lo demostramos, Rong Qian, Carmen Reinhart y yo en una nueva investigación sobre la "graduación" de las crisis de deuda soberana). No obstante, hasta antes de la crisis financiera, la mayoría de los europeos asumían que ya eran demasiado ricos para pasar la humillación de pedir asistencia financiera al Fondo. Bienvenidos a la nueva era. Europa se ha convertido en la zona cero de la mayor expansión de créditos e influencia que el FMI haya tenido en años. Varios de los grandes países de Europa Oriental, incluidos Hungría, Rumania y Ucrania, ya tienen programas sustanciales de crédito del FMI. Ahora, los países de la zona euro han acordado que el Fondo también puede participar en Grecia y, presumiblemente, en Portugal, España, Italia e Irlanda, de ser necesario. El resurgimiento del FMI en el último año es impresionante. Limitado por la retórica populista durante la crisis de deuda asiática de finales de los años noventa, el Fondo ha estado luchando para volver a anclar sus políticas y reconstruir su imagen. Cuando el francés Dominique Strauss-Kahn tomó las riendas en el otoño de 2007, incluso los países pobres de África le daban la espalda como a un leproso y preferían hacer tratos con prestamistas no tradicionales como China. En ausencia de nuevos negocios y nuevos ingresos, el Fondo encaraba fuertes recortes para asegurar su propia supervivencia. Cuánto puede cambiar las cosas una crisis. Ahora el FMI ha ascendido al Olimpo. En abril de 2009, los líderes del G-20 aprobaron cuadriplicar la capacidad de préstamo del Fondo. El incremento tal vez fue exagerado en la fiebre del momento, pero en realidad una buena parte del dinero al parecer ya se ha materializado. Y para Europa, la ayuda ha llegado muy a tiempo.

46 ¿La llegada del FMI a Europa señala acaso el principio del fin de los enormes problemas de deuda de la región? En absoluto. El Fondo no concede regalos, solamente ofrece créditos puente para dar tiempo a los países en quiebra de solucionar sus problemas de presupuesto. Aunque los países ocasionalmente pueden solucionar sus problemas de deuda, como hizo China con su crisis bancaria de los años noventa, los países en quiebra normalmente se enfrentan a una dolorosa aritmética presupuestal. Para evitar el impago y la inflación, la mayoría de los países se ven obligados a aceptar importantes alzas de impuestos y recortes del gasto, lo cual a menudo desencadena o agudiza una recesión. Para ser justos, la reputación del Fondo de imponer austeridad es en buena parte una ilusión. Usualmente, los países piden la intervención del FMI sólo cuando los mercados internacionales de capital los han rechazado y tienen que afrontar medidas restrictivas desesperadas por todos lados. Los países recurren a la ayuda del Fondo porque es típicamente una opción mucho más suave que los mercados privados. Pero la suavidad es relativa. Será muy difícil -no sólo para Grecia, sino para todos los demás países sobreendeudados de Europa- ajustar la política fiscal en medio de la recesión sin correr el riesgo de una espiral más acentuada. En pocas palabras, nadie quiere ser el próximo gran solicitante de ayuda del FMI. La llegada del FMI tampoco significa que los tenedores de bonos estén a salvo. Como lo documentamos, Qian, Reinhart y yo, ha habido numerosos casos en los que los países ingresan a los programas del FMI, pero terminan en situaciones de impago de todas formas. El ejemplo más sonado es el de Argentina en 2002, pero otros casos recientes incluyen Indonesia, Uruguay y la República Dominicana. El resultado final puede ser el mismo para muchos países europeos. Ucrania ya está en apuros. Pero para la mayoría, el proceso de impago soberano es como el teatro Kabuki en cámara lenta. ¿Por qué habría de elegir un país el impago mientras haya benefactores ricos dispuestos a prestar dinero para preservar la ilusión de la normalidad? Es fácil tranquilizar a los mercados de bonos. Lo que está en juego para el FMI en Europa es enorme. No va ser un acto de equilibrio fácil. Si el Fondo pone condiciones estrictas "estilo alemán" a sus préstamos, se arriesga a provocar una confrontación inmediata e impago. Eso es lo que menos quiere. Hasta ahora, ha sido muy flexible en Europa oriental en donde respalda programas que dependen de proyecciones optimistas de los recortes futuros al presupuesto y del crecimiento económico. El problema de ser "el chico bueno" durante largo tiempo es que, incluso con los grandes recursos nuevos, el FMI no puede esperar a sus clientes para siempre. Si lo hace, tal vez no tenga los fondos suficientes para la siguiente crisis, que inevitablemente llegará, tal vez de una zona inesperada como Japón o China. Además, si el Fondo pierde toda su credibilidad para catalizar reformas del presupuesto, sus magnánimos planes de rescate solamente servirán para exacerbar la crisis de deuda soberana global aún mayor que se está gestando no sólo en Europa sino en Estados Unidos, Japón y otros lados. El lento crecimiento, el envejecimiento de la población y los déficit disparados son una mezcla peligrosa. La cuestión para el FMI en Europa no es si tiene un plan viable para entrar. Tuvo un aterrizaje firme. La cuestión es si tiene una estrategia de salida viable. http://www.elpais.com/articulo/economia/global/FMI/va/Europa/elpepueconeg/20100411elpn egeco_2/Tes

47

Laboratorio de ideas - BREAKINGVIEWS. Reuters GRECIA / BCE Gracias, Jean-Claude NEIL UNMACK 11/04/2010 Los bancos de Grecia tienen al menos una cosa menos de la que preocuparse. El Banco Central Europeo ha excluido a los bonos del Estado de las nuevas reglas para suministrar fondos a cambio de garantías relativamente arriesgadas. La medida debería facilitar a las entidades de crédito griegas seguir obteniendo liquidez al asignar deuda gubernamental poco fiable al BCE. Pero la medida es más pragmática que lógica. El mes pasado, el BCE afirmó que sus entidades de liquidez para la crisis seguirían aceptando como garantía bonos con una calificación de menos de A. Pero con la pérdida de intensidad de la crisis financiera general, el banco propuso introducir nuevos límites a los anticipos que daría a cambio de estos bonos. El miedo es que estos cambios, que está previsto que se apliquen el próximo enero, perjudicarán a los bancos de Grecia, que están hasta arriba de deuda del Gobierno griego. Es cierto que las entidades de crédito aún podrían haber considerado la deuda griega como garantía incluso si el país perdiera su calificación crediticia de grado A. Pero el quid pro quo de la indulgencia del BCE respecto a la elegibilidad general podrían ser recortes aún más dolorosos para los bonos de inferior calificación. Estos temores han resultado ser infundados. Ahora que se ha excluido del nuevo sistema a la deuda del Gobierno, el recorte de cualquier deuda pública con una calificación de menos de A se determinará como hasta ahora: un recorte inicial de los términos específicos del bono, con el añadido de un 5% adicional para más seguridad. Por otro lado, a la deuda no gubernamental de calificación inferior se le aplicará un único y gran recorte, que determinará también en esta ocasión las condiciones del bono, pero sin el añadido de un 5%. El efecto neto de los cambios debería ser modesto. El BCE da a entender que los recortes bajo el nuevo régimen serán al menos tan altos como en el régimen actual, pero no mucho más. Jean-Claude Trichet, presidente del BCE, afirma que los cambios no se han hecho para favorecer a Grecia. Pero dada la creciente erosión de la confianza en Grecia, el BCE se ha arriesgado a empeorar la situación manteniendo la coherencia entre las garantías soberanas y no gubernamentales. En una crisis, el pragmatismo suele primar sobre la lógica. - http://www.elpais.com/articulo/primer/plano/Gracias/Jean- Claude/elpepueconeg/20100411elpneglse_7/Tes

48 TRIBUNA: Economía global MICHEÁL MARTIN Avances en la recuperación de Irlanda

Durante el periodo 2011 a 2014, se espera que el PIB de Irlanda crezca a una media del 4% anual MICHEÁL MARTIN 11/04/2010 Irlanda, como España y otros muchos países europeos, debe hacer frente a desafíos difíciles en la consolidación de las finanzas públicas y asegurar un futuro crecimiento sostenible y estable. Este será el tema clave de la próxima reunión en Madrid de Ministros de Finanzas bajo la Presidencia Española de la UE. En Irlanda, con el exitoso lanzamiento del plan para la recapitalización bancaria, la publicación del proyecto de Ley para la Reforma del Banco Central y el acuerdo logrado con los sindicatos de los servicios públicos, el Gobierno ha logrado importantes avances esta semana en el camino hacia la recuperación económica. Tenemos una estrategia triple enfocada a: estabilizar las finanzas públicas; reparar el sistema bancario, y mejorar la competitividad y fomentar el empleo sostenible. El acuerdo sobre la transformación del servicio público incluye propuestas sobre los salarios hasta 2014, una reducción de empleados y una reconfiguración del servicio con vistas a reducir costes y maximizar el rendimiento. La puesta en marcha de este acuerdo contribuirá a un clima de relaciones industriales más estable al salir el país de la recesión económica global. El Gobierno ha actuado con rapidez para abordar las debilidades reguladoras que salieron a la luz a raíz de la crisis económica y financiera global. Han sido nombrados un nuevo gobernador del Banco Central y un nuevo regulador financiero y el proyecto de Ley para la Reforma del Banco Central fortalecerá las responsabilidades del mismo y la supervisión parlamentaria, salvaguardando de este modo los intereses de los consumidores y los inversores. El anuncio hecho esta semana por el regulador financiero de que los bancos estarán obligados a mantener unas reservas de capital del 8% está en consonancia con la práctica internacional. Es una de las principales formas de medir la fuerza financiera de un banco, señala el regulador financiero, y pondrá punto final a la crisis bancaria. El gobernador del Banco Central ha dicho que estos costes serán manejables y asumibles para el Estado. No cabe duda de que aquí ha habido prácticas bancarias chapuceras con los bancos concediendo préstamos inmobiliarios de forma temeraria. Pero la nueva Agencia Nacional para la Gestión de Activos (NAMA), establecida por el Gobierno de Irlanda y aprobada por la Comisión Europea, asegurará la seguridad, estabilidad y capacidad del sistema bancario irlandés. NAMA retirará los activos de mayor riesgo de la banca. Ha comenzado el proceso de transferir préstamos que cumplen los requisitos desde las instituciones financieras designadas. Esperamos completar este proceso a final de año con la transferencia de activos por unos 80.000 millones de euros. NAMA está comprando el primer segmento de estos préstamos con un 47% de descuento sobre el monto original de 16.000 millones. Algunas de estas pérdidas serán cubiertas por los propios bancos aumentando el capital público y vendiendo activos. Pero la inevitable realidad es que el Estado tendrá también que inyectar capital. Una carga difícil de aceptar sobre los hombros del contribuyente, pero que hay que afrontar para asegurar un sistema bancario que funcione y que puede dar créditos a pequeñas empresas y sacar al país de la recesión. El

49 Gobierno ha fijado objetivos concretos para los bancos que les obligará a dar facilidades de crédito a las pymes. En los últimos dos años, hemos hecho ajustes presupuestarios equivalentes al 7,5% del PIB y estas decisiones difíciles nos han dado credibilidad fiscal para abordar los problemas bancarios. Hemos engendrado confianza en nuestra economía en la escena internacional y cosechado los beneficios de caída en el coste de los préstamos. La política presupuestaria irlandesa en la crisis ha recibido la aprobación de muchos, incluyendo CE, BCE, OCDE y FMI. Se espera que la economía vuelva al crecimiento en la segunda mitad de este año y, al arreglar los bancos, nuestra economía crecerá más rápido. Durante el periodo 2011 a 2014, se espera que nuestro PIB crezca una media del 4% anual y este crecimiento será impulsado por las exportaciones. De hecho, las últimas cifras muestran que el país tuvo un superávit de más de 38.000 millones el año pasado. Los factores que facilitaron nuestro reciente éxito económico permanecen. Irlanda sigue siendo un lugar muy interesante para los negocios. Estamos en la UE y en la eurozona con pleno acceso al Mercado Interno Europeo. Tenemos mano de obra joven, con muy buena formación y flexible, y un régimen impositivo favorable a los negocios, una economía abierta orientada hacia la exportación y un enfoque a favor de la empresa. La economía global está mejorando y confiamos en aprovechar el repunte. Nuestra economía es muy flexible y tiene un buen historial de rápida adaptación. http://www.elpais.com/articulo/economia/global/Avances/recuperacion/Irlanda/elpepueconeg/ 20100411elpnegeco_8/Tes

50 ANÁLISIS: Economía global - Coyuntura nacional

Balance provisional del primer trimestre de 2010 Los resultados, en términos de PIB y de empleo, no han sido muy distintos de los del último trimestre de 2009 Los datos de producción industrial de enero y febrero han vuelto a caer y han decepcionado ÁNGEL LABORDA 11/04/2010

Sin apenas darnos cuenta, ya hemos consumido el primer cuarto del año, así que es el momento de hacer una primera aproximación al balance económico del mismo. Las

51 conclusiones deben tomarse con cautela, pues aún quedan datos importantes por conocer. La información más sólida, de mayor calidad y más completa nos la dan los indicadores de oferta y del mercado laboral, así como algunos indicadores de demanda de consumo de los hogares. En base a toda ella puede concluirse que los resultados de este trimestre, en términos de PIB y de empleo, no han sido muy distintos de los del trimestre anterior, en el que el PIB retrocedió un 0,1%. En los gráficos adjuntos se recoge el comportamiento de algunos de estos indicadores. Los datos de producción industrial de enero y febrero han decepcionado, pues, tras dejar de caer en el tercer trimestre del pasado año e iniciar la recuperación en el cuarto, en estos primeros meses del año en curso han vuelto a retroceder respecto a la media del trimestre precedente. No es un dato aislado, pues el mismo comportamiento muestran los afiliados a la Seguridad Social en el sector, un indicador sólido del empleo, así como otros, como la cifra de negocios y la entrada de pedidos de enero. La confianza de los empresarios del sector va recuperándose, pero de momento los indicadores cuánticos no acaban de arrancar. Si pasamos a la construcción, los datos son aún peores. Algunos indicadores registraron una mejora en los meses centrales del pasado año, que se explica por los efectos del Plan E, pero conforme este plan se ha ido agotando, dichos indicadores se han dado la vuelta y vuelven a intensificar sus caídas. Tal es el caso del consumo de cemento o del más significativo, los afiliados a la Seguridad Social en la construcción, que en este trimestre disminuyen a un ritmo anualizado del 20%. Es cierto que los datos de ventas de viviendas muestran una recuperación, pero esto tardará en reflejarse en una mayor actividad constructora, pues antes deben de reducirse los elevados niveles de existencias sin vender. El sector servicios es muy grande y heterogéneo, pero los indicadores representativos del conjunto del mismo han detenido su tendencia de recuperación de los dos trimestres precedentes. Tal es el caso de la cifra de negocios, aunque en este caso sólo hay datos de enero, y de los afiliados a la Seguridad Social, cuya media trimestral da un crecimiento cero, tras un aumento anualizado del 0,7% en el trimestre precedente. El turismo, tanto interior como exterior, parece que ha iniciado su recuperación, pero habrá que esperar a los datos de marzo para confirmarlo. Entre los indicadores de consumo, el índice de comercio al por menor y las matriculaciones de turismos son los más representativos, aunque no totalmente comprensivos del que es el mayor agregado de la demanda. La media de enero y febrero del primero da un crecimiento cero sobre la media del trimestre precedente, aunque el dato es mejor que la caída de casi el 5% anualizado que registró en ese trimestre. Por lo que respecta a las ventas de automóviles, se utilizan las tasas interanuales para señalar la fuerte recuperación de las mismas, pero las tasas interanuales son indicadores retrasados, y de lo que aquí estamos hablando es del comportamiento del primer trimestre sobre el trimestre precedente, no sobre el mismo del año anterior. En estos términos, las matriculaciones han aumentado en torno a un 3% en tasa anualizada, frente a tasas del 145% y 33% en el tercer y cuarto trimestres del pasado año, respectivamente. Es decir, su contribución al crecimiento trimestral del consumo va a ser muy inferior al de esos trimestres. Por último, los datos del mercado laboral (ya hemos comentado la evolución de los afiliados a nivel sectorial) confirman que este trimestre no ha diferido mucho del anterior. Los afiliados totales descendieron un 1,9% anualizado, frente a un 2,1% en el anterior, y los parados registrados aumentaron a un ritmo, también anualizado, del 10%, prácticamente lo mismo que el 11% del anterior. Habrá que esperar, por tanto, a la primavera para ver brotar a la economía española, aunque más importante que el cuándo es el cómo, siendo muchas las reservas a este respecto. -

52

El consumo de energía eléctrica, en positivo Un indicador importante y significativo en todas las economías es el de consumo eléctrico. Es un indicador de actividad- demanda general muy ligado al ciclo, aunque su comportamiento reciente trimestre a trimestre difiere bastante del PIB estimado por la contabilidad nacional. Corregido de estacionalidad, calendario y temperatura, registró un crecimiento trimestral importante en el tercer trimestre de 2009, como muchos otros indicadores de producción; luego, en el cuarto volvió a caer en tasas negativas y en el primero de 2010 vuelve a repuntar con un crecimiento anualizado de nada menos que del 9,6%. Puede que la corrección del efecto temperatura no sea total y eso influya en su comportamiento, en especial en el primer trimestre de este año, pero a la vista de este y otros indicadores cabe plantearse si la contabilidad nacional no suaviza excesivamente el comportamiento de la economía española y si, como se observó en la zona euro en su conjunto, la misma no registró ya en el tercer trimestre del pasado año un primer intento de recuperación, aunque luego dicha recuperación no se haya consolidado. http://www.elpais.com/articulo/economia/global/Balance/provisional/primer/trimestre/2010/el pepueconeg/20100411elpnegeco_4/Tes

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REPORTAJE: Dinero & inversiones Una navaja suiza Las cotizadas dan múltiples usos a la autocartera entre los recelos de la CNMV El límite máximo de acciones propias ha pasado del 5% al 10%// El supervisor teme incidencias en la formación de precios// En 2009 la autocartera generó minusvalías de 328 millones de euros// FCC, con títulos propios equivalentes al 8,25%, es quien más tiene DAVID FERNÁNDEZ 11/04/2010 La autocartera es como esas navajas suizas multiusos: sirve para todo. Comprar y vender acciones propias concede a los gestores de las compañías un amplio margen de maniobra. Que se quiere retribuir al accionista -amortizando o repartiendo los títulos-, pues se engorda la autocartera; que se quiere remunerar en especie a la alta dirección, pues se adquieren acciones; que se quiere dar liquidez a la cotización, pues se pone en marcha un programa de recompra; que se quiere usar en una operación corporativa como canje, pues se acumulan títulos durante los meses previos; que se necesita establecer un blindaje ante opas hostiles, pues se retiran del mercado acciones para que no caigan en manos del rival y, al haber más oferta, aumentar el precio de cotización... Las posibilidades de actuación de las que disponen las empresas con este instrumento se multiplicaron hace un año cuando se modificó la Ley de Sociedades Anónimas para adaptarla a la normativa europea. Uno de los artículos objeto de cambios fue el 75, que se refiere a la adquisición de acciones propias. En concreto, el límite máximo que una compañía puede almacenar en autocartera se incrementó del 5% del capital social al 10% para las cotizadas y hasta el 20% en las no cotizadas. Este cambio normativo preocupa a la CNMV ya que en los últimos años, como consecuencia de los numerosos movimientos corporativos que se han dado en nuestro mercado, un número creciente de compañías tiene un free float -capital que cotiza libremente en Bolsa descontando las participaciones en manos de los accionistas de control- inferior al 10%. A finales de enero pasado, el presidente del supervisor bursátil, Julio Segura, presentó en un hotel madrileño el plan de actividades del organismo para este año y una de las propuestas de modificaciones normativas que destacó fue la relativa a las operaciones con títulos propios. "Consideramos necesario reflexionar sobre la operativa de autocartera en el mercado español, en la línea de evitar actuaciones discrecionales que pudiesen incidir en la formación de precios", explicó Segura. El resultado de esta reflexión podría conllevar, según la CNMV, el desarrollo de iniciativas para "limitar" la operativa de autocartera a los contratos de liquidez y a las modalidades previstas en el Reglamento comunitario de 2003, en lo que se refiere a los programas de recompra y estabilización de instrumentos financieros. El calendario que maneja el supervisor para esta modificación normativa es que los cambios entren en vigor en el primer trimestre de 2011. La normativa vigente permite además que los movimientos de las compañías con su autocartera sean bastante sigilosos. El Real Decreto 1262/2007, de 19 de octubre, establece la obligación de comunicar la posesión de acciones propias cuando la compañía adquiera títulos, en un solo acto o por actos sucesivos, y dicha adquisición alcance o supere el 1% de los derechos de voto. En lo sucesivo, la obligación de comunicar llegará cuando la suma de las siguientes compras de acciones sobrepase de nuevo el 1% del capital (para este cómputo no se

54 deducirán las enajenaciones). Como la normativa sólo establece el deber de comunicar la autocartera cuando ésta aumenta hasta un determinado umbral y no cuando desciende, los inversores no perciben la magnitud total de los movimientos que hacen las compañías hasta que éstas no publican sus memorias anuales. Aparte de servir para un determinado fin, las operaciones de autocartera generan plusvalías o pérdidas a las compañías según el tino de éstas a la hora de elegir el momento de comprar y vender sus títulos. La información sobre este resultado figura en el informe anual de gobierno corporativo. Hasta el momento 96 empresas de las 119 compañías incluidas en el Índice General de la Bolsa de Madrid han remitido a la CNMV este documento y el saldo arroja unas pérdidas conjuntas por los movimientos con acciones propias de 328,5 millones de euros. Estas minusvalías se produjeron además en un contexto claramente alcista para la renta variable en el que la Bolsa española se apuntó una revalorización del 29%. De acuerdo con la normativa contable en vigor, los resultados de las operaciones con autocartera no se incluyen en la cuenta de resultados, pero sí afectan a los fondos propios de las empresas. Gran parte de las pérdidas en 2009 por la autocartera de las compañías cotizadas se deben al BBVA. La entidad tuvo unas minusvalías de 238 millones el pasado ejercicio -en 2008 los números rojos en este capítulo fueron de 172 millones- operando con acciones propias y eso que los títulos tuvieron una subida anual del 47%. Las compras de acciones por parte del BBVA se hicieron a un precio medio de 9,34 euros y las ventas, a 8,95 euros. Tras BBVA, las compañías que mayores pérdidas tuvieron comprando y vendiendo sus títulos fueron SOS Corporación (76,6 millones), Realia (28 millones), FCC (25 millones) y Bankinter (113,9 millones). Por el contrario, aquellos grupos que mejor invirtieron en autocartera en 2009 fueron Banco Popular (tuvo unas plusvalías de 49,5 millones), ACS (14,24 millones) y Ebro Puleva (10,71 millones). Los bancos suelen ser los más activos en los movimientos de autocartera ya que a los fines generales señalados anteriormente hay que añadir que intervienen casi a diario en el mercado por cuenta propia o de terceros para proporcionar cobertura a las carteras de sus clientes o para facilitar la intermediación de acciones. El Banco Santander, por ejemplo, todavía no ha publicado la memoria de 2009, pero en 2008 adquirió 758,5 millones de acciones (importe efectivo de 7.799 millones) y vendió 694,2 millones de títulos por 7.384 millones. El banco obtuvo unas plusvalías de 12 millones de euros. La compañía cotizada que más se acerca en la actualidad al límite máximo del 10% de autocartea es FCC. La constructora acumula acciones propias equivalentes al 8,25% debido a que ha puesto en marcha un programa de recompra de títulos para hacer frente a las obligaciones derivadas de una emisión de bonos canjeables por valor de 440 millones de euros. Otra empresa con un plan de recompra de acciones en vigor es Tecnocom. El grupo tecnológico pretende adquirir un máximo del 10% de su capital en un plazo de cinco años. El objetivo es utilizar esos títulos para futuras operaciones corporativas o para reducir el capital social. Tras FCC, las compañías que más autocartera acumulan son Renta 4 (tiene el 7,66%), Antena 3 Televisión (5%), Inmobiliaria del Sur (4,22%), ACS (4,14%), y Azkoyen (4,1%). - http://www.elpais.com/articulo/dinero/inversiones/navaja/suiza/elpepueconeg/20100411elpne gdin_1/Tes

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56 REPORTAJE: Dinero & inversiones - Finanzas personales Liquidez para las preferentes BME crea un mercado de renta fija para minoristas D. FERNÁNDEZ 11/04/2010 Los pequeños inversores tendrán un mercado para comprar y vender títulos de renta fija. El estreno de esta plataforma, denominada Sistema Electrónico de Negociación de Deuda (SEND), está previsto para el próximo 10 de mayo. La iniciativa de Bolsas y Mercados Españoles (BME) aspira a mejorar la transparencia y la liquidez del mercado español de deuda corporativa. "Este proyecto facilitará el acceso se los inversores minoristas al mercado de renta fija y supondrá un importante avance en la protección de este segmento de inversores", según Francisco Oña, presidente del Mercado de Deuda Corporativa, AIAF. Hasta el momento, sólo existía una plataforma de negociación sobre deuda para institucionales (SENAF). Los activos que podrán negociarse en la nueva plataforma serán todas aquellas emisiones posteriores al 1 de enero de 2009 con un nominal unitario igual o inferior 1.500 euros y cuyo destino final fuese el pequeño ahorrador. Entre estos activos se encuentran participaciones preferentes, bonos y obligaciones simples, obligaciones subordinadas, obligaciones con bonificación fiscal, cédulas y los pagarés con vencimiento superior a seis meses. Teniendo en cuenta el límite temporal que se ha fijado para admitir las emisiones a negociación, serán las participaciones preferentes el activo que más pese en la nueva plataforma. La CNMV, que apoya a la iniciativa de BME, se mostró en su momento muy crítica con la forma de comercializar las preferentes por parte de bancos y cajas. Las entidades, ávidas por captar liquidez y reforzar sus balances, colocaron a través de sus redes este tipo de deuda perpetua, de baja liquidez y cuyo pago de intereres está condicionado a que la entidad tenga beneficios, entre cientos de miles de pequeños ahorradores. "Adicionalmente, será susceptible de poder incluir entre los activos cotizados determinados activos de deuda pública tanto nacional como europea, así como otros activos de deuda corporativa emitidos en otros mercados internacionales", puntualizó Julio Alcántara, director general de AIAF, en la presentación del proyecto. El sistema de contratación del SEND será por órdenes o aplicaciones, con operativa a vencimiento y contado. La compensación y liquidación de las operaciones se hará a través de Iberclear por saldos. El horario del nuevo mercado de renta fija será continuo, de 8.30 a 16.30. - http://www.elpais.com/articulo/dinero/inversiones/Liquidez/preferentes/elpepueconeg/20 100411elpnegdin_2/Tes

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España se mira en el espejo austriaco El Gobierno propone un fondo de indemnización por despido que el trabajador pueda llevar de una empresa a otra - La contratación, uno de los escollos del diálogo social Los agentes sociales conocerán mañana el borrador que ha escrito el Ejecutivo LUIS DONCEL - Madrid - 11/04/2010 Dos de los asistentes a la reunión que se celebró el pasado martes en La Moncloa tenían buenos motivos para desear que no se alargara demasiado. José Luis Rodríguez Zapatero e Ignacio Fernández Toxo, conocidos culés, no querían perderse bajo ningún concepto el partido que esa noche disputaban el Barça y el Arsenal. Dos de los asistentes a la reunión que se celebró el pasado martes en La Moncloa tenían buenos motivos para desear que no se alargara demasiado. José Luis Rodríguez Zapatero e Ignacio Fernández Toxo, conocidos culés, no querían perderse bajo ningún concepto el partido que esa noche disputaban el Barça y el Arsenal. Pero el fútbol no impidió que el encuentro trajera una novedad de calado: el presidente del Gobierno puso sobre la mesa la propuesta de estudiar la reforma que emprendió Austria en 2002 como forma de mejorar la calamitosa situación del mercado laboral español. Los líderes de UGT, Cándido Méndez, y de CC OO, Toxo, recogieron el guante. El modelo austriaco se basa en el principio de que las empresas constituyan un fondo para cada trabajador que se abonaría en caso de despido, una hucha complementaria a la prestación que recibe del Estado. Este modelo fomenta la movilidad laboral porque el empleado se lleva a su nuevo puesto la cantidad no consumida del dinero que ha ido acumulando a lo largo de su vida laboral. Zapatero no invitó a la reunión del martes a la patronal, lo que ha provocado cierto malestar entre los empresarios, que esta semana han mantenido conversaciones con el ministro de Trabajo, Celestino Corbacho. Los agentes sociales sí que estarán en la reunión de mañana a las 16.30 para conocer la redacción definitiva del borrador que ha presentado el Gobierno de reforma laboral. Este documento -que modificará la propuesta, muy poco concreta, formulada por el Ejecutivo el pasado 5 de febrero- incluirá sólo los asuntos pacíficos, en los que el acuerdo está cantado. El borrador se encuentra todavía en una fase preliminar, por lo que está sujeta a la negociación y a las aportaciones de sindicatos y patronal. Aunque el texto eludirá los aspectos más polémicos, como el análisis del modelo austriaco, estos sí que se tratarán en la reunión de mañana, a la que no asistirán los primeros espadas de cada organización. Fuentes de los dos sindicatos coinciden en que la ampliación del contrato indefinido con un despido más barato -por ejemplo, el de 33 días frente a los 45 habituales- puede convertirse en uno de los grandes escollos de la negociación. Este tipo de contrato, muy poco extendido, se aplica ahora a todos los trabajadores excepto a los hombres de entre 31 y 44 años. La pretensión de extenderlo urbi et orbi puede chocar con la oposición de los representantes de los trabajadores. En UGT también objetan la posible reforma de los servicios de intermediación. Uno de los grandes conflictos es la reclamación que tradicionalmente han enarbolado los empresarios de rebajar las cotizaciones sociales. Los sindicatos consideran que ni siquiera tendrán que oponerse el lunes -"Es un tema fuera de debate", insisten fuentes de UGT-, pero aseguran que si el Gobierno tratara de hacer con este asunto un guiño a la CEOE lo considerarían como una

58 declaración de guerra suficiente como para hacerles levantarse de la mesa. "¿Dónde está la coherencia de prolongar la edad de jubilación a los 67 años y, al mismo tiempo, rebajar las cotizaciones?", se preguntan en CC OO. Se calcula que cada punto porcentual de rebaja supondría una merma de ingresos al Estado de unos 2.500 millones de euros. Frente a los temas calientes que no se incluirán en el borrador, más posibilidades de un acuerdo rápido tienen las medidas encaminadas a reducir el desbordante paro juvenil -que entre los menores de 25 años roza el 40%-, reordenar las bonificaciones que se dan a las empresas por contratar, la reducción de la temporalidad, estímulos a la información y la reducción de jornada. Son los asuntos que menos quebraderos de cabeza van a dar en los próximos días al ministro Corbacho. Lo que ya se propuso en febrero - El Gobierno presentó el 5 de febrero un esbozo de reforma laboral muy poco concreto. La promoción de los contratos indefinidos y la lucha contra la temporalidad estaban entre los principales objetivos. Entre otras medidas, constaba el aumento de inspecciones de Trabajo, la imposición de más costes a las empresas que más recurran a la temporalidad y el impulso al contrato con una indemnización de 33 días. - Menos jornada: con el ejemplo alemán como referente, se trata de fomentar el uso de la reducción de jornada para que en caso de dificultades económicas no se recurra al despido. - Revisión de bonificaciones a la contratación: el Gobierno considera que esta figura, que supone un coste de 3.000 millones al año, han perdido eficacia porque se han universalizado. Se reorientarán a los jóvenes, discapacitados y víctimas de violencia de género. - Más empleo joven: para apoyar a los que tienen entre 16 y 24 años y, sobre todo, a los que carecen de formación se crearán contratos con derecho a cobrar el desempleo. ¿Qué hacen para tener sólo un 5% de paro? No es esta la primera vez que se habla del modelo austriaco de indemnización por desempleo. Muchos expertos, incluido el gobernador del Banco de España, llevan tiempo sugiriendo la conveniencia de trasplantar a España algunos de sus aspectos. Pero parece que ahora por fin el Gobierno y los agentes sociales lo van a estudiar a fondo. La idea, todavía muy verde, se basa en adaptar algunos aspectos del camino austriaco, no todo el modelo. Fuentes sindicales subrayan que sólo lo aceptarían si no se rebajaran los derechos de los trabajadores por despido. Y señalan que para ello, sería necesario que el Estado se rascara el bolsillo. "Si quieren la cuadratura del círculo, sólo se conseguirá con aportaciones del Erario público", insisten. Porque la reforma que en Austria entró en vigor 2003 aumenta el número de trabajadores con derecho a cobrar la indemnización. A cambio, la cuantía media disminuye. El empresario tiene que ingresar en el fondo de cada empleado un 1,5% del salario. Los derechos acumulados por cada trabajador permanecen en una cuenta hasta su jubilación. Sólo si es despedido, puede cobrar antes ese dinero. Como decía el Banco de España en su boletín de julio de 2009: "Este sistema ha logrado que los derechos de despido sean adquiridos por todos los trabajadores desde el primer día de trabajo. Asimismo, preserva estos derechos en caso de un cambio voluntario de empresa, con lo que la movilidad de los trabajadores debería verse favorecida". A falta de una evaluación rigurosa de la vía vienesa, la comparación entre los mercados laborales de los dos países es sonrojante: España padece una tasa de paro de casi el 19%, rozando el 40% para los menores de 25 años; frente a un desempleo en Austria del 5,4%, y del 12% entre sus jóvenes. Aunque esta diferencia se explica por muchos otros factores, y no sólo por el modelo austriaco. http://www.elpais.com/articulo/economia/Espana/mira/espejo/austriaco/elpepueco/20100411elpepieco_1/Tes#de spiece1

59 REPORTAJE: Primer plano

Crecer sí, pero poco y sin empleo La nueva realidad poscrisis apunta a un largo periodo de bajo crecimiento y alto desempleo "El paro crecerá en EE UU hasta junio y en la zona euro hasta 2011"// El empleo es un indicador atrasado de la evolución de la economía// En la zona euro, el paro estructural alcanzará el 8,8% en 2011// En la OCDE habrá 20 millones de parados más que antes de la crisis// En 1990/1991 y en 2001 ya se produjo una recuperación sin empleo// La crisis se ha cebado especialmente en los jóvenes// El fuerte aumento de la productividad explica en parte la escasez de empleos// El desempleo de larga duración incrementa la tasa de paro estructural

ALICIA GONZÁLEZ 11/04/2010 Aunque la mayoría de las economías -oficialmente aún no es el caso de la española- ya han dejado atrás la recesión, el paro seguirá creciendo hasta mediados de año. Eso dicen, al menos, los pronósticos del Fondo Monetario Internacional (FMI) y de la Organización para la Cooperación y el Desarrollo Económico (OCDE). Aunque la mayoría de las economías -oficialmente aún no es el caso de la española- ya han dejado atrás la recesión, el paro seguirá creciendo hasta mediados de año. Eso dicen, al menos, los pronósticos del Fondo Monetario Internacional (FMI) y de la Organización para la Cooperación y el Desarrollo Económico (OCDE). Según esta última, "la tasa de paro alcanzará su máximo nivel en la primera mitad de 2010 en Estados Unidos, pero no será hasta 2011 cuando el desempleo empiece a reducirse en la zona euro", siempre más retrasada en el ciclo. En el caso español, la teoría dice que la economía no crea empleo neto hasta que su crecimiento alcanza un ritmo de, al menos, un 2% y ni siquiera el Gobierno, más optimista que el resto de los analistas, prevé que se alcance ese nivel antes de 2012. Más allá de las circunstancias concretas que afectan a cada país, ¿cuánto hay de verdad en ese pesimismo que rodea a la búsqueda de empleo? Las previsiones no permiten grandes alegrías, al menos en el mundo considerado desarrollado, pues la recuperación sigue otro patrón bien distinto entre los países emergentes.

60 Es cierto que la ausencia de previsibilidad de la crisis ha restado credibilidad a los pronósticos económicos. Aunque los últimos datos del mercado laboral, sobre todo en Estados Unidos, han suscitado un cierto optimismo entre los analistas. Como también es verdad que el paro es un indicador atrasado de la evolución de la economía y que cuando los datos de la actividad comienzan a teñirse de rojo, las oficinas de empleo todavía tardan un tiempo antes de empezar a llenarse de nuevos parados. Al revés sucede lo mismo. Estados Unidos abandonó la recesión en el tercer trimestre de 2009 y aunque marzo ha sido un buen mes para el empleo nadie lanza las campanas al vuelo. "Pese a esas buenas noticias, el mercado de trabajo permanece extremadamente débil", admitía esta semana el vicepresidente de la Reserva Federal, Donald Kohn. "Si como prevemos, el crecimiento va a ser muy moderado, es más que probable que las ganancias de empleo sólo reducirán la tasa de paro muy lentamente". Un patrón especialmente grave para España, cuya tasa de paro se sitúa en el 18,8% y no pocos analistas prevén que trepará hasta el 20% en un futuro no muy lejano. Tanto como para que algunos españoles vuelvan a salir fuera a buscar la oportunidad que no encuentran en su país. No era una opción en la que hubieran pensado Conchi y Paco cuando empezaron a vivir juntos. Entonces, el sector de la construcción donde trabajaban funcionaba a pleno rendimiento y podían incluso permitirse el lujo de rechazar trabajos y cambiar de empresa con cierta frecuencia, con la consiguiente mejora en las condiciones laborales y salariales. Ahora hace ya casi un año que viven en Leeds, una pequeña ciudad al norte de Londres. Ante las malas perspectivas de la economía, y de su sector en particular, optaron por mejorar su formación y, claramente, el inglés era una laguna. Como algunos años antes habían hecho sus propios tíos o sus abuelos, se marcharon fuera a probar suerte y tras asumir que era imposible encontrar un empleo en lo suyo -que bastante tiene Reino Unido con su propia crisis inmobiliaria-, apostaron por probar casi con cualquier empleo. En Leeds no faltan ofertas de empresas de catering y ya le empiezan a coger el truco a eso de servir cócteles y pasar bandejas. "Nos queda por lo menos otro año u otros dos aquí", asegura Conchi. "Ninguno de nuestros compañeros ha encontrado empleo y, lo peor, es que ninguno cree que pueda hacerlo porque el sector está completamente parado. Y hay algunos casos dramáticos porque la prestación por desempleo se les termina y tienen hipotecas e hijos que mantener". No en vano una de las características de la actual crisis ha sido su fuerte impacto sobre el empleo, su virulencia a la hora de destruir puestos de trabajo. Sólo Estados Unidos ha perdido más de ocho millones de empleos con la crisis y si, además, tenemos en cuenta a los que ya han dejado de buscar empleo, los que trabajan a tiempo parcial de forma no voluntaria y los que tienen un empleo por debajo de sus posibilidades, la tasa de paro total pasa del 9,7% oficial hasta el 16,9%, según cálculos del Deutsche Bank. Entre los países del selecto club de la OCDE, habrá 20 millones de parados más de los que había al inicio de la crisis, lo que supone el peor comportamiento desde el final de la Segunda Guerra Mundial. Pero aún más, la Organización Internacional del Trabajo (OIT) calcula que en todo el mundo el número de parados se situará entre 219 y 241 millones, la mayor cifra nunca registrada. Y no se trata sólo de cantidad, ya de por sí importante, sino también de calidad. Los analistas de Banesto lo explican en uno de sus últimos informes de Economías y Mercados. "Los despidos permanentes [en Estados Unidos] han sido mucho más elevados que otras veces y han superado con creces a los temporales". Los datos de marzo revelan precisamente que la mayor parte del empleo creado lo es de carácter temporal y las propias autoridades reconocen que se está produciendo un cambio sectorial en el mercado laboral, lo que implica que los sectores más intensivos en puestos de trabajo, que han sido los más afectados por la crisis

61 como la construcción, no serán precisamente los que lideren la creación de empleo en esta etapa. El deterioro del mercado laboral ha sido mucho más intenso en Estados Unidos [ver gráficos de la siguiente página] que en la eurozona. En buena medida debido a los programas puestos en marcha por los Gobiernos para frenar la destrucción de empleo, como el Kurzarbeit alemán. Pero eso no significa que las perspectivas sean ahora mejores a este lado del océano. "Una débil recuperación de la demanda, combinada con niveles muy bajos de productividad, implica que las empresas serán muy reticentes a la hora de contratar trabajadores. Parece muy probable que incluso cuando la economía empiece a recuperarse, el paro permanecerá elevado por bastante tiempo y luego sólo empezará a caer de forma lenta. En otras palabras, será una recuperación sin empleo. Y eso significa que el consumo permanecerá bajo, lo que a su vez debilitará aún más la recuperación", aclara desde Milán Marco Annunziata, economista jefe de UniCredit. No sería la primera vez que asistimos a una recuperación sin empleo. Los profesores David Andolfatto y Glenn MacDonald ya describieron en un trabajo en 2004 que en las dos anteriores recesiones en Estados Unidos [oficialmente la de 1990-1991 y la de 2001] "el crecimiento del empleo había tardado varios trimestres en seguir a la recuperación económica, un escenario que los analistas pasarían a conocer como recuperación sin empleo". Para otros expertos, el concepto de recuperación sin empleo es una contradicción en sí misma, pues entienden que no se puede hablar verdaderamente de recuperación si no tiene la fortaleza suficiente como para crear empleo. Los profesores Andolfatto y MacDonald citan en su informe un trabajo de 2003 del actual presidente de la Reserva Federal, Ben Bernanke, para justificar ese comportamiento, entre otros factores, por el incremento de la productividad. "Un fuerte crecimiento de la productividad ofrece grandes beneficios para la economía a largo plazo [...]. Pero en los dos últimos años, dado el errático comportamiento de la demanda final [el incremento de la productividad], también ha permitido a las empresas cubrir sus necesidades de producción sin contratar más trabajadores", explicaba Bernanke. A finales de 2009 -los últimos datos disponibles- la productividad crecía en Estados Unidos a un ritmo del 5,8% anual. En el último año la OIT ha venido alertando del riesgo de una crisis del empleo, lo que algunos expertos del FMI han calificado como la tercera oleada de la crisis, tras la financiera y la económica. Y lo cierto es que no se trata de compartimentos estancos sino que entre ellas se alimentan y tienen consecuencias de carácter tanto temporal como estructural. Clemente de Lucia, de BNP Paribas, recuerda que "la historia sugiere que las recesiones causadas por problemas financieros tienden a durar más y a ser más severas. A ello hay que añadir que la recesión de 2009 fue también sincronizada, un elemento que ha exacerbado la caída del PIB" y que puede tener consecuencias tanto temporales como estructurales sobre la economía y, en particular, sobre el empleo. Es lo que en 1986 dos entonces desconocidos profesores del MIT y de Harvard, Olivier Blanchard -actual economista jefe del FMI- y Larry Summers -ahora director de la Oficina Económica de la Casa Blanca-, describieron como el efecto "histéresis". La teoría económica tradicional aseguraba que el desempleo de larga duración llevaba a los trabajadores parados a reducir su nivel de expectativas salariales, momento en el que las empresas reanudaban la contratación con el consiguiente ahorro de costes. Blanchard y Summers descubrieron que eso no era siempre así, que muchos parados de larga duración o bien dejaban de buscar empleo, desmotivados, o su nivel de formación dejaba de ser el apropiado para las necesidades productivas. De esa forma, no se daban presiones a la baja sobre los salarios y la tasa de paro

62 estructural, esa que es compatible con un nivel estable de la inflación [conocida como Nairu], se disparaba. Y a mayor nivel de paro estructural, menor crecimiento potencial, el nivel de crecimiento que alcanza una economía si pone funcionar a pleno rendimiento todos sus factores. Las especiales tensiones que rodean al mercado laboral en esta ocasión han rescatado el concepto de histéresis del olvido, pero el propio Blanchard ha matizado las conclusiones de aquel trabajo en una reciente entrevista con la revista del FMI. "Digamos que el crecimiento va a ser bajo, que el incremento de la productividad va a ser normal y que el aumento del empleo va a ser muy escaso", puntualiza. Otros economistas, sin embargo, dan plena vigencia a sus tesis, entre otros De Lucia. En su opinión, al menos en la eurozona, "suscita especial preocupación que buena parte del aumento del desempleo pueda traducirse en una mayor tasa de paro estructural". Y esa es su previsión. Para la zona euro, sus cálculos apuntan a que el paro estructural en esta crisis aumentará desde el 8% estimado en el segundo trimestre de 2009 hasta el 8,8% a mediados de 2011. Para Estados Unidos, el incremento es mucho menor, del 4,9% al 5,1% en el mismo periodo. La misma tesis es compartida por la OCDE que en un reciente informe aseguraba que "la recesión ha mermado el crecimiento potencial de las economías de la zona [los 30 integrantes de la organización] a medio plazo y eso supondrá una reducción media del PIB del 3% para esos países". No son sólo las variables y los modelos económicos los que están en juego. Un escenario semejante tiene consecuencias devastadoras para muchas personas y serias implicaciones sociales, que los Gobiernos deben tener en cuenta a la hora de diseñar sus políticas. Nuestros protagonistas, Conchi y Paco, representan sin saberlo uno de los prototipos del nuevo parado de la recesión de 2009. Los jóvenes han sido uno de los sectores más golpeados por la crisis, con un desempleo del 15% entre los menores de 25 años según los datos de la OIT. En España, esa tasa se dispara dramáticamente hasta el 40%. Una tendencia con consecuencias nefastas para la vida laboral de la gente que está empezando su carrera. David Ellwood, economista y ahora decano de la Escuela de Gobierno John F. Kennedy en Harvard, demostró ya en 1982 que el desempleo al comienzo de la vida laboral condiciona las perspectivas de empleo de los trabajadores y provoca una merma de su nivel salarial que afectará a toda su carrera. La explicación reside en que si no pueden trabajar y hacerse un currículo eso reduce sus perspectivas de ser contratados y la desilusión que ello provocaba les afecta a su vez en la forma en la que buscan empleo. No son sólo los jóvenes, claro. La OCDE recuerda que todos aquellos con vínculos débiles con el mercado laboral (trabajadores mayores, inmigrantes, gente con escasa formación...) dejan de buscar empleo en un momento dado si el paro se prolonga y ello provoca una fuerte caída de la tasa de actividad, con nefastas consecuencias económicas y sociales de futuro. Lo peor es que todo apunta a que ese escenario es el que conforma la nueva realidad poscrisis, un largo periodo de bajo crecimiento y elevado desempleo. Con todo lo que ello conlleva. 'Kurzarbeit', la receta alemana Un paro del 8%, en un país con descensos de la producción industrial del 12% y que hasta hace poco parecía el enfermo de Europa, ha convertido a Alemania en una de las estrellas de la actual coyuntura económica. La respuesta está en el Kurzarbeit, un programa para mantener el empleo a corto plazo que ha permitido a la locomotora europea sortear razonablemente bien la crisis en términos de empleo. Otros países han aplicado planes parecidos aunque el más conocido es el alemán. El programa permite que las empresas en dificultades puedan reducir

63 la jornada de sus trabajadores, por un periodo máximo de 24 meses, en lugar de despedir a aquellos excedentes, todo gracias la generosa financiación de la agencia federal de empleo y con el beneplácito de sindicatos, empresarios y partidos políticos. El esquema hacía temer la existencia de una bolsa de paro embalsado que podría aflorar una vez que se retiraran los estímulos. Pero el Gobierno ha ido prorrogando la medida a lo largo de la crisis, y, hoy por hoy, las empresas podrían mantener esos trabajos de jornada reducida hasta finales de 2011, cuando previsiblemente la economía global ya habrá recuperado su velocidad de crucero. Los economistas explican que el éxito de la medida se debe a que las tensiones sobre los puestos de trabajo afectados eran temporales y no de carácter estructural. Pero el programa no está exento de riesgos. Más allá de esa fecha, Sebastian Kubsch, de Deutsche Bank, explica que podría "mermar la competitividad de las empresas alemanas por un persistente incremento de costes y el bloqueo a ajustes de empleo necesarios". El FMI, sin embargo, afirma que esta opción se ha demostrado más barata para los Estados que intentar recolocar a los parados. La eficacia, al menos por ahora, también. http://www.elpais.com/articulo/primer/plano/Crecer/poco/empleo/elpepueconeg/20100411elp neglse_2/Tes

64 Opinion

April 11, 2010 OP-ED COLUMNIST No One Is to Blame for Anything By FRANK RICH “I was right 70 percent of the time, but I was wrong 30 percent of the time,” said Alan Greenspan as he testified last week on Capitol Hill. Greenspan — a k a the Oracle during his 18-year-plus tenure as Fed chairman — could not have more vividly illustrated how and why geniuses of his stature were out to lunch while Wall Street imploded. No doubt he applied his full brain power to that 70-30 calculation. But the big picture eludes him. If the captain of the Titanic followed the Greenspan model, he could claim he was on course at least 70 percent of the time too. Greenspan was testifying to the commission trying to pry loose the still incomplete story of how the American economy was driven at full speed into its iceberg. He was eager to portray himself as an innocent bystander to forces beyond his control. In his rewriting of history, his clout in Washington was so slight that he was ineffectual at “influencing the Congress.” The “roots” of the crisis, he lectured, dated back to the fall of the Berlin Wall in 1989. In other words: Wherever the buck stops, you had better believe it’s not within several thousand miles of the Oracle. As he has previously said in defending his inability to spot the colossal bubble, “Everybody missed it — academia, the Federal Reserve, all regulators.” That, of course, is not true. In last Sunday’s Times, one of those who predicted the bubble’s burst — Michael Burry, an investor chronicled in “The Big Short” by Michael Lewis — told in detail of how Greenspan and others in power “either willfully or ignorantly aided and abetted” the reckless boom and the ensuing bust. But Greenspan is nothing if not a representative leader of his time. We live in a culture where accountability and responsibility are forgotten values. When “mistakes are made” they are always made by someone else. This syndrome is hardly limited to the financial sector. The Vatican hierarchy and its American apologists blame the press, anti-Catholic bigots and “petty gossip” for a decades- long failure to police the church’s widespread criminal culture of child molestation. Michael Steele, the G.O.P. chairman, has tried to duck criticism for his blunders by talking about his “slimmer margin” of error as a black man. New York’s dynamic Democratic duo of political scandal, David Paterson and Charles Rangel, have both attributed their woes to newspapers like The Times, not their own misbehavior. Such is our current state of national fecklessness that the gold medal for prompt contrition by anyone on the public stage belongs, by default, to David Letterman. He wasted little time in telling a national audience point blank that he had done “something stupid,” hurt those he loved and had a “responsibility” to “try to fix it.” In the land of Rod Blagojevich and Tiger Woods, the candid late-night talk show star is king. Woods’s apologetic Masters press conference last week came only after months of stalling, sponsor defections and well-publicized “rehab.” Along the way he briefly hired Ari Fleischer, the former Bush press secretary, to help manage his mess. Fleischer is not the only Bush spin artist to re-emerge as a hired damage-control hand in the post-Bush era. Dan Bartlett, a former presidential counselor, is a honcho at Public Strategies, the company recently enlisted by

65 Goldman Sachs to help erase the indelible tattoo of “a great vampire squid” imprinted on its image by Matt Taibbi of Rolling Stone. Former Bush propagandists will never lack for work in this climate. It’s remarkable how often apologists for Wall Street’s self-inflicted calamity mirror the apologists for Washington’s self- inflicted calamity of Iraq. In the case of that catastrophic war, its perpetrators and enablers almost always give the same alibi: “Everyone” was misled by the same “bad intelligence” about Saddam Hussein’s W.M.D. Hence, no one is to blame and no one could have prevented the rush to war. That, of course, is no more true than Greenspan’s claim that “everyone” was ignorant of the potentially catastrophic dangers in the securitization of subprime mortgages. There were dissenters in the press, intelligence agencies and Congress who did doubt the W.M.D. evidence and asked tough questions akin to those asked by financial apostates like Michael Burry during the housing bubble. But these dissenting voices were either ignored, ridiculed or censored in the feverish rally to war just as voices like Burry’s were marginalized in the feverish rally of the Dow. In the crash’s aftermath, those who created, sold and hyped mortgage-backed securities and exotic derivatives (“financial weapons of mass destruction,” as Warren Buffett called them) are just as eager to escape accountability as those who peddled Saddam’s nonexistent nukes. In an appearance at the 92nd Street Y in New York last month, the former Citigroup guru Robert Rubin floated the same talking points as Greenspan. He described Wall Street’s meltdown as “a crisis that virtually nobody saw coming,” citing regulators, auditors, analysts and commentators. It seems they were all the passive dupes of AAA ratings from Moody’s and Standard & Poor’s on toxic subprime assets, just as all those Iraq cheerleaders were innocently victimized by the bad C.I.A. intelligence on Saddam’s assets. No top player in the Bush administration has taken responsibility for his or her role in selling faulty intelligence products without exerting proper due diligence. There have been few unequivocal mea culpas from those who failed in their oversight roles during the housing bubble either — whether Greenspan, the Bush Treasury Secretary Henry Paulson or Timothy Geithner in his pre-Obama incarnation leading the New York Fed. In his own testimony before the Financial Crisis Inquiry Commission last week, Rubin took no responsibility for his record, as Clinton Treasury secretary, in opening the floodgates of deregulation that would fatten his wallet in his post-Washington migration to Citigroup. Nor did he own up to his role as a proselytizer for increased risk at that mammoth bank, where the bad bets would ultimately require a $45 billion taxpayers’ bailout. Rubin maintains that he had no significant operational responsibility as chairman of Citigroup’s executive committee — a role that paid him well over $100 million while there. But as Roger Lowenstein writes in his new book, “The End of Wall Street,” Rubin’s responsibilities did include writing a letter to shareholders in early 2007 for the Citigroup annual report. In sharp contrast to Jamie Dimon’s contemporaneous letter to shareholders at JPMorgan Chase — which darkly confronted potential “negative scenarios” from “recent industry excesses” — Rubin glossed over any gathering clouds. Last week Rubin testified he “deeply” regretted what happened, but his invocation of collective guilt — “we all bear responsibility” — deflected any accounting for his own individual actions. Even Blagojevich did better than this in his new role as a contestant on the reality show “Celebrity Apprentice.” When Donald Trump “fired” him a week ago, the former Illinois governor at last said, “I take full responsibility.”

66 Surveying America’s moral landscape in his Inaugural Address, Barack Obama called for “a new era of responsibility.” And he has tried to live up to his own creed. “I’m here on television saying I screwed up and that’s part of the era of responsibility,” he said after Tom Daschle withdrew as a cabinet nominee. The president has also taken responsibility for screw- ups ranging from his administration’s tardy discovery of bonuses given to bailed-out bankers at A.I.G. to its failed surveillance of the Christmas Day bomber. Though the president is never shy about attributing a $1.3 trillion annual deficit to his predecessor, he is usually quick to hold himself accountable as well for the $787 billion in deficit spending added by his stimulus package. Obama has been less forceful in stewarding a new era of responsibility when it comes to adjudicating unresolved misdeeds in the previous White House. “Turn the page” is his style, even if at times to a fault. Many of the Bush national security transgressions, including the manipulation of the case for war, are rapidly receding into history and America’s great memory hole. The president will not have the luxury of mass amnesia when it comes to the recent economic past. The tax-free Iraq war, as cunningly conceived by the Bush White House, directly affected only those American families whose sons and daughters volunteered to fight it. But the Great Recession has affected nearly everyone. Most of its victims are genuinely innocent bystanders who lost their jobs and savings while financial elites cashed in on the crash. Both as policy and politics, a serious reckoning for those who gamed the system is a win-win. Yet the fear that the Obama administration is protecting its friends persists. On the same morning that Rubin testified last week, Eamon Javers of Politico wrote about his continued influence on his many acolytes in the White House. That includes Geithner, whom Rubin talked with repeatedly in the weeks before the president released his financial regulatory reform proposal last June. Americans still waiting on Main Street for the recovery that lifted Wall Street once invested their hopes in Obama. Getting the new era of responsibility only 70 percent right won’t do. http://www.nytimes.com/2010/04/11/opinion/11rich.html?th=&emc=th&pagewanted=pr int

67 TRIBUNA: LUIS GARICANO Y JOHN VAN REENEN Sangre, sudor y lágrimas en Reino Unido Muy afectados por el estallido de una doble burbuja, la financiera y la inmobiliaria, y con un fuerte déficit público, los británicos tienen que apretarse el cinturón. El cómo es el elemento clave del debate electoral LUIS GARICANO Y JOHN VAN REENEN 10/04/2010 Tras el estallido de las burbujas inmobiliaria y financiera en 2007, Reino Unido se ha enfrentado a una situación de crisis similar a la de España. Sin embargo, la evolución de las magnitudes fundamentales (particular-mente el desempleo) así como el debate de política económica han sido muy diferentes en ambos países. Tanto las diferencias como las similitudes pueden contener lecciones útiles para España. Desde principios de 1990, la economía británica experimentó un crecimiento estable con suaves ciclos: el PIB creció de manera constante en torno al 3%, los precios de la vivienda crecieron a un promedio del 10%, y el desempleo se redujo del 10% al 5%. A mediados de 2007, estas tendencias se invirtieron repentinamente. Desde el verano del 2007, el PIB británico ha disminuido en un 4%, el desempleo ha aumentado al 8% y los precios de la vivienda han disminuido en un 15%. Existe un temor real de que gran parte de esta pérdida sea permanente, dado que, históricamente, las recesiones provocadas por crisis financieras han tendido a causar importantes efectos permanentes sobre el PIB. La crisis. A diferencia de la crisis en España, muy directamente relacionada con el sector de la construcción y sólo indirectamente relacionada con el sector financiero, el impacto directo de la crisis en el sector financiero ha sido importante en Reino Unido. El sector financiero empleaba aproximadamente al 20% de la fuerza laboral de Reino Unido y fue responsable de más del 50% de la creación de empleo desde 1995. La reasignación de los trabajadores del sector financiero a otros sectores será un proceso prolongado y complejo, como en España lo es la reasignación de recursos de la construcción a otros sectores. Un problema clave que dificulta la recuperación en España es la falta de ajuste de los precios en el mercado de trabajo y en el de la vivienda: la demanda cae, pero los precios no caen, y el mercado no se ajusta más que mediante desempleo y viviendas vacías. En Reino Unido, a pesar del impacto brutal de la caída del crecimiento económico, la pérdida de empleos ha sido mucho más reducida que en España: el Gobierno británico prevé que el desempleo alcanzará su máximo en torno al 8% en 2010. De forma similar, los precios de la vivienda se han estabilizado tras una fuerte caída. Los hogares, eso sí, se han quedado con activos reducidos para su jubilación: el patrimonio neto de los hogares se redujo entre 2007 y 2009 de 375.000 libras a 330.000 libras, es decir, lo equivalente a la pérdida de ingresos de más de un año. Como España, Reino Unido ha tenido un déficit comercial anual elevado durante los últimos 20 años. Cabría pensar que la flexibilidad del tipo de cambio ofrece una vía hacia el equilibrio que no existe en España, pero de momento no ha sido así. A pesar de que la libra se ha debilitado significativamente durante la crisis, el déficit comercial y por cuenta corriente están de nuevo en aumento tras una breve reducción inicial. El déficit. En cuanto al déficit público, la crisis ha abierto una brecha entre los ingresos y gastos de alrededor del 11% del PIB. Parte del déficit es cíclico, y se volverá a ajustar cuando la economía se recupere. Pero el déficit tiene un fuerte componente estructural, estimado entre el 7,8% y el 9%, uno de los más elevados del mundo. Como consecuencia se está produciendo

68 un aumento importante de la deuda pública, que ha subido del 40% del PIB a previsiones por encima del 75% del PIB en 2014. ¿Sufrirá Reino Unido una crisis de deuda similar a la que está sufriendo Grecia? La respuesta depende de cómo los mercados financieros perciban la credibilidad futura de Reino Unido. De momento, parecen bastante optimistas: los diferenciales entre los tipos de interés de los bonos de Reino Unido y los de Estados Unidos o Alemania son muy reducidos. Otro factor favorable a Reino Unido es que, a diferencia de Grecia y España, la deuda existente está financiada a muy largo plazo, lo que evita tener que acudir al mercado continuamente a refinanciar: sólo el 18% es a menos de cinco años. Eso sí, las expectativas de inflación han aumentado y actualmente se sitúan en cerca de 3,5%. En cualquier caso, la salida de una situación de déficit tan prolongada será dramática: el Fondo Monetario Internacional (FMI) estima que el Gobierno británico deberá mantener superávits presupuestarios estructurales del 5% durante la década de 2020 para que la deuda pública caiga hasta el 60% del PIB. Esto requeriría un ajuste de 12,8 puntos porcentuales en el déficit estructural como proporción del PIB en la próxima década, uno de los mayores ajustes fiscales en la historia reciente, mayor que el que llevó a cabo Margaret Thatcher. El debate político. De cara a las elecciones, tanto laboristas como conservadores han adoptado una retórica dura de reducción del gasto público. Aunque ambos han presentado algunas medidas concretas, ninguno ha presentado un plan integral para abordar los problemas del déficit estructural, que probablemente será la tarea central en la agenda de la política económica del próximo Ejecutivo. El actual Gobierno laborista anunció planes a largo plazo en el presupuesto de 2009 para reducir el déficit mediante una reducción a la mitad de las inversiones entre 2009 y 2012, una caída de los gastos generales en un 2% al año a partir de abril de 2011 (en comparación con el crecimiento histórico de alrededor del 4%) y la introducción de un tipo marginal (a partir de las 150.000 libras de ingresos) del 50% en el impuesto sobre la renta. También ha anunciado una congelación parcial de los salarios públicos. Los conservadores, por su parte, han propuesto un año de congelación de sueldos públicos en 2011, la suspensión de créditos fiscales a las familias con ingresos superiores a 50.000 libras y la reducción del subsidio infantil, con el objetivo último de lograr el equilibrio presupuestario estructural actual al final del horizonte de pronóstico (2015-2016). El debate también incluye varias reformas estructurales. Ambos partidos apoyan las reformas de las pensiones introducidas por la comisión Turner, nombrada por el Gobierno de Blair en 2004, que propuso aumentar la edad de jubilación de las mujeres a 65 años en 2020 y aumentar la edad de jubilación de ambos sexos a 66 en 2026. Los conservadores plantean adelantar la fecha en que la edad de jubilación del Estado comienza a elevarse a 66, al 2016 para los hombres y el 2020 para las mujeres. Además, ambos partidos han propuesto cambios institucionales que podrían ayudar a reducir los déficits en el futuro. El partido laborista prefiere un enfoque basado en las reglas fiscales, mientras que los conservadores han propuesto la introducción de una nueva institución: un Consejo de Responsabilidad Fiscal que produciría previsiones presupuestarias a medio plazo y evaluaría la sostenibilidad a largo plazo de las finanzas públicas. El futuro. Hay signos iniciales de que empieza la recuperación de la profunda recesión de los últimos dos años. Sin embargo, la recuperación será lenta y todavía no hay señal de cambios en el déficit en cuenta corriente que Reino Unido ha desarrollado durante las últimas dos décadas. La compleja situación internacional, la incertidumbre en el sector financiero, y las consecuencias de una reducción brutal del gasto público configuran una situación en la que el

69 panorama para Reino Unido continúa caracterizado por un alto grado de incertidumbre. Pero el mejor funcionamiento del mercado de trabajo y de la vivienda que en España, el mayor consenso político, sobre todo sobre la necesidad de consolidación fiscal, y el hecho de que el problema de las pensiones se haya resuelto ya favorecen una salida de la crisis más clara e inmediata que en España. http://www.elpais.com/articulo/opinion/Sangre/sudor/lagrimas/Reino/Unido/elpepuopi/2 0100410elpepiopi_13/Tes

Los grandes bancos de EE UU recurren a tretas legales para camuflar su deuda

La Reserva Federal detecta que entidades como Goldman, Morgan Stanley o Bank of America han enmascarado sus riesgos el último año y medio EL PAÍS | AGENCIAS - Nueva York - 09/04/2010 Los principales bancos de EE UU enmascararon sus niveles de riesgo en los últimos cinco trimestres al rebajar temporalmente su endeudamiento justo antes de publicar sus cuentas, según los datos de la Reserva Federal de Nueva York recogidos por el diario The Wall Street Journal. En concreto, el periódico apunta que un grupo de 18 entidades entre las que se cuentan Goldman Sachs Group, Morgan Stanley, JP Morgan Chase, Bank of America y Citigroup, subestimaron los niveles de deuda empleados en la financiación de sus compras de valores al rebajarlos una media del 42% al final de todos y cada uno de los últimos cinco trimestres, cuando informaban al público de sus niveles de deuda, incrementándolos hacia la mitad de los trimestres. "Esta práctica, aunque legal, puede ofrecer a los inversores una visión distorsionada del nivel de riesgo que las firmas financieras asumen durante la mayor parte del tiempo", afirma el rotativo. El endeudamiento excesivo de los bancos fue una de las causas fundamentales de la crisis financiera que hizo tambalearse al sector en 2008 y provocó el rescate de Bear Stearns y el colapso de Lehman Brothers, lo que ha motivado que las entidades sean muy sensibles a la hora de informar de un elevado nivel de deuda ante el temor de que estos datos puedan castigar a sus acciones. "Mejor aspecto al finalizar el trimestre" "Quieres que tu apalancamiento tenga un mejor aspecto al finalizar el trimestre de lo que de hecho tiene para sugerir que asumes menos riesgos", reconoce William Tanona, ex analista de Goldman y actual responsable de análisis financiero del banco de inversión británico Collins Stewart. Así, el rotativo señala que en privado varias entidades admitieron la reducción temporal de su endeudamiento de cara a los finales de trimestre, mientras que representantes de Goldman, Morgan Stanley, JP Morgan y Citigroup declinaron comentar los datos de la Fed de Nueva York, aunque varios precisaron que sus informes incluyen expresiones indicativas de que los niveles de deuda pueden fluctuar durante el trimestre.

70 Por su parte, un funcionario de la Fed ha subrayado que el banco central vigila constantemente los niveles de activos en las principales entidades, pero ha advertido de que las actividades financieras recogidas en dichos datos se enmarcan en el ámbito de supervisión de la Comisión del Mercado de Valores (SEC). En este sentido, el diario apunta que la SEC está investigando las operaciones de venta y recompra (repos) de unas 24 grandes firmas financieras en un intento de descubrir si las entidades emplean argucias contables para ocultar los riesgos después de que se conociera que Lehman utilizó estas operaciones para disimular unos 50.000 millones de dólares (37.280 millones de euros) en deuda antes de su quiebra en septiembre de 2008. http://www.elpais.com/articulo/economia/grandes/bancos/EE/UU/recurren/tretas/legales/cam uflar/deuda/elpepueco/20100409elpepueco_3/Tes

Anuncio del Bank of America en la neoyorquina Times Square- AP

71 COLUMNISTS Singapore’s lesson from Harvard model By Gillian Tett Published: April 8 2010 18:20 | Last updated: April 8 2010 18:20 The doughty Government Investment Corporation of Singapore is not often a hotbed of heretical thought. Recently, however, a debate has been bubbling at the GIC that has fascinating implications for investors round the world. The issue at stake revolves around the so-called Harvard or Yale investment model. During most of its recent history, the GIC – like many other sovereign wealth funds round the world – has looked at these huge university endowment funds with envy and admiration. For the Harvard or Yale model seemed to offer an exciting vision for any long-term investment group that wanted to do more than act like a stodgy, old-fashioned pension fund. After all, for 20 years, groups such as Yale earned solid returns, by pioneering a distinctive investment style. This essentially championed the idea of diversifying into illiquid and alternative asset classes, such as private equity, alongside mainstream securities. In depth: Sovereign wealth funds - Nov-26 Seoul sovereign fund eyes private equity alternatives - Apr-04 Central banks woo sovereign funds over debt - Mar-22 Abu Dhabi fund to take Gatwick stake - Feb-04 Beijing seen to be tempted to board the Athens express - Jan-27 Chinese fund to receive new capital - Dec-20 But these days, the names of Harvard and Yale – like so many American financial brands – are looking somewhat tarnished in places such as Asia. Or as Tony Tan, deputy chairman of the GIC explains: “The whole idea of the endowment model has been very influential [before]. But any reasonable investor would [now] want to take another look at this.” Or, more specifically, about whether to copy it. That is partly down to the numbers. In the year to June 2009, the value of the assets held in the Harvard and Yale endowment funds fell by over 25 per cent. Meanwhile, across all US colleges, the average loss was 23 per cent (a pattern similar to the GIC, which saw losses of 20 per cent in the year to March 2009). Supporters of the Harvard approach insist that these declines are likely to be partly reversed in the coming years. Moreover, precisely because the losses were so widespread, some investment managers are apt to shrug them off, as a force of nature. But the fact is that not everybody suffered quite the same way; at the Oxford University endowment fund, for example, losses in the year to June 2009 were “only” 10 per cent. And that, according to Sandra Robertson, head of this fund, is because Oxford deliberately decided a few years ago that it would not try to emulate Harvard. But the sense of tarnish – or unease – goes beyond the losses. After recently scrutinising their performance data, some GIC executives are starting to conclude that their own in-house managers have performed as well, if not better, than external managers in recent years. That leaves them asking a question that used to seem heretical: namely why does anyone ever bother to pay such hefty fees to, say, hedge funds or private equity?

72 More important still is the issue of liquidity risk. Until 2007, the GIC tended to assume that it would never need to engage in asset firesales or unseemly investment exits. After all, the whole point of a sovereign wealth fund (or endowment fund) is that it is supposed to take a long-term perspective, which should enable it to ride out any temporary storms. However, in the past two years, sovereign funds discovered that the long-term mantra provides far less protection than previously thought. For by investing in private equity and hedge funds, the GIC (and others) ended up being exposed to the vagaries of their co- investors – and some of those had short-term horizons, or mark-to-market triggers. Thus what hurt groups such as the GIC was not just the issue of asset correlation, but a contagion of investor style as well. That raises some big questions about how the GIC (and others) should conduct themselves. Should they only co-invest with similar investors in the future? Could they now demand detailed lists of their co-investors (even if they hate providing such data themselves)? Could they ask to be paid for assuming illiquidity risk? Or should they dump external managers altogether, and bring that activity “in-house”? Frankly, it is still unclear where this debate will end since, at groups such as the GIC, it is still at an early stage. Moreover, as Mr Tan admits, there has been little intellectual work done on this liquidity issue before, and most Asian funds have limited experience in trying to forge radical new ground. Instead, they have generally spent recent decades trying to follow a US model, to some degree (not least because many Asian investment officials have degrees from ... er ... Harvard or Yale). But in a world where more wealth is moving to the emerging markets – and away from America – the question of where the future intellectual leadership for the investment business will be found is becoming ever more fascinating. Investors should keep watching what the GIC does next, not to mention its other – less vocal – brethren in places such as China. http://www.ft.com/cms/s/0/edccd72a-432e-11df-9046-00144feab49a.html

COLUMNISTS Now Obama is president with an endgame By Philip Stephens Published: April 8 2010 22:32 | Last updated: April 8 2010 22:32

So he’s not Jimmy Carter after all. Barack Obama was in Prague this week to sign a strategic arms treaty with Russia’s Dmitry Medvedev. Next week the US president plays host to 50 world leaders to discuss strengthening arrangements for nuclear security. In between times, he published a new military strategy that significantly narrows the circumstances in which the US would use its nuclear arsenal.

73 Opinion: Iraq needs help to avoid a sectarian resurgence - Apr-08 Republican mid-term win ‘nightmare’ for Frum - Apr-08 Video: David Frum on the Republican party - Apr-08 In depth: The Obama presidency - Jan-22 Republicans unite in anger against reforms - Mar-23 Obama victory sets battle lines for polls - Mar-22 Mr Obama, in other words, looks like a leader pretty much in command of his agenda. These three events mark an important way station on a route he mapped during a speech in the Czech capital a year ago. We are still light years away from the nuclear-free world he mentioned then. But we have stopped heading in the wrong direction. The latest initiatives have restored momentum to multilateral arms reduction. The collapse of the Nuclear Non- Proliferation Treaty does not look quite so inevitable. This takes Mr Obama some distance from the commonplace caricatures of only a couple of months ago. Then, even sympathetic observers were drawing baleful comparisons with the foreign policy calamities of Mr Carter’s presidency. Mr Obama, the argument ran, had spent his first year making speeches about restoring American prestige. He looked destined to spend his second explaining why he had failed. The president’s deliberative style jarred with the impatience of a modern political culture shaped by 24-hour rolling news. Hadn’t he promised to pursue peace in the Middle East and to persuade the Iranians to see reason? But the Israelis and Palestinians were no closer to a deal, and Tehran was still building the bomb. For a growing band of critics, engagement looked suspiciously like appeasement. The perception of failure was always premature. Along with the impatience, it reflected an unrealistic belief that the world’s most powerful nation can always get its own way. If that was ever true, it certainly does not hold in an era when new powers are contesting US primacy. Foreign policy challenges – whether Iran’s nuclear ambitions, the war in Afghanistan or the Arab-Israeli conflict – cannot all be “fixed”. Some have to be managed. That is why George Kennan invented something called containment to frame US policy during the cold war. Bilateral relationships with rival powers – whether Russia or China – will always be bumpy. The turning point for Mr Obama came with the passage of healthcare legislation. No one could ever accuse commentators of consistency: a beleaguered leader overnight became a titan who had achieved something that had eluded his most illustrious predecessors. These things rub off. It is hard to say with certainty whether Hu Jintao, China’s president, would have agreed to attend next week’s Washington summit had Mr Obama still been fighting in the Congressional trenches. My diplomat friends say probably not. Either way, the perception that he has rebuilt his political authority at home means that he is being taken more seriously abroad. Mr Obama has been helped too by signs that the US economy will emerge quite strongly from the global recession. The Democrats still look set to lose ground in the mid-term elections but the meltdown predicted only weeks ago is no longer a certainty. On the president’s part, the manner of the health victory suggested a grit that had earlier been absent. As one shrewd Washingtonian told me, Mr Obama stopped behaving like a prime minister and acted instead like a president. Success in politics begets success. But foolish as it was to write him off a few weeks ago, it would be equally mistaken to imagine all is plain sailing from now on in. The president’s

74 foreign policy insight had been that the US is the vital but insufficient power in safeguarding global security. That means it will often have to compromise. Last July I likened Mr Obama to a chess master playing several games simultaneously. Instead of taking foreign policy challenges sequentially, he had made the opening moves in all the important games. Since then the metaphor has gained currency, and it remains a good description of his approach. Each of the games, though, is proving tougher than he imagined. The White House has belatedly told Israel’s Benjamin Netanyahu that a halt to settlement building on occupied Palestinian land is a necessary condition for negotiations about a two- state solution. But that in itself does not guarantee progress, not least because the Palestinians have yet to show they are serious about a settlement. If Mr Obama wants to give himself a real shot at brokering a peace deal he will have to present his own proposals as the basis for talks. Somehow – and this is a really tough one politically – he will also have to find a way to draw the Palestinian Hamas movement into the process. Likewise, the recent antics of Hamid Karzai, the Afghan president, have underscored how difficult it will be to secure even a draw in the contest against the Taliban. Political paralysis in Baghdad puts in jeopardy the timetable for the withdrawal of US troops from Iraq. I could go on. Russia’s signature on a new Start treaty will not dampen its ambitions to re- establish its influence over the former Soviet space. The thaw in relations with China may prove as short-lived as the freeze that preceded it. Then there is Iran. The other challenges can be managed, albeit with difficulty. If necessary, Mr Obama can play for a draw. Tehran’s nuclear ambitions take him on to more perilous territory – both in terms of America’s strategic position and of the domestic fall-out were Iran to get the bomb. This is the game with the highest stakes, and, on present form, it is one Mr Obama could well lose. Elsewhere, the president could do more to help himself. Infuriating though they are, Europeans come fairly cheap as allies: they basically want to be told that they are wanted. Mr Obama should also pay closer attention to Japan – a vital strategic ally that, like the US itself, is trying to come to terms with China’s rise. By shaking off analogies with Mr Carter, Mr Obama has made life easier for himself; it does not mean he can wish away the world’s problems. Having an endgame – in chess or foreign policy – is no guarantee of success. On the other hand, it is a pretty useful start. http://www.ft.com/cms/s/0/06f11ad2-4342-11df-9046-00144feab49a.html

75

Bernanke says policymakers prevented 'cataclysm' worse than Great Depression By Neil Irwin Friday, April 9, 2010; A15 The world's economic policymakers successfully learned the lessons of the Great Depression, helping to avert a horrendous economic outcome from the 2008 financial crisis, Federal Reserve Chairman Ben S. Bernanke said Thursday. In a speech that drew on his academic specialty -- the economic history of the 1930s -- Bernanke sought to give some historical perspective to efforts by the Fed and other policymakers to combat the 21st century economic downturn. During the 1930s, policymakers' responses to the financial collapse "ran the gamut from passivity to timidity," standing by as banks failed by the hundreds. "They were insufficiently willing to challenge the orthodoxies of their day," Bernanke said in an address after receiving an award from the Center for the Study of the Presidency and Congress. His historical argument was mounted as a defense of the forceful -- and frequently controversial -- actions that the Fed took under his leadership to combat the crisis. Bernanke said that had he and other economic policymakers not moved so aggressively, the downturn could have been even worse than the Depression, when unemployment was 25 percent. "In the current episode, in contrast to the 1930s, policymakers around the world worked assiduously to stabilize the financial system," he said. "As a result, although the economic consequences of the financial crisis have been painfully severe, the world was spared an even worse cataclysm that could have rivaled or surpassed the Great Depression." In his speech, Bernanke drew parallels between the actions the Fed took and the "bold experimentation" that followed the inauguration of Franklin D. Roosevelt. For example, in 1933 the Roosevelt administration shut down banks in a "national bank holiday," sending in examiners to evaluate their finances, then declaring those that were allowed to reopen as being sound. Bernanke argued that such policy is not that different from the Fed's "stress tests" of major banks last year, in which bank examiners analyzed the finances of the largest banks and ordered them to raise more money if they appeared unable to survive in a worse-than-expected economy. "Critics had warned that the stress test could backfire, but as it turned out, the release of the results last May helped restore confidence in banks, and many institutions have since been able to raise capital from investors and repay the capital the government had injected," he said. Separately, Fed Vice Chairman Donald L. Kohn said Thursday that a "moderate" economic recovery is underway and that the uncertainty around the economy has dissipated in recent months. "The economy appears to be moving in the right direction, though not as quickly as we all would like," Kohn said in a speech in San Francisco. The fact that conditions have evolved as

76 he and other forecasters had expected last fall "suggests that the future may, just may, be a bit less uncertain than before," he said. Noting the nation's continued high unemployment rate, Kohn said that given subdued inflation pressures, the Fed should keep its policy of ultra-low interest rates in place for some time to boost hiring and economic activity. He added, however, that interest rate hikes will come before the U.S. unemployment rate has dropped to normal levels, given the lags in the working of monetary policy. The Fed will "want to be sure that we haven't left highly accommodative policy in place so long that economic and financial conditions become conducive to future inflation," Kohn said. Given that monetary policy takes effect slowly, "that means we will not be able to wait until the unemployment rate is down close to its long-term level." http://www.washingtonpost.com/wp- dyn/content/article/2010/04/08/AR2010040805464.html?wpisrc=nl_headline

77 Opinion April 9, 2010 OP-ED COLUMNIST Learning From Greece By PAUL KRUGMAN The debt crisis in Greece is approaching the point of no return. As prospects for a rescue plan seem to be fading, largely thanks to German obduracy, nervous investors have driven interest rates on Greek government bonds sky-high, sharply raising the country’s borrowing costs. This will push Greece even deeper into debt, further undermining confidence. At this point it’s hard to see how the nation can escape from this death spiral into default. It’s a terrible story, and clearly an object lesson for the rest of us. But an object lesson in what, exactly? Yes, Greece is paying the price for past fiscal irresponsibility. Yet that’s by no means the whole story. The Greek tragedy also illustrates the extreme danger posed by a deflationary monetary policy. And that’s a lesson one hopes American policy makers will take to heart. The key thing to understand about Greece’s predicament is that it’s not just a matter of excessive debt. Greece’s public debt, at 113 percent of G.D.P., is indeed high, but other countries have dealt with similar levels of debt without crisis. For example, in 1946, the United States, having just emerged from World War II, had federal debt equal to 122 percent of G.D.P. Yet investors were relaxed, and rightly so: Over the next decade the ratio of U.S. debt to G.D.P. was cut nearly in half, easing any concerns people might have had about our ability to pay what we owed. And debt as a percentage of G.D.P. continued to fall in the decades that followed, hitting a low of 33 percent in 1981. So how did the U.S. government manage to pay off its wartime debt? Actually, it didn’t. At the end of 1946, the federal government owed $271 billion; by the end of 1956 that figure had risen slightly, to $274 billion. The ratio of debt to G.D.P. fell not because debt went down, but because G.D.P. went up, roughly doubling in dollar terms over the course of a decade. The rise in G.D.P. in dollar terms was almost equally the result of economic growth and inflation, with both real G.D.P. and the overall level of prices rising about 40 percent from 1946 to 1956. Unfortunately, Greece can’t expect a similar performance. Why? Because of the euro. Until recently, being a member of the euro zone seemed like a good thing for Greece, bringing with it cheap loans and large inflows of capital. But those capital inflows also led to inflation — and when the music stopped, Greece found itself with costs and prices way out of line with Europe’s big economies. Over time, Greek prices will have to come back down. And that means that unlike postwar America, which inflated away part of its debt, Greece will see its debt burden worsened by deflation. That’s not all. Deflation is a painful process, which invariably takes a toll on growth and employment. So Greece won’t grow its way out of debt. On the contrary, it will have to deal with its debt in the face of an economy that’s stagnant at best. So the only way Greece could tame its debt problem would be with savage spending cuts and tax increases, measures that would themselves worsen the unemployment rate. No wonder, then, that bond markets are losing confidence, and pushing the situation to the brink.

78 What can be done? The hope was that other European countries would strike a deal, guaranteeing Greek debt in return for a commitment to harsh fiscal austerity. That might have worked. But without German support, such a deal won’t happen. Greece could alleviate some of its problems by leaving the euro, and devaluing. But it’s hard to see how Greece could do that without triggering a catastrophic run on its banking system. Indeed, worried depositors have already begun pulling cash out of Greek banks. There are no good answers here — actually, no nonterrible answers. But what are the lessons for America? Of course, we should be fiscally responsible. What that means, however, is taking on the big long-term issues, above all health costs — not grandstanding and penny-pinching over short-term spending to help a distressed economy. Equally important, however, we need to steer clear of deflation, or even excessively low inflation. Unlike Greece, we’re not stuck with someone else’s currency. But as Japan has demonstrated, even countries with their own currencies can get stuck in a deflationary trap. What worries me most about the U.S. situation right now is the rising clamor from inflation hawks, who want the Fed to raise rates (and the federal government to pull back from stimulus) even though employment has barely started to recover. If they get their way, they’ll perpetuate mass unemployment. But that’s not all. America’s public debt will be manageable if we eventually return to vigorous growth and moderate inflation. But if the tight-money people prevail, that won’t happen — and all bets will be off. http://www.nytimes.com/2010/04/09/opinion/09krugman.html?th&emc=th

April 8, 2010, 5:09 pm Lucky Ducky Redux So the right is now apparently outraged at the fact that many Americans pay no income taxes — a true observation that is elided into the utterly untrue assertion that many Americans pay no taxes. (Almost everyone pays payroll taxes, everyone pays state and local sales taxes, etc.) This isn’t new; remember the famous WSJ editorial about the lucky duckies who have the great good fortune to not pay income taxes because they’re, um, too poor to be above the minimum. I guess luck is in the eye of the beholder. The thing to bear in mind is that overall, the US tax system isn’t actually that progressive: the payroll tax is regressive, as are most state and local taxes, which largely offsets the progressivity of the income tax. So the right likes to pretend that the income tax is the only tax; it isn’t. http://krugman.blogs.nytimes.com/2010/04/08/lucky-ducky-redux/

79 April 8, 2010, 4:58 pm Fiscal Fantasies David Frum is startled by Larry Kudlow’s ignorance about the federal budget; Kudlow imagines that a pay cut for federal employees could have a huge impact on the deficit, when in fact it would be trivial. Two things: it should have been obvious on general principles that Kudlow was talking nonsense. The basic picture of the federal government you should have in mind is that it’s essentially a huge insurance company with an army; Social Security, Medicare, Medicaid — all of which spend the great bulk of their funds on making payments, not on administration — plus defense are the big items. Salaries aren’t. But the Kudlow picture is nonetheless a key part of conservative imagery; the idea of vast rooms full of government employees doing nothing productive is central to their vision of painless spending cuts. The fact that it’s not remotely true is irrelevant; they want it to be true, and that’s enough. http://krugman.blogs.nytimes.com/2010/04/08/fiscal-fantasies/ April 8, 2010, 4:51 pm Show Me The Money Actually, show me the numbers. I won’t pass judgment on the apparent agreement about the renminbi until I get some sense of what magnitude of adjustment we’re talking about here. I fear that it will be cosmetic — a tiny rise and bit of flexibility, just to silence the Obama administration for a while. But let’s hope I’m wrong. Oh, and just to add: the US very much has the upper hand here — the only question is whether it’s willing to use it. http://krugman.blogs.nytimes.com/2010/04/08/show-me-the- money-2/ April 7, 2010, 4:39 pm Birds And Bees Blogging There have been many stories about the decline of the birth rate in 2008, with almost all attributing it to the recession. But James Trussell raises an interesting point: doesn’t it take nine months from conception to birth? Abortion aside, to reduce births in the first three quarters of 2008 in response to a recession that started in Dec. 2007 would have taken pretty impressive rational expectations. What are we missing?

April 7, 2010, 4:30 pm Austrian Followup As predicted, many of the comments to my Austrian economics post are of the form “Well, of course employment rises when investment is expanding, and falls when the investment is falling — in the first case the economy is booming while in the second it’s slumping.” As I tried to explain, however, that’s assuming the conclusion; there’s no “of course” about it. Why do periods when the economy is investing more correspond to booms, while periods when it’s investing less correspond to slumps? That’s easy to understand in Keynesian terms

80 — but the whole Austrian claim is that they’re an alternative to Keynesianism. Yet I have never seen a clear explanation of this central point. What happens, instead — or at least that’s how I read it — is that Austrians slip Keynesianism in through the back door. Implicitly, they associate booms and slumps with rising or falling aggregate demand — utterly unaware that their own theory doesn’t actually make room for such a thing as aggregate demand to exist, or at least to affect overall employment. So Austrians are basically Keynesians in denial — self-hating Keynesians? — pretending to themselves that they’re not using ideas that are in fact essential to their story.

April 7, 2010, 4:20 pm More On The Exchange Rate And The Trade Balance A bit more on the fallacy — which both Steve Roach and, I’m a bit shocked to say, Joe Stiglitz — have fallen into: the belief that appreciating the renminbi can’t reduce the US trade deficit unless US savings increase.

As Brad DeLong says, this is one-equation economics — and what it misses is the fact that savings are not a given, but depend among other things on the level of GDP, which is affected by the trade balance. Here’s one way to think about it: the argument that a rise in the renminbi can’t improve the US trade balance, because US savings are fixed, is, if you think about it, the same as the argument that a temporary increase in government spending can’t raise output and employment, because savings equal investment and therefore investment must fall by the same amount. And it’s wrong for the same reason: if we export more and import less at any given level of GDP, GDP will rise, and so will total savings — partly because the private sector has more income, partly because the public deficit falls. Once upon a time, students used to learn something like the following diagram, which is drawn on the assumption that the interest rate is held fixed. The accounting identity is savings minus investment equals exports minus imports, S-I = X-M. Both sides of the identity, however, depend on GDP: higher GDP means more imports and also more savings (where savings include the effects of the government deficit): Equilibrium is where the lines cross. A depreciation of the dollar /appreciation of the renminbi shifts that X-M line up — and it increases both the trade balance and GDP. Guys, this isn’t hard; it used to be material for sophomore courses at most. It’s really sad to see so many people who should know better getting it wrong. http://krugman.blogs.nytimes.com/2010/04/07/more-on-the-exchange-rate-and-the-trade- balance/

81 April 7, 2010, 8:46 am Martin And The Austrians Martin Wolf asks for a discussion of Austrian economics. My view is that the fatal flaw in Austrian economics is that it can’t explain unemployment — or, worse, that it thinks that it can explain unemployment, but is deluding itself. The Austrian view is that unemployment in a slump results from the difficulty of “adaptation of the structure of production” — workers are unemployed as resources are painfully transferred out of an overblown investment-goods sector back into production of consumption goods. But this immediately raises the question, why isn’t there similar unemployment during the boom, as workers are transferred into investment goods production? I’ve asked this question repeatedly over the years, and all I get is one of two things: gobbledygook, or “but during the phase of rising investment, the economy is booming!”, which is of course circular. In practice, Austrians seem to be Keynesians during booms without knowing it; they realize that high demand produces a boom, but don’t realize that this contradicts their own theory of slumps. And the key to all this, I believe, is that the Austrian abhorrence of explicit models, even for the purposes of clarifying thought, leaves them unaware of the holes in their account. April 6, 2010, 7:59 pm Immaculate Transfer Strikes Again Oh, dear. Via Mark Thoma, I see that Joe Stiglitz has fallen victim to the doctrine of immaculate transfer: Many factors other than exchange rates affect a country’s trade balance. A key determinant is national savings. America’s multilateral trade deficit will not be significantly narrowed until America saves significantly more … OK, first of all: right now we’re up against the zero lower bound, with a depressed economy. Under these conditions, if a rise in the renminbi made US exports more competitive, the US trade deficit would fall. Yes, this would have to be matched by a rise in saving — but that rise would happen precisely because the trade improvement would lead to economic expansion, raising private incomes (with some of the increased income saved) and to rising government revenues, reducing the deficit. But what really gets me is that Joe is thinking of savings as an independent determinant of the trade balance. I tried to clear this up 23 years ago; here we go again. Imagine that US savings rise and China’s savings fall, holding the exchange rate constant. Does this painlessly reduce the US trade deficit? No, it doesn’t. Most of the fall in US demand is a reduction in demand for US-produced goods and services; most of the rise in Chinese demand is a rise in demand for Chinese- produced goods and services. So the net effect is to raise unemployment here and create inflationary pressures there — unless something shifts demand from Chinese to US goods. And that something should be the exchange rate. Believing otherwise — believing that shifting savings somehow obviates the need for exchange rate adjustment — is what John Williamson, long ago, dubbed the doctrine of immaculate transfer. It’s a seductive fallacy, but it is indeed a fallacy. http://krugman.blogs.nytimes.com/2010/04/06/immaculate-transfer-strikes-again/

82 April 6, 2010, 7:42 pm They Can’t Imagine Jonathan Chait seems puzzled by a Michael Barone column in which Barone can’t imagine that a key part of the Obama stimulus plan, aid to state governments, had any purpose other than to reward unionized government workers. Chait’s puzzlement made me think of Ezra Klein’s somewhat similar puzzlement over a column by Shelby Steele, in which Steele attributed Obama’s push for health care reform to “grandiosity” and “narcissism” — never once mentioning that Obama might have, well, wanted to cover the uninsured. I think these commentaries are revealing of two things. One is the closing of the conservative mind. I’d like to think that I have a reasonably good understanding of conservative economic doctrine and conservative views on health care; I disagree, but I do know what they have been saying in recent years. Barone and Steele, by contrast, act as if utterly unaware of what people like me, or the president, have been saying and writing: no idea that standard textbook economics says that you should sustain government spending in a recession, no idea that liberals have been trying to get universal health insurance for three generations. The other thing is the way incomprehension becomes demonization. Because conservatives don’t understand at all what the other side believes, everything becomes a conspiracy theory: Obama must be indulging his grotesque ambition, because who could possibly believe that doing what he did is a good idea? Every time someone talks about reaching across the partisan divide, remember this: one side literally can’t understand what the other wants. April 5, 2010, 1:04 pm Me And The Bubble Some readers have asked for evidence that I saw the housing bubble; others are using that out- of-context remark about the Fed “needing” to create a housing bubble. So some backward looks: I was warning about a housing bubble through much of 2005; the big piece was That Hissing Sound, where I argued that you needed to differentiate between regions to see the bubble’s full extent. Oh, and the usual suspects slammed me for that column, basically arguing that it reflected nothing but Bush-hatred. So did I call for a bubble? The quote comes from this 2002 piece, in which I was pessimistic about the Fed’s ability to generate a sustained economy. If you read it in context, you’ll see that I wasn’t calling for a bubble — I was talking about the limits to the Fed’s powers, saying that the only way Greenspan could achieve recovery would be if he were able to create a new bubble, which is NOT the same thing as saying that this was a good idea. Of course, I know that this explanation won’t keep the haters from pulling up the same quote out of context, over and over. But did I call for low interest rates? Yes. In my view, that’s not what the Fed did wrong. We needed better regulation to curb the bubble — not a policy that sacrificed output and employment in order to limit irrational exuberance. You can disagree if you like, but that doesn’t make me someone who deliberately sought a bubble. Anyway, just for the record. Update: The link for the 2002 piece seems to be broken — and it’s not because the url is wrong. Something with the Times website. Here’s a copy. … and now it seems to be back. Wuh?

83 Grasping Reality with Our Minions, Our Machines, and Our Mental Powers The Semi-Daily Journal of Economist J. Bradford DeLong: Fair, Balanced, Reality-Based, and Mulish April 07, 2010 Hoisted from the Archives from January 2007: In Condemnation of One-Equation Economics In Condemnation of One-Equation Economics: I really don't like one-equation economics. One-equation economics assumes that certain economic quantities are fixed in stone, examines one equation --usually an accounting identity-- and concludes that somebody else's preferred policies will be ineffective and counterproductive. It does so by ignoring the fact that one of the aims or effects of the somebody else's policies will be to change the values of the economic quantities that are --by assumption and only by assumption-- claimed to be fixed in stone. Here's Stanford's Michael Spence. The one equation is the international savings-investment identity. The quantities assumed fixed are domestic saving and investment: We Are All in It Together - WSJ.com: [I]t would be useful if we stopped pretending or alleging that China's exchange-rate policies are the root cause of our trade deficit. If our savings rate is stubbornly stuck below our investment rate, and if China does allow its currency to revalue over time, then we will simply run a deficit with another collection of countries, and from a domestic point of view, nothing much will have changed. Except that we won't have this subject to discuss with China anymore. "If our savings rate is stubbornly stuck below our investment rate." If. If. If. As Michael Mussa likes to say in these circumstances: if my grandmother had wheels, she would be a bus. If China's central bank ceases buying its $200 billion a year of dollar denominated assets, and if nothing shocks the behavior of other central bank or collection of private foreigners, two things will happen: (1) the value of the value of the dollar will fall, and (2) U.S. interest rates will rise. The fall in the value of the dollar will boost U.S. exports and diminish U.S. imports, and the trade deficit will shrink. And--as long as the Federal Reserve is successful in avoiding recession--the rise in interest rates will reduce investment inside the United States and also lower asset values, which will make homeowners and investors feel poorer and increase their savings. It will thus reduce the gap between savings and investment, and so diminish the capital inflow. Only if investment is stubbornly unresponsive to changes in the price of hiring capital and if savings is stubbornly unresponsive to housing and financial market wealth will Spence's "if" be true. But does Spence argue that investment is unresponsive? Does he argue that savings are unresponsive? Does he argue that there will be some other shock to the economy--that, for example, the Federal Reserve will fail to maintain full employment and thus that savings will fall because of recessions? No. He says "if." And he only says "if."

84 Now Mike Spence might argue that the Wall Street Journal does not give him much space, and that even if the Wall Street Journal gave him more space his readers would not give him more time. He might argue that he has to compress and simplify his argument: make it "clearer than truth." He might say that he is not a philosopher discoursing to fellow philosophers walking outside in the sunlight, but rather addressing the ignorant chained in the underground cave, and that it is his job to cast shadows on the wall that will lead those chained underground to support the policies they would support if they could understand the issues, if they were philosophers strolling in the sunlight. And, Spence might say, it is his job to use whatever means are necessary to keep his readers from supporting destructive policies. He has to cast a shadow on the wall of the cave to get them thinking that tariffs and quotas on imports from China are not a way to reduce America's trade deficit and boost overall fand manufacturing employment. Point taken: whatever effects (and there would be some) tariffs and quotas on imports from China would have on the level and distribution of employment in the U.S. would be accompanied by much more destructive blowback consequences. Tariffs and and quotas on imports from China are not a good idea. Getting China to boost consumption and domestic absorption would be a good idea. Closing the U.S. budget deficit would be a good idea. Boosting U.S. private savings would be a good idea. But doing none of those and doing tariffs and quotas instead? Not a good idea. However, lowering the level of the debate by asserting that the Chinese government's purchase of $200 billion a year of dollar-denominated bonds doesn't affect the U.S. trade balance--that is not a good idea either. Those of us who walk outside in the sunlight and see reality as it is have a moral responsibility to bring others out of the cave: to raise the level of the debate, rather than to focus on casting handshadows that ultimately cannot but mislead.

UPDATE: Greg Mankiw compliments Michael Spence's one-equation international economics: Greg Mankiw's Blog: Spence on the Trade Deficit: Economist Michael Spence (erstwhile Harvard prof) has a nice piece on the U.S. trade deficit and the Chinese exchange rate in today's Wall Street Journal. His bottom line:it would be useful if we stopped pretending or alleging that China's exchange-rate policies are the root cause of our trade deficit. If our savings rate is stubbornly stuck below our investment rate, and if China does allow its currency to revalue over time, then we will simply run a deficit with another collection of countries, and from a domestic point of view, nothing much will have changed. Except that we won't have this subject to discuss with China anymore. The linkage among saving, investment, and the trade deficit is a topic that will feature prominently in ec 10 this spring. Brad DeLong on April 07, 2010 at 05:32 AM http://delong.typepad.com/sdj/2010/04/worth-reading-hoisted-from-the-archives-from- january-2007-in-condemnation-of-one-equation-economics.html#tp

85

No es momento para una guerra comercial Joseph E. Stiglitz 2010-04-06

NUEVA YORK – Sigue la batalla de los Estados Unidos contra China por los tipos de cambio. Cuando comenzó la Gran Recesión, muchas personas se preocuparon de que pudiera aparecer el proteccionismo. Es cierto que los líderes del G-20 prometieron que habían aprendido las lecciones de la Gran Depresión. No obstante, 17 de los 20 miembros del grupo introdujeron medidas proteccionistas apenas unos meses después de la primera cumbre de noviembre de 2008. La disposición para promover la compra de productos estadounidenses (“Buy American”) que se incluyó en la ley de estímulo de los Estados Unidos fue la que más atención despertó. Sin embargo, el proteccionismo se contuvo debido en parte a la Organización Mundial del Comercio. La debilidad económica sostenida de las economías avanzadas hace que exista el riesgo de una nueva ronda de proteccionismo. En Estados Unidos, por ejemplo, más de uno de cada seis trabajadores que desean un empleo de tiempo completo no logran encontrarlo. Estos fueron algunos de los riesgos relacionados con el estímulo insuficiente de los Estados Unidos, que se diseñó tanto para calmar a los miembros del Congreso como para reanimar la economía. En vista de los déficit crecientes, es poco probable que haya un segundo estímulo y, debido a que la política monetaria ha llegado a su límite y a que apenas se puede controlar a los halcones de la inflación, tampoco hay mucha esperanza de obtener ayuda por esa vía. Así pues, el proteccionismo está cobrando un lugar preponderante. El Congreso ha encargado al Tesoro de Estados Unidos que evalúe si China es "manipuladora de divisas". Si bien el presidente Obama ha retrasado durante algunos meses la fecha en la que Timothy Geithner, el Secretario del Tesoro, debe publicar su informe, el concepto mismo de “manipulación de divisas” está viciado: todos los gobiernos toman medidas que afectan directa o indirectamente al tipo de cambio. Los déficit presupuestales imprudentes pueden conducir a que haya una moneda débil, del mismo modo que las tasas de interés bajas. Hasta que estalló la reciente crisis en Grecia, los Estados Unidos se beneficiaban de un débil tipo de cambio dólar/euro. ¿Debían los europeos haber acusado a los Estados Unidos de “manipular” el tipo de cambio para aumentar las exportaciones a sus expensas? Aunque los políticos estadounidenses se centran en el déficit comercial bilateral con China – que es persistentemente grande—lo que importa es la balanza multilateral. Cuando comenzaron las exigencias de que China ajustara su tipo de cambio durante la administración

86 de George W. Bush, su superávit comercial multilateral era pequeño. Sin embargo, más recientemente China también ha tenido un superávit multilateral importante. Arabia Saudita también tiene superávit bilateral y multilateral: los estadounidenses quieren su petróleo y los sauditas quieren menos productos estadounidenses. Incluso en términos de valor absoluto, el superávit multilateral de mercancías de Arabia Saudita de 212 mil millones de dólares en 2008 fue muy superior al de China de 175 mil millones de dólares; en términos de porcentaje del PIB, el superávit de cuenta corriente de Arabia Saudita, de 11.5%, es más del doble del chino. El superávit de Arabia Saudita sería mucho mayor si no fuera por las exportaciones de armamento estadounidenses. En una economía global con una demanda agregada deficiente, los superávit en cuenta corriente son un problema. Pero el superávit en cuenta corriente de China de hecho es inferior que la cifra combinada de Japón y Alemania. Como porcentaje del PIB es del 5%, frente al 5.2% de Alemania. Muchos otros factores, además de los tipos de cambio, afectan la balanza comercial de un país. Uno de los elementos determinantes clave es el ahorro nacional. El déficit comercial multilateral de Estados Unidos no se reducirá significativamente hasta que el país ahorre mucho más; si bien la Gran Recesión indujo un mayor ahorro doméstico (que era prácticamente de cero), eso se ha visto más que anulado por el creciente déficit gubernamental. Es probable que un ajuste del tipo de cambio únicamente haga que cambie el lugar donde los estadounidenses compran sus textiles y prendas de vestir –en Bangladesh o Sri Lanka, en lugar de China. Mientras tanto, un aumento del tipo de cambio probablemente contribuirá a la desigualdad en China, puesto que los agricultores pobres se enfrentan a una creciente competencia de las granjas altamente subsidiadas de los Estados Unidos. Esta es la verdadera distorsión comercial de la economía global, por la que millones de pobres en los países en desarrollo resultan perjudicados mientras Estados Unidos ayuda a los agricultores más ricos del mundo. Durante la crisis financiera asiática de 1997-1998, la estabilidad del renminbi desempeñó un papel importante para estabilizar la región. De la misma forma, la estabilidad del renminbi ha ayudado a que la región mantenga un crecimiento sólido, del que se beneficia el mundo en su conjunto. Algunas personas aducen que China debe ajustar su tipo de cambio para evitar la inflación o la formación de burbujas. La inflación sigue estando contenida pero, lo que es más pertinente, el gobierno chino tiene a su disposición un arsenal de armas de otro tipo (desde impuestos a las entradas y los beneficios de capital hasta una variedad de instrumentos monetarios). Pero los tipos de cambio sí afectan los patrones de crecimiento, y es del interés de China reestructurar y alejarse de una alta dependencia del crecimiento impulsado por las exportaciones. China reconoce que su moneda debe apreciarse en el largo plazo y convertir la velocidad a la que lo debe hacer en un tema político ha resultado contraproducente. (Desde que comenzó a revaluarse el tipo de cambio en julio de 2005, el ajuste ha sido de la mitad o más de lo que la mayoría de los expertos creen que es necesario.) Además, iniciar una confrontación bilateral sería imprudente. Puesto que el superávit multilateral de China es la cuestión económica que preocupa a muchos países, los Estados Unidos deben buscar una solución multilateral basada en reglas. Imponer derechos unilaterales después de haber calificado unilateralmente a China de “manipuladora de divisas” socavaría el sistema multilateral sin muchos beneficios. China podría responder imponiendo derechos a los productos estadounidenses que se benefician

87 directa o indirectamente de los subsidios otorgados como parte del enorme rescate de los bancos y fabricantes de automóviles. En una guerra comercial no hay ganadores. Por ello, Estados Unidos debe tener mucho cuidado de no iniciar una en medio de una recuperación global incierta – por popular que pueda ser entre los políticos cuyos electores están preocupados, con razón, por el elevado desempleo y por fácil que sea culpar a los demás. Desafortunadamente, la crisis global se gestó en los Estados Unidos, y el país debe voltear hacia adentro, no sólo para reanimar su economía sino para evitar una repetición. Copyright: Project Syndicate, 2010. www.project-syndicate.org

Puede escuchar un podcast en inglés de este artículo en el siguiente enlace: http://media.blubrry.com/ps/media.libsyn.com/media/ps/stiglitz124.mp3 Traducción de Kena Nequiz

http://www.project-syndicate.org/commentary/stiglitz124/Spanish

88 Economist's View

Apr 06, 2010 "Evaluating the Renminbi Manipulation" Following up on the Joe Stiglitz post below this one, Martin Wolf has a different view. Unlike Stiglitz, he thinks that sanctions against China in retaliation for its currency policy are needed if China doesn't change its ways: Evaluating the renminbi manipulation, by Martin Wolf, Commentary, Financial Times: The incumbent superpower has blinked in its confrontation with the rising one: the US Treasury has decided to postpone a report due by April 15 on whether China is an exchange-rate manipulator. ... Is China a currency manipulator? Yes. ...China has controlled the appreciation of both nominal and real exchange rates. This surely is currency manipulation. It is also protectionist, being equivalent to a uniform tariff and export subsidy. Premier Wen Jiabao has protested against “depreciating one’s own currency, and attempting to pressure others to appreciate, for the purpose of increasing exports. In my view, that is protectionism”. The Chinese pot is calling the US kettle black. Yet some economists deny this, offering four counter-arguments: first, while the intervention is huge, the distortion is small; second, the impact on the global balance of payments is modest; third, global “imbalances” do not matter; and, finally, the problem, albeit real, is being resolved. Let us consider each of these points in turn. ...[explains why he believes each point is wrong]... I conclude that the renminbi is undervalued, that this is dangerous for the durability of global recovery and that China’s actions have not, so far, provided a durable solution. I conclude, too, that rebalancing is a necessary condition for sustainable recovery, changes in competitiveness are a necessary condition for rebalancing, real renminbi appreciation is necessary for changes in competitiveness, and a rise in the currency is necessary for real appreciation, given the Chinese desire to curb inflation. The US was right to give talking a chance. But talk must lead to action. Also, please see this update from Paul Krugman: Immaculate Transfer Strikes Again, by Paul Krugman: Oh, dear. Via Mark Thoma, I see that Joe Stiglitz has fallen victim to the doctrine of immaculate transfer... [As Krugman explains here, Steven Roach - who is also mentioned by Martin Wolf - is another recent victim.] Keynes and Hayek Just got back from this session: 1930 and the Challenge of the Depression for Economic Thinking: Friedrich Hayek versus John Maynard Keynes Moderator: Philip Mirowski, Carl Koch Professor of Economics and the History of Science at the University of Notre Dame Robert Skidelsky, Emeritus Professor of Political Economy at the University of Warwick, England. Speaker Papers

89 Bruce Caldwell, Editor of The Collected Works of F. A. Hayek, History of Economic Thought, Economic Methodology Professor, Duke University Speaker Papers It's late, the session ended after 11, and I haven't slept since who knows when, so let me just add two things. First, after hearing the talk tonight on Hayek from Bruce Caldwell, I think someone should write "Hayek and the Hayekians" (Axel Leijonhufvud -- see the link-- is participating in the session I'm moderating tomorrow. I asked him how to pronounce his name tonight, and he was very gracious in coaching me, it means "lion's head" and it helps to break it up that way, but I'll probably blow it. I'll try listening to this.) Second, walking back I wondered what macroeconomic theory would be like today if Keynes had never lived? How important was one person in the development of an alternative theoretical paradigm, one that found acceptance due top the Great Depression (though the competition between the ideas of Keynes and Hayek was more intense than I realized).If it's overly dependent on the existence of one person -- Keynes -- what does that say about the chances of a new theoretical paradigm emerging after this crisis (something many people at this conference believe is needed). There was a tour today of Keyne's office and the archives with his original manuscripts, Hayek's manuscripts too, but I missed it because my plane was stuck on the ground in Denver with a maintenance issue for 1-2 hours, that'll cheer you up before a long flight to London, then the bus from London to Cambridge was way slower than promised... Hadn't been here before -- interesting place. Posted by Mark Thoma on Thursday, April 8, 2010 at 04:41 PM

Reblog: Wow! Cash for Clunkers Worked!!

Reblogging Brad DeLong: That surprises me. But Christy Romer and Chris Carroll have a graph: Did 'Cash-for- Clunkers' work as intended?:

90 via delong.typepad.com Posted by Mark Thoma on Thursday, April 8, 2010 at 03:42 PM in Economics Save to del.icio.us http://economistsview.typepad.com/economistsview/

Layoff, Hiring, and Unemployment Rates

This is from a discussion of the Job Openings and Labor Turnover Survey (JOLTS) from the Atlanta Fed (much of the discussion is about the southern region; also, the unemployment rate is on the left- hand side, not the right-hand side as indicated in the graph). Notice the crash in the hiring rate coinciding with changes in unemployment. The policies that were used to battle the recession didn't put enough emphasis on turning this around. [I'm traveling - this should post automatically.]

Apr 07, 2010 The Astonishing Voice of Albert Hirschman Rajiv Sethi has a birthday wish for Albert Hirschman: The Astonishing Voice of Albert Hirschman, by Rajiv Sethi: Albert Hirschman is 95 years old today. Four decades ago, he published Exit, Voice and Loyalty, a slim volume that contains more insights per page than just about anything else I have read. I consider it to be among the finest books ever written by an economist. For reasons discussed below, it also has enormous contemporary relevance. The subtitle of the book is "Responses to Decline in Firms, Organizations and States." Hirschman's concern is with "repairable lapses" in organizational performance: declines that could be corrected with the right balance of information, incentives and

91 flexibility of response. This is not a subject to which economists had paid much attention, and he begins by asking why: While moralists and political scientists have been much concerned with rescuing individuals from immoral behavior, societies from corruption, and governments from decay, economists have paid little attention to repairable lapses of economic actors. There are two reasons for this neglect. First, in economics one assumes either fully and undeviatingly rational behavior, or, at the very least, an unchanging level of rationality... In other words, economists have typically assumed that a firm that falls behind... does so "for a good reason"; the concept... of a... "repairable lapse" has been alien to their reasoning.

The second cause of the economist's unconcern about lapses is related to the first. In the traditional model of the competitive economy, recovery from any lapse is not really essential. As one firm loses out in the struggle, its market share is taken up and its factors are hired by others... in the upshot, total resources may well be better allocated. With this picture in mind, the economist can afford to watch lapses of any one of his patients... with far greater equanimity than either the moralist who is convinced of the intrinsic worth of every one of his patients (individuals) or the political scientist whose patient (the state) is unique and irreplaceable. But is the neglect justified? Hirschman argues that it is not, because the vision of a "relentlessly taut economy" operating at or close to its productive potential is inapplicable to technologically modern societies capable of producing a substantial surplus relative to the needs of subsistence. The very existence of the surplus implies that considerable slack in the level of efficiency can be tolerated without disastrous consequences. As a result, firms and other organizations are "permanently and randomly subject to decline and decay, that is, to a gradual loss of rationality, efficiency, and surplus-producing energy no matter how well the institutional framework within which they function is designed." It is critically important, therefore to consider the "countervailing forces" that can arrest and reverse such decline. Hirschman identifies two such forces: desertion and articulation, or exit and voice. Exit refers to the fact that the customers of a firm (or members of an organization) can simply leave and attach themselves to a competing firm or organization. Voice refers to the expression of discontent: the natural human tendency to complain, protest, and generally "kick up a fuss." Each of these mechanisms is interesting in its own right, but it is the interaction of the two (and their connection to loyalty) that gives rise to the most intriguing possibilities. One of Hirschman's key insights is that exit will not serve as a reliable recuperation mechanism if it occurs too rapidly in the face of organizational decline: For competition (exit) to work as a mechanism of recuperation from performance lapses, it is generally best for a firm to have a mixture of alert and inert customers. The alert customers provide the firm with a feedback mechanism which starts the effort at recuperation while the inert customers provide it with the time and dollar cushion needed for this effort to come to fruition. In addition, rapid rates of exit can deprive an organization of precisely those customers (or members) who, had they remained, would be most inclined to utilize voice:

92 [Those] customers who care most about the quality of the product and who, therefore, are those who would be the most active, reliable, and creative agents of voice are for that very reason also those who are apparently likely to exit first in case of deterioration. As a result, the "rapid exit of the highly quality conscious customers... paralyzes voice by depriving it of its principal agents." While it is commonly believed that most organizations would prefer that their customers or members had no exit option at all (as in the case of a monopoly) Hirschman argues, instead, that monopolists would welcome a modest degree of competition in order to shed their most vociferous customers: [There] are many... cases where competition does not restrain monopoly as it is supposed to, but comforts and bolsters it by unburdening it of its more troublesome customers. As a result, one can define an important and too little noticed type of monopoly- tyranny: a limited type, an oppression of the weak by the incompetent and an exploitation of the poor by the lazy which is the more durable and stifling as it is both unambitious and escapable. This is why those holding power in dysfunctional states "have long encouraged their political enemies and potential critics to remove themselves from the scene through voluntary exile." More generally, the performance of near-monopolistic service providers may be worse that that which would prevail if monopoly power were absolute. This has enormous and wide-ranging implications. The poor performance of a national railway system might persist indefinitely if the most demanding customers also have recourse to road transportation. Public schools might deliver worse learning outcomes if private or parochial options are available to the most quality conscious parents. A small decline in neighborhood quality could turn into a precipitous collapse if those most affected by it simply move elsewhere. And the ease with which common stock can be sold implies that the most vigilant shareholders will liquidate their holdings rather than attempt to improve the performance of management. While most environments are such that either exit or voice is the dominant response to decline, there is one arena, that of political competition, in which both mechanisms are critical. In this setting, taking account of voice leads to sharply different predictions than theories based only on exit. Hirschman's critique of the Hotelling- Downs analysis of political competition (and the median voter theorem it implies) is devastating: As soon as the Hotelling model had been thus refurbished by Downs, its power to explain reality was again cast into doubt by the undisciplined vagaries of history. The selection by the Republican party of Goldwater in 1964... testified to the extreme reluctance of at least one party to conform to the Hotelling-Downs scenario... [It was not] Hotelling's original assumption of inelastic demand... that was wrong or unrealistic, but the inference that the "captive" consumer (or voter) who has "nowhere else to go" is the epitome of powerlessness. True, he cannot exit... but just because of that he... will be maximally motivated to bring all sorts of potential influence into play so as to keep... the party from doing things that are highly obnoxious to him... in a two-party system a party will not necessarily behave as the Hotelling-Downs vote-maximizer because "those who have nowhere else to go" are not powerless but influential.

93 With modern communication technologies able to transmit, coordinate and amplify voice to an unprecedented degree, these insights have more relevance than ever. As Hirschman's title suggests, the interplay between exit and voice depends critically on the presence or absence of loyalty: When loyalty is present exit abruptly changes character: the applauded rational behavior of the alert consumer shifting to a better buy becomes disgraceful defection, desertion, and treason. By making exit less appealing, loyalty to an organization can therefore be functional; it can "neutralize within certain limits the tendency of the most quality conscious customers or members to be the first to exit." But since "the effectiveness of the voice mechanism is strengthened by the possibility of exit," too much loyalty will stifle voice. In particular, the active promotion of loyalty by an organization can be detrimental to its own long run functioning: [Loyalty] promoting institutions and devices are not only uninterested in stimulating voice at the expense of exit: indeed they are often meant to repress voice alongside exit. While feedback through exit or voice is in the long-run interest of organization managers, their short run interest is to entrench themselves and to enhance their freedom to act as they wish, unmolested as far as possible by either desertions or complaints of members. From this perspective, a key determinant of organizational performance is the price of exit (which may or may not arise from loyalty): Such a price can range from loss of life-long associations to loss of life, with such intermediate penalties as excommunication, defamation, and deprivation of livelihood. Organizations able to extract these high penalties for exit are the most traditional human groups, such as the family, the tribe, the religious community, and the nation, as well as such more modern inventions as the gang and the totalitarian party... Since the high price of exit does away... with the threat of exit as an effective instrument of voice, these organizations... will often be able to repress both voice and exit. In the process, they will largely deprive themselves of both recuperation mechanisms. And the absence of recuperation mechanisms can have catastrophic consequences, as the current predicament of the Roman Catholic Church vividly illustrates. I could go on, but the point has been made. This is a book with dozens of sparking insights tied together by a coherent vision. The vision allows for a broad range of human motivation, encompassing (but not limited to) standard hypotheses regarding rational behavior. Economic actors in Hirschman's world shop for lower prices and higher quality, to be sure, but they also capable of making a nuisance of themselves, engaging in self-deception, and displaying fierce loyalty to organizations with which they are affiliated. This rich, complex conception of human behavior allows for a sweeping analysis that is as penetrating as it is ambitious. My birthday wish for Albert Hirschman today is nothing less than that which he has long deserved: the Nobel Memorial Prize in Economics. [Traveling here today - hopefully, this will post automatically as planned.] Posted by Mark Thoma on Wednesday, April 7, 2010 at 10:07 AM in http://economistsview.typepad.com/economistsview/2010/04/the-astonishing-voice-of-albert- hirschman.html

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09.04.2010 Trichet’s communication disaster

Jean Claude Trichet struggled to answer reporters’ questions at the ECB’s press conference about the interest rates that Greece would have to pay for emergency funds and explain his stance on the IMF’s role in a bailout, Bloomberg reports. Trichet argued at one point that lending to Greece without a subsidy element could simply mean at rates no lower than those at which creditor countries can finance themselves. He then retreated behind the argument that the decision rests with the governments. But Trichet also clarified that government bonds would not be affected by the new graduated haircuts system for collaterals, implying that in fact the change will help and not damage Greece. Also, interest rates have been left unchanged at 1%.

source: FT Alphaville

95 Greek CDS on record 468.5bp Credit-default swaps on Greece surged to an all-time high of 468.5bp, and the spread between Greek 10-year bonds and German bunds jumped to 439bp, the most since the introduction of the euro in 1999, Bloomberg reports. It now costs more to protect against a default by Greece than Iceland. Market participants are concerned that Greece ability to borrow is becoming “untenable” and that the European Union will be forced to lead a bailout. IMF descends on Athens IMF staffers have come to Athens for a two-week to offer technical help with fiscal policy, according to Le Monde, but this has very much the feel of a first stage of an IMF-led loan to the country. An IMF spokesman is quoted as saying that the purpose of the visit is to help with the fiscal administration. The financial markets are now expecting that some kind of emergency assistance is likely to be called upon relatively soon. Bundesbank gets really, really paranoid about the IMF Frankfurt Rundschau cites from an internal paper, with poisonous attacks on the EU’s backstop agreement for Greece, and in particular against the IMF. The Bundesbank is afraid of the following scenario. Greece simply calls the IMF for help, and the IMF in turns asks its largest members for money in return for SDRs. As Europe’s largest central bank, the Bundesbank would be immediately called upon to pay up. The Bundesbank believes that the IMF will offer less conditionality than the EU, and believes that Merkel’s position on Greece is too soft. The paper also include a more general broadside against the IMF, referring to the Washington-based institution as the Inflation Maximising Fund, in reference to a recent proposal by Olivier Blanchard, IMF chief economist, to consider a discussion on raising the inflation targets. Fitch prompts Greece to call for immediate help FT Deutschland opened with the story that Fitch rating agency called on Greece to immediately ask for help from the EU and the IMF. The Greece expert Chris Pryce said that it is now the times to acknowledge the true extend of the crisis. The editorial condemned such a move as arrogant and risky as it might destabilise the markets further. The article recommends the EU governments to remain calm and wait and see until May whether markets calm down but clarify the conditions under which they would help Greece if needed. http://www.eurointelligence.com/article.581+M5077150d8d5.0.html#

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Trichet Thwarted as Greece Erodes ‘Mr. Euro’ Status (Update1) By John Fraher

Last Updated: April 9, 2010 03:56 EDT April 9 (Bloomberg) -- Mounting speculation that Greece will default on 304.2 billion euros ($405.2 billion) of debt is depriving European Central Bank President Jean-Claude Trichet of the stable markets needed to bring Europe out of its worst post- war recession. Since early February when politicians began squabbling over how to rescue Greece from Europe’s largest deficit as a percentage of gross domestic product, the euro has lost 4.1 percent against the dollar and the extra yield demanded by investors to hold Greek debt rather than German bunds increased as much as a record 4.43 percentage points as traders saw a greater risk of default. Trichet, who was supposed to spend his final year in office nurturing the region’s nascent recovery, finds himself powerless to resolve the crisis because he has no control over fiscal policy. “Trichet is essentially an observer in the current crisis,” said Colin Ellis, an economist at Daiwa Capital Markets Europe Ltd. in London and a former Bank of England official. “He does not hold the levers of power.” Greece is highlighting the limits of Trichet’s ability to maintain confidence in the euro, which is facing its biggest challenge since he helped bring it into being in 1999. Trichet, who described himself as ‘Mr. Euro’ in 2006, has no say over how taxpayers’ funds should be used to rescue Greece. EU leaders rebuffed a March 4 warning from Trichet that involving the International Monetary Fund in a rescue would show that Europe was incapable of solving its own crises. Euro Gains The euro extended yesterday’s gains and traded at $1.3388 at 9:42 a.m. in Frankfurt after Trichet said in an interview with Italy’s Il Sole-24 Ore newspaper that Greece won’t need a bailout “at this moment.” The spread between Greek and German 10-year yields is still 423 basis points. A basis point is 0.01 percentage point. Trichet, whose eight-year term ends in October next year, yesterday attempted to answer reporters’ questions about the interest rates that Greece would have to pay for emergency funds and explain his stance on the IMF’s role in a bailout. “He’s one of the brightest central bankers out there, but it’s getting too complex,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc. “He has to fit into a political world and that’s what he’s uncomfortable with.”

97 Merkel Casts Doubt Trichet, 67, is trying to protect the euro as politicians refuse to fully explain how they would rescue Greece should it fail to raise money in financial markets. While leaders said on March 25 that they would co-finance a bailout with the IMF, they never spelled out when aid would be forthcoming or how much it would cost. German Chancellor Angela Merkel also has questioned whether her taxpayers should be asked to help fund Greek excess, casting doubt on her commitment to any rescue package. As Greek bonds plunged yesterday, a German government official reiterated that a rescue package would only be a last resort. “The communication exercise here becomes a monstrous problem,” said Peruzzo. “I’m not sure whether it’s possible for a human to cope with the tensions in the topics we’re discussing at this stage.” The Greek government aims to cut the budget deficit this year to 8.7 percent of GDP from last year’s level of almost 13 percent, more than four times the EU limit and the highest for any country in the euro’s history. Athens this week revised the 2009 deficit to 12.9 percent of GDP from 12.7 percent because of the size of the economic contraction. ‘Wrong Place’ Some economists say it’s unfair to expect Trichet to calm investors’ jitters about Greece because budget policy lies with governments. “He’s the focal point because he has the press conference and there is nobody more at the center of European finance and policy,” said Julian Callow, chief European economist at Barclays Capital in London. “So people are looking to him for guidance, but they are looking in the wrong place. This is a political issue.” The ECB also is doing its bit to help Greece by loosening its collateral rules, easing some investors’ concerns that Greek bonds could become ineligible in ECB money-market operations next year. The crisis nevertheless puts the ECB’s chief in an unusual position. Trichet has helped shape Group of Seven currency communiqués over the past two decades and has successfully used the threat of foreign-exchange intervention to steer the euro in the past. ‘I Sign the Notes’ In January 2004, he warned investors against “brutal” currency moves after the euro’s 21 percent surge against the dollar in the previous year. The euro dropped 7 percent over the next four months. “I am Mr. Euro,” he told reporters in June 2006. “We are issuing the currency, I sign the notes.” With the political debate over Greece’s future eroding Trichet’s influence for now, EU leaders are coming under pressure to resolve the crisis. “It’s total paralysis at both levels, it’s incredible,” said Paul De Grauwe, a professor at the Catholic University of Leuven in Belgium. “It’s really a relatively small problem. What is Greece -- nothing in a way, the relative size of the Greek economy -- and they are unable to come up with a clear policy.” http://www.bloomberg.com/apps/news?pid=20601085&sid=akNjOHV2OxBk#

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El BCE y el euro Columnista - José Carlos Díez - 09/04/2010 Ayer se reunió el Consejo del BCE. Su comunicado mantiene un discurso muy laxo y no hay subida de tipos oficiales en el horizonte. Aunque mantienen que la recuperación de la economía europea sigue su curso, la realidad es que la tasa trimestral en el cuarto trimestre se estancó y las previsiones no son mucho más optimistas para el primero. Los indicadores adelantados industriales anticipan una mejora en el segundo trimestre, pero gracias al impulso de la demanda exterior y la reciente depreciación del euro ya que las perspectivas para el consumo privado, especialmente en Alemania, siguen siendo preocupantes. Por eso razón, la mayoría de preguntas en la rueda de prensa volvieron a ser sobre el nuevo episodio de la tragedia griega. El BCE ha anunciado que seguirá aceptando el descuento en sus subastas de liquidez bonos con calificación de grado de inversión hasta 2012, lo cual elimina la incertidumbre sobre la deuda pública griega, pero da igual. Los inversores hace tiempo que se han alejado de la senda de equilibrio basada en los fundamentales y se mueven por impulsos a base de titulares de prensa o rumores siempre intencionados. El temor es la debilidad del euro, pero hace varias semanas que la tensión griega no afecta al resto de países periféricos ni a los diferenciales de la deuda privada, por lo que la depreciación del tipo de cambio es una bendición para la economía europea que está recibiendo un estímulo adicional. Una depreciación del 5% del tipo de cambio efectivo real es equivalente a una bajada de tipos oficiales del 0,25%. Pero el debate sobre el euro es político y el BCE tiene poco más que hacer. Sin embargo, el debate está absolutamente adulterado ya que el principal problema de la eurozona no es Grecia, es Alemania. Los alemanes tienen la percepción de que son los paganinis del proyecto europeo y que la continuidad de Grecia en la eurozona pone en riesgo la estabilidad de su divisa y de sus ahorros en el futuro, algo que les aterra y que mantiene su enfermiza propensión al ahorro. Angela Merkel ha adoptado la bandera del populismo y apoya las tesis de sus ciudadanos, por lo que ante esta situación en el que uno de los padres fundadores del proyecto europeo toma una posición contraria al desarrollo del mismo, lo más conveniente es que Merkel solicite la salida de Alemania de la Unión Monetaria. Esta opción sí está contemplada en los tratados. Alemania recuperaría su antigua moneda -el marco- y el resto de países seguiríamos en el euro. Alemania mantiene un superávit corriente similar al de China y ante la expectativa de apreciación de su divisa -la paridad de 1999 está claramente infravalorada al igual que la moneda china- el marco se apreciaría con fuerza contra el euro resolviendo de una vez los problemas de competitividad que los alemanes nos han creado al resto de países. El consumo privado alemán está estancado en la última década, por lo que de no haber sido por sus exportaciones al resto de socios, el caso alemán estaría próximo a la década pérdida japonesa. Una economía muy competitiva con fuertes crecimientos de productividad pero con crecimientos ridículos, caída de los salarios reales y deflación. Una depreciación del euro frente al marco alemán favorecería que los europeos exportásemos a Alemania y así el

99 superávit comercial germano disminuiría, y el déficit español o francés también, y estaríamos más próximos al equilibrio que tanto nos gusta a los economistas. El mayor problema sería para los inversores alemanes que han estado colocando sus excedentes de ahorro dentro de la eurozona y que tendrían minusvalías en sus inversiones en la misma proporción de la apreciación del marco alemán. Para las familias supondría una disminución de su riqueza y provocaría un desplome del consumo privado y una nueva recesión. Pero más dramático sería para el sistema bancario germano, ya que las minusvalías supondrían su quiebra que tendrían que pagar los contribuyentes. Supongo que tras estos argumentos se entenderá mejor porque he calificado a Merkel de populista. Un estadista entendería este escenario y contaría a sus ciudadanos la verdad para evitar tomar decisiones que perjudiquen a las nuevas generaciones de alemanes. Todos saldríamos perdiendo con la W germana y esperemos que, tras las próximas elecciones regionales, Alemania recupere el espíritu europeo. Pero, sin ellos, la eurozona seguiría siendo un gran mercado con una inflación estable y bajos tipos de interés. José Carlos Díez. Economista jefe de Intermoney http://www.cincodias.com/articulo/opinion/BCE-euro/20100409cdscdiopi_1/cdsopi/

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Chinese Trade Barriers May Undercut Yuan Change, Locke Says By Mark Drajem and Sara Eisen

April 9 (Bloomberg) -- U.S. Commerce Secretary Gary Locke said China should allow the yuan to float, even though import barriers may undercut any boost for American exporters from a revaluation. “Sometimes it’s like two steps forward and one step backwards, or two steps sideways” when dealing with China, Locke said in a Bloomberg Television interview. “They can revalue their currency, but if they still have market barriers or if they favor their domestic companies, then that revaluation of the currency will not make much of a difference.” U.S. Treasury Secretary Timothy F. Geithner’s unscheduled meeting with Chinese Vice Premier Wang Qishan in Beijing yesterday fanned speculation the yuan’s 21-month-old peg to the dollar may be scrapped. Geithner last week postponed an April 15 deadline for a U.S. review of currency policies amid pressure from Congress to brand China a currency manipulator. Twelve-month non-deliverable yuan forwards were little changed at 6.6136 per dollar as of 3:13 p.m. in Hong Kong ahead of trade data tomorrow that may show the nation’s first monthly trade deficit in six years, according to a Bloomberg News survey of economists. The contracts strengthened yesterday by the most in six weeks after the New York Times reported that China may unveil a revised yuan policy within days, including a small, one-time jump in the currency. ‘Imminent’ Move “A move is imminent,” said, Ben Simpfendorfer, Hong Kong-based chief China economist at Royal Bank of Scotland Group Plc, said in an interview. “It’s more likely to be weeks rather than days.” Geithner and Wang “exchanged views on U.S.-China economic relations, the global economic situation and issues relating to” a May meeting of officials from the two nations in Beijing, according to a Treasury Department statement.

101 China’s trade surplus with the U.S. last year rose to $226.8 billion, more than the combined deficit the U.S. had with its next nine biggest trading partners, according to Commerce Department data. The Chinese currency “should be market based; it should be allowed to float,” Locke said from New York. “The Chinese foreign-exchange rate puts American companies at a disadvantage.” Blaming The Peg Senators including New York Democrat Charles Schumer and South Carolina Republican Lindsey Graham blame the currency peg for much of the imbalance. The peg keeps the currency undervalued, aiding Chinese exporters and discriminating against foreign competitors, according to economists such as C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington. U.S. companies are also harmed by Chinese policies to restrict government purchases to software and clean-energy products developed in the country, rules curbing the growth of FedEx Corp. distribution, and by piracy of copyrighted movies and music, Locke said. Tim Adams, a former U.S. Treasury Undersecretary, said China may allow gains by the yuan “fairly soon” to limit the focus on the currency at international summits in coming months. The Group of 20 finance ministers’ meeting on April 23 in Washington, the U.S.-China Strategic and Economic Dialogue in Beijing in May, and the G-20 summit in Toronto in June are “key events,” Adams said in an interview from Washington. “I don’t think the Chinese want to go into these key forums talking about the exchange rate.” Stay Competitive China’s companies should be able to remain competitive if the yuan rises, Dell Inc.’s China President Amit Midha said today. “As long as it’s gradual, I think most industries would be able to adjust,” Midha, who is also vice-chair of the China Association of Enterprises with Foreign Investment, said in an interview. “It would be more difficult to adjust if the revaluation was sudden.” People’s Bank of China adviser Xia Bin said yesterday a small one-time revaluation of the yuan may be better than a return to gradual appreciation because it would help deter speculators. Hong Kong Exchanges & Clearing Ltd. Chairman Ronald Arculli said yesterday that China would avoid a “big- bang” revaluation. “Where the economic recovery of the global marketplace is still patchy, and not as solid as we would like to see, currency issues are very sensitive,” Arculli, 71, said. “The internationalization of the renminbi is a stated objective of the central government, but the timing of it, how we get there, and all that is what we call ‘work in progress’.” Level Playing Field U.S. companies meanwhile remain concerned at the lack of a “level playing field” for goods in China, Locke said. China introduced rules last year that restrict government purchases to technology products developed in China, the leading complaint of U.S. trade groups representing companies such as Microsoft Corp. and Intel Corp. Government contracting preferences are among policies, including tax rebates, export restraints and “Buy China” regulations, that limit trade and foreign investment, the U.S. Trade Representative’s office said in a December report to Congress.

102 Still, Locke said commercial relations between the two countries have benefited since China began to open up its markets and joined the World Trade Organization in 2001. “We are so economically interdependent with one another,” he said. “The last thing we want to do is engage in a trade war.” For Related News and Information: Top currency news: TOP FRX News on China’s currency: TNI CHINA FRX BN Stories on China economy: TNI CHINA ECO BN Last Updated: April 9, 2010 05:50 EDT http://www.bloomberg.com/apps/news?pid=20601087&sid=aSMdTElXLDzY&pos=5 China May Post Trade Deficit, Undermining Yuan Case (Update1) By Bloomberg News

April 9 (Bloomberg) -- China may post its first trade deficit in six years after a surge in imports of commodities and consumer goods, weakening U.S. arguments that the nation is keeping its currency undervalued to gain an advantage. Imports probably exceeded exports by $390 million in March after a $7.6 billion trade surplus the previous month, according to the median estimate in a Bloomberg News survey of 26 economists. The customs bureau is scheduled to release the figures tomorrow. Part of the shift into deficit is likely due to rising commodity prices, economists said. U.S. Treasury Secretary Timothy F. Geithner met in Beijing yesterday with Chinese Vice Premier Wang Qishan amid rising pressure from American lawmakers for action to rein in a U.S. trade gap with China that was $227 billion last year. Premier Wen Jiabao’s government has said a stable yuan and its 4 trillion yuan ($586 billion) fiscal stimulus has contributed to the global recovery. “China has done a lot in terms of restructuring global imbalances,” said Michael Buchanan, chief Asia-Pacific economist at Goldman Sachs Group Inc. in Hong Kong, who previously worked at the International Monetary Fund. Any impact from yuan appreciation will be “dwarfed by the swings in the trade balance driven by domestic demand in China and the U.S.,” he said. Yuan forwards declined 0.1 percent to 6.6228 per dollar as of 11:11 a.m. in Hong Kong, suggesting that the Chinese currency may appreciate about 3 percent over the next year. Export Damage

103 China has kept the yuan pegged around 6.83 per dollar since July 2008, seeking to aid exporters during the deepest contraction in trade since World War II. Exports still tumbled for 13 straight months, shrinking the nation’s trade surplus by 34 percent last year to $196 billion. The damage has left policy makers reluctant to rush to remove emergency measures even as growth accelerates and a record credit boom threatens to spark a property bubble. Central bank Governor Zhou Xiaochuan said in a March 23 interview that officials want to ensure the world isn’t in a “W-shaped recovery,” with a slowdown coming after the current rebound. Geithner’s visit yesterday, and his delay last week of the U.S. Treasury’s decision on whether to label China a currency manipulator in a biannual report, have boosted speculation policy makers will end the dollar peg. ‘Imminent’ Policy Change A change in China’s currency policy is “imminent” and may occur over the next few weeks, Ben Simpfendorfer, a Hong Kong- based economist at Royal Bank of Scotland Group Plc, said today on Bloomberg Television. Former U.S. Treasury Undersecretary Timothy Adams said in a separate interview that the nation may move “fairly soon” to allow appreciation against the dollar. China may announce a revised policy within days with a small, one-time jump in the yuan, which would then be allowed to trade in a greater range against the dollar, the New York Times reported yesterday, citing unidentified people with knowledge of an emerging consensus on the issue. The model for the shift would be the revaluation in July 2005, when the yuan was allowed to rise 2.1 percent overnight. Goldman Sachs predicts the government will announce in coming weeks a widening of the 0.5 percent band in which the yuan is allowed to fluctuate against the dollar. Buchanan said that setting the yuan against a basket of currencies weighted for the amount of trade China does with major economies would offer authorities greater flexibility and reduce the risk of traders making a “one way bet” on appreciation in the yuan against the dollar. Commodity Costs China’s exports probably rose 26.9 percent in March from a year earlier, after expanding 45.7 percent in the previous month, according to Bloomberg survey of economists. Imports may have grown 55.7 percent, compared with a gain of 44.7 percent, according to the median forecast. The projected shortfall in trade would reflect in part a rise in the cost of imported commodities, Jinny Yan, a Shanghai- based economist at Standard Chartered, said last month. Wen said during a meeting with foreign executives March 22 in Beijing the deficit for early March was $8 billion. The trade surplus narrowed for four straight months through February. The shift reflects China’s accelerating manufacturing and retail sales at a time when U.S. spending is hurt by job cuts and falling home values. Growth in the world’s third-largest economy quickened to 10.7 percent in the fourth quarter of 2009, the fastest pace since 2007. Inflation was a higher-than-forecast 2.7 percent in February and property prices rose the most in almost two years. ‘Temporary’ Deficit The March trade gap may not be sustained as exports pick up pace.

104 “We believe the deficit was temporary,” said Peng Wensheng, head of China research with Barclays Capital in Hong Kong. “Exports will pick up in the rest of the year, and we expect the trade balance to return to positive starting in the second quarter.” Economic data in coming days may show China’s banks made 729.5 billion yuan of new loans in March, according to the median estimate of 20 economists in a Bloomberg News survey. New bank lending totaled 700.1 billion yuan in February. Separate figures are projected to show M2, the broadest measure of money supply, rose 22.2 percent in March, slowing from a gain of 25.5 percent in February. --Chinmei Sung, Li Yanping, Kevin Hamlin, Jay Wang. Editors: Chris Anstey, Paul Panckhurst. To contact the reporter on this story: Chinmei Sung in Taipei at [email protected]. Li Yanping in Beijing at [email protected] Last Updated: April 9, 2010 00:11 EDT http://www.bloomberg.com/apps/news?pid=newsarchive&sid=af2.QW2w0pQo#

Global Business

April 8, 2010 China Seems Set to Loosen Hold on Its Currency By KEITH BRADSHER HONG KONG — The Chinese government is preparing to announce in the coming days that it will allow its currency to strengthen slightly and vary more from day to day, people with knowledge of the emerging consensus in Beijing said on Thursday. The move would help ease tension with the Obama administration about the United States’ huge trade deficit with China. China’s exports have been bolstered by its policy of keeping its currency, known as the renminbi or yuan, pegged at a nearly fixed rate to the dollar. Many members of Congress and economists say that by spending several hundred billion dollars each year to hold down the value of the renminbi, China has made its exports extremely competitive in foreign markets and taken away sales from manufacturers in the United States and other countries. But if China allows only a small move in the renminbi, the effects on the American trade deficit may also be small. Chinese companies are formidably competitive and, while labor costs are rising in China, transportation and communication costs are plunging because of heavy investment in new expressways and rail lines. A marginally stronger renminbi would make Chinese goods only marginally more expensive in the United States and make American goods slightly cheaper in China, which is now exporting more than four times as much to the United States as it imports. The move is being made for domestic policy reasons in China, primarily as an inflation- fighting tool, people with knowledge of the emerging consensus in Beijing said on

105 Thursday. While any announcement could still be delayed, China’s central bank appears to have prevailed with its arguments within the Chinese leadership for a stronger but more flexible currency, these people said. Insisting on anonymity because of the delicacy of the issue in Beijing, they predicted that China’s policy shift could easily occur before President Hu Jintao arrives in Washington next week for discussions with President Obama and other world leaders on improving nuclear security. Administration officials, especially Treasury Secretary Timothy F. Geithner, have publicly kept quiet to avoid giving the impression that a currency policy shift by China was a result of American pressure, instead of a decision based on what was best for the Chinese economy. Mr. Geithner maintained that silence on Thursday, holding meetings with senior officials in Hong Kong before flying in midafternoon to Beijing for a brief stopover and a meeting with Vice Premier Wang Qishan. A terse Treasury statement after the meeting with Mr. Wang noted only that the two men “exchanged views on U.S.-China economic relations, the global economic situation and issues relating to the upcoming economic track dialogue of the second U.S.-China Strategic and Economic Dialogue, to be held in Beijing in late May.” Chinese officials have been publicly wrangling over what to do about the currency for a month. The central bank favors a prompt move, while the Commerce Ministry, aligned with exporters, has opposed currency appreciation. The Obama administration has stayed scrupulously silent, fearing that public comments could backfire by stirring a nationalist reaction in Beijing against international pressure. Holding down the value of the renminbi through huge currency market intervention has become an enormous expense for China. The central bank spent 9.2 percent of the country’s economic output last year on the purchase of foreign reserves, mainly Treasuries that are now paying low interest. A stronger renminbi could prove to be a mixed blessing for the United States. If China cuts back sharply on purchases of Treasuries, then the Obama administration could find it harder to finance American budget deficits. But with the Chinese economy booming, a small move in the renminbi may still leave the central bank struggling with trade surpluses and a tide of speculative investment into China. That could force it to continue buying Treasuries with the extra dollars. Allowing wider variation in the currency would also make it easier for China’s central bank to fight inflation, which Wen Jiabao, the premier, identified last month as a top concern for the leadership. Consumer prices were 2.7 percent higher in February than a year earlier, after prices were falling as recently as last October. Inflation is accelerating in China faster than most Western economists expected. A stronger currency helps hold down prices by making imports cheaper. It also gives China’s central bank more room to raise interest rates and brake economic growth while lessening the risk of drawing more speculative investments into the country. A slightly stronger renminbi that fluctuates each day against the dollar would mainly hurt low-margin, labor-intensive industries in China like shoes and textiles. Many Beijing officials have been worried about job losses in these industries if the currency appreciates. Much of this production is already starting to move out of China, notably to Vietnam and Bangladesh, where labor costs have stayed low. And Chinese factories producing these

106 goods have been struggling to find enough workers over the last two months as the economy grew powerfully this winter, stimulated by heavy bank lending, strong demand for workers in the retail sector and rising government spending on high-speed rail lines and other infrastructure investments. In 2005, China allowed the renminbi to jump 2 percent overnight against the dollar and then trade in a wider daily range, with a trend toward further strengthening against the dollar. For its coming policy shift, China may follow a similar pattern, but officials may emphasize much more in public remarks that the value of the renminbi can fall as well as rise on any given day. That would help discourage a flood of speculative money into China from investors betting on rapid further appreciation in the currency, said people with knowledge of the emerging consensus in Beijing. Xia Bin, a member of the monetary policy committee of the Chinese central bank, hinted at the new policy for the currency while attending a forum in Shanghai on Thursday. “Whether to let the yuan slowly appreciate or let it rise to a tolerable range after careful calculation, I think it is better to have that quick, prompt appreciation,” he said, according to news service reports. Mr. Xia later added that, “At a certain point, when necessary, it is better to have a quick, prompt appreciation in a bid to fend off speculative capital.” But Mr. Xia, who spoke after others had already described an emerging consensus in Beijing in favor of a small move in the currency, cautioned that no one should expect a “large, one-time” appreciation of the renminbi of the sort that many members of Congress have sought. The central bank declined to comment on its currency plans. Michael Wines contributed reporting from Beijing and Li Bibo contributed research from Beijing. http://www.nytimes.com/2010/04/09/business/global/09yuan.html?hp

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ENTREVISTA: HERMAN VAN ROMPUY Presidente permanente del Consejo Europeo "El peligro de Europa es el populismo" RICARDO MARTÍNEZ DE RITUERTO - Bruselas - 09/04/2010 Gran desconocido de los ciudadanos, el ex primer ministro belga cumple en estas fechas sus primeros cien días al frente del órgano que agrupa a todos los jefes de Estado y de Gobierno de la UE, y rompe su silencio para hacer notar que la crisis no ha terminado y que el populismo acecha a Europa como consecuencia de la falta de compromiso Presidente de presidentes, Herman Van Rompuy, de 62 años, abandona su ancestral sigilo, apenas interrumpido por algunos discursos en ámbitos cerrados, en una entrevista con EL PAÍS y otros cuatro periódicos europeos en la que advierte de que en Europa "no se podrá escapar a reformas impopulares en los próximos años", y que sus líderes deben "ser valientes". El intenso trabajo político tras las bambalinas no ha impedido al presidente de la UE seguir dedicando algún tiempo a esas perlas de sensibilidad que son los haikus, microevocaciones de la naturaleza y de la fugacidad del tiempo de las que este político con intensa impronta humanista presentará una colección la próxima semana en Bruselas, aunque la antología (traducida al alemán, francés, inglés y latín desde el neerlandés original), no contendrá creaciones concebidas en estos primeros meses como presidente de la Unión. Pregunta. En estos cien días ha recibido críticas de todo tipo, algunas ofensivas. ¿Está dolido? Respuesta. Tras tantos años de vida política estoy vacunado. Puedo vivir con ellas. Sólo la verdad puede herir. P. ¿Responde el trabajo como presidente del Consejo a sus expectativas? R. Lo dije en mi discurso de aceptación del nombramiento: soy un facilitador que busca el consenso en un club de 27 miembros con muchas diferencias. Si yo fuera la figura que se pedía de alguien capaz de parar el tráfico en Pekín estaría pronto muy solo. No podría hacer que el Consejo funcione. P. El Tratado de Lisboa parece un instrumento que difícilmente se sabe cómo hacer funcionar. R. El Tratado de Lisboa es bueno, pero tiene muchas lagunas, incluso para mi función. Me obliga a buscar vínculos formales que no prevé, por ejemplo con la presidencia rotatoria. P. España ocupa esa presidencia. ¿Hay choques por celos? R. No tengo ninguna queja de la presidencia española. Se ha juzgado en ocasiones de forma superficial determinadas ausencias o presencias. La colaboración es buena. He dedicado mucho tiempo y esfuerzo a que esto funcione. P. Estos primeros meses han estado marcados por la agenda económica: con los planes para la Unión de 2020 y la crisis griega. R. El modelo europeo no puede sobrevivir sin un crecimiento económico más fuerte. Ni Europa puede jugar un papel en el mundo sin más fuerza económica. Yo estoy satisfecho con lo que se ha hecho. P. La crisis griega provocó fuertes tensiones en la Unión.

108 R. En esta misma sala en la que estamos, el 11 de febrero me reuní con el presidente francés y con la canciller alemana. No había acuerdo. Al final se pidió a Grecia que tomara medidas adicionales y el 3 de marzo lo hizo. Quedaba una segunda parte: poner en marcha un mecanismo de ayuda financiera. Se consiguió en el Consejo de 25 de marzo, que no fue fácil. Hubo otro acuerdo con el presidente francés y la canciller alemana. Se encontró una solución que no era evidente. Fuimos creativos. Cuando se me acusa de pasividad no sé qué es ser activo. P. Veo que la presidencia rotatoria española estuvo ausente de todas estas reuniones decisivas. R. El mundo ha cambiado con el Tratado de Lisboa. La presidencia española no preside el Consejo Europeo. No hay que crear falsas expectativas. La presidencia rotatoria juega un gran papel en consejos sectoriales, y España lo está haciendo muy bien y me alegro. Yo me reúno con Moratinos cada cuatro semanas. P. Los mercados no parecen dar mucha credibilidad a ese trabajoso acuerdo de ayuda para Grecia, a juzgar por la caída del euro y el oneroso coste para Atenas de la refinanciación. R. Si el 11 de febrero no hubiese habido acuerdo, habría sido una catástrofe. En la vida hay que evitar los desastres. Los mercados se mueven por rumores, especulaciones, no por decisiones políticas. Se decidió poner en marcha un mecanismo de ayuda financiera, basado en préstamos bilaterales y con participación del Fondo Monetario Internacional, cuya entrada en funcionamiento depende de Grecia, que no ha pedido ninguna ayuda ni tengo noticia de que la vaya a pedir de inmediato. P. ¿Cómo va la formación del grupo de trabajo que se le ha encargado para abordar las diversas ramificaciones de la crisis pensando en el futuro? R. La crisis que hemos vivido no ha terminado y se trata de evitar que se reproduzca. El grupo estará formado a finales de año. P. ¿Habría que modificar el Tratado de Lisboa para ser más agresivos en el tratamiento? R. Habría que ver cómo están los ánimos. No sería juicioso volver a revivir el calvario que supuso la aprobación del Tratado de Lisboa. Sería difícil encontrar la unanimidad para hacerlo. No hay que inventar la rueda. En el tratado tenemos instrumentos a nuestra disposición para actuar. El tratado nos fuerza a ser creativos. Hay que reflexionar sobre instrumentos estructurales. P. ¿Sería factible expulsar a algún socio por no cumplir las normas a que fuerza el club? R. Eso requiere una modificación del tratado, para lo que hace falta unanimidad. Y tampoco parece que la haya para expulsar a nadie. P. ¿Le ha creado problemas graves la canciller Angela Merkel para llegar a acuerdos en el seno de la UE? R. Yo no he pedido permiso a nadie para jugar mi papel de facilitador. Nadie me lo puede ni pedir ni impedir. Lo importante es que haya acuerdo. No me choca que se parta de puntos divergentes. Yo estoy en la moral de los resultados, no en la moral de las intenciones. P. ¿Comparte usted la idea de que Alemania se ha puesto al timón de Europa? R. El acuerdo alcanzado es un compromiso. Todo el mundo ha cedido. P. ¿Obstaculizan las divergencias franco-alemanas la progresión de la UE?

109 R. ¿Cree que no las hubo entre Kohl y Mitterrand o entre Schröder y Chirac? Afortunadamente, hay acuerdos entre Francia y Alemania. Es la condición necesaria, pero no suficiente. P. ¿No fue un paso atrás de la UE el tener que recurrir al Fondo Monetario Internacional, como acabó por imponer Berlín a sus socios? R. A mí me hubiese gustado otra cosa. Pero hubo un acuerdo que prevé que los préstamos sean bilaterales dentro del Eurogrupo [los 16 países que comparten la moneda única] y con evaluaciones de la Comisión Europea y del Banco Central Europeo. Todo se realiza en un marco europeo. P. ¿Está Europa abocada a ser una agente menor en un mundo regido por el G-2 de Estados Unidos y China? R. Yo soy optimista. La Unión Europea creó en 2008 el G-20, en el que se introdujo a países emergentes. Ha funcionado bien con la presencia europea. Pero tendrá más dificultades en el periodo posrecesión, cuando haya menor urgencia de actuar. Espero que se reencuentre el espíritu de crisis, la sensación de urgencia. Los problemas no pueden ser resueltos por dos sino por todos, incluida la UE. P. Que en la cumbre de Copenhague sobre cambio climático fue humillada. R. Cada uno lo vive según su personalidad. Copenhague no fue buena para la UE. Pero hay que pensar qué hubiera sido de Copenhague sin la aportación europea. Los otros actores habrían hecho promesas mucho menos ambiciosas. Y no son suficientes. Hay que hacer más. El proceso necesita un nuevo impulso. No hay que desanimarse por Copenhague. P. ¿Mantiene su idea de que Turquía no es ni será nunca Europa? R. Hay negociaciones desde 2005 que se sabe que llevarán tiempo. Y aun si hay acuerdo, no está decido que ello lleve automáticamente a la decisión de que sea Estado miembro. Y luego está la decisión que deba adoptar cada uno de los Estados. En mi actual situación no tengo posición formal. P. ¿Debe la UE de dotarse de fronteras o puede ampliarse indefinidamente? R. De Gaulle decía que Europa iba del Atlántico a los Urales, pero no veo que Rusia tenga intenciones de sumarse. Cuando en 1999 se tomó la decisión de abrirse a Turquía, se sabía que el país está parte en Europa y parte en Asia. Con la apertura de negociaciones se ha abierto la posibilidad de llevar la frontera de la UE más allá del Bósforo. P. ¿Cuál es el mayor peligro que acecha hoy a Europa? R. El gran peligro es el populismo reinante y, en consecuencia, la falta de compromiso europeo. El populismo hace difícil tomar las medidas que habrá que adoptar para el futuro de Europa. Cuando veo la agenda económica, las reformas que hay que hacer, los desafíos presupuestarios... veo que estamos obligados a tomar medidas impopulares. No se podrá escapar a reformas impopulares en los próximos años. Pero hay que ser valientes. El único consuelo es pensar en que no hay que excluir que haya un reconocimiento cuando los electores vean los resultados. Yo he vivido dos veces la experiencia. http://www.elpais.com/articulo/internacional/peligro/Europa/populismo/elpepiint/20100409el pepiint_4/Tes?print=1

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08.04.2010 And now comes the Greek private sector

Greece’s four largest banks asked for government support to help counter a liquidity squeeze resulting from a significant flight of deposits in the first two months of the year, the FT reports. The banks seek access to about €14bn in loan guarantees and €3bn of special bonds that could be used as collateral to borrow from the ECB. These are the remaining funds of the rescue plan that the government had put in place during the 2008 credit crunch that had not been taped yet. Local savers transferred about €10bn deposits (4.5% of total in the banking system) out of Greece. Share prices of the Greek banks fell by 4%. ECB’s new collateral rules penalises Greece ECB’s new lending rules may end up hurting Greece more than helping it, Bloomberg reports. At today’s ECB conference Jean Claude Trichet is expected to lay out the details of the ECB’s new collateral framework, to come into force in 2011, which includes a proposed “graded haircut schedule.” A haircut is the risk premium central banks apply to securities they accept as collateral against loans. A 10% haircut on an asset means the central bank would lend commercial banks 90% of its value. The ECB is proposing to apply bigger haircuts to assets with lower credit ratings. Due to its poor credit rating, Greek debt will thus be treated like poor collateral, so banks will no longer be able to borrow as much with Greek debt as collateral. Simon Johnson is quoted saying that “the days of Greece being able to borrow easily at low interest rates in the euro zone will close once and for all.” Greece contagion The FT short view notes that the renewed concerns about Greece have not yet caused knock- on jitters on Portuguese or Spanish bonds. “This is a marked departure from previous bouts of Greek default fears. The path of Portuguese and Spanish spreads is key – the contagion effects of the Greek crisis are high on people’s worry lists. A few days of steady spreads is not enough to quash contagion worries, but if this persists it will encourage risk appetite.”

111 Greece might need further spending cuts Kathimerini reports that the Treasury’s latest expenditure projections for Greece suggest that most likely there will be a need for further spending cuts. Three ministries have already disboursed more funds than they should in the first two months of the year: The Ministry of Economy, Competitiveness and the Marine spent 18.2% of its total appropriation for this year, the Interior Ministry 17.4% and the Ministry of Labour 17%. Even worse are insurances. OAEE health insurance for self employed has disbursed 41.7% of its assets. The social insurance ΙΚΑ 25.3% and 20.4% NAT. OECD growth forecasts According to the latest OECD forecasts, G7 countries continue to grow faster, though OECD the recovery is still fragile. Germany was the only G7 country contracting in the first quarter of 2010. The data suggest that the German economy contracted by 0.4% in Q1, though the OECD forecasts a strong recovery with 2.8% growth for Q2. The combined GDP of the three largest countries in the euro area, Germany, France and Italy, is expected to grow at 1.9% in Q2. Meanwhile the Ifo index suggests the eurozone as a whole to grow by 0.3% in Q2, according to FT Deutschland. Mohammed El-Erian on Greece Writing in the FT Mohamed El-Erian predicts that the Greek crisis is going to get worse before they get better. Alarming risk spreads will caution new investors and prompt late movers to sell Greek assets rather than buy. Against this background the blame game in Europe is likely to intensify. The solution to the Greek problem is undermined by the inability of the major players to credibly commit to the required level of coordination and trust. As a result, no meaningful progress is made, the problems fester, and the risks of a disorderly outcome increase. Quentin Peel on Germany Quentin Peel in the FT notes that Germany, the greatest economic power in Europe, is not the country it was. Since 1990 it has become significantly poorer, with a lower per capita income and a lot less money to spare. It has a new geographical perspective, too, as a central European rather than west European state. Does this mean Germany is no longer a reliable partner in the European Union or just that the country has become more normal, putting national interests first like its fellow members? Out of pragmatic choice Angela Merkel still believes that Europe should argue with one voice to matter most in global negotiations. Merkel advocates treaty change to reinforce the stability of the eurozone. But there is no strategic vision for the future. http://www.eurointelligence.com/article.581+M54d0e201eb6.0.html#

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Greece Needs Political Will to Take ‘Hard Medicine,’ White Says

By Svenja O’Donnell and Francine Lacqua

April 9 (Bloomberg) -- Greece needs the political will to make budget reforms and convince its population to take the “hard medicine” to prevent a debt default, former Bank of International Settlements Chief Economist William R. White said. “There’s a lot of low-hanging fruit that could be taken down to improve the situation in Greece,” White said in a Bloomberg Television interview in Cambridge, England yesterday. “Ultimately what it comes down to is that it’s a question of the political will of the government to do it, and the capacity to get the people on side to take the kind of hard medicine that they really do need to take.” Greek bonds plunged this week on renewed concern that the country won’t succeed in cutting its budget deficit, the European Union’s largest. Prime Minister George Papandreou’s government needs to sell 11.6 billion euros ($15.5 billion) of debt by the end of next month. “There are so many things that could be fixed in Greece with respect to the fiscal side of things,” White said. “Talking about stuff isn’t good enough. You actually have to go out and do it.” Leaders of the nations who share the euro last month endorsed a Franco-German proposal to help Greece with a mix of International Monetary Fund and bilateral loans at market interest rates that would be triggered only if Greece runs out of fund-raising options. European Central Bank President Jean-Claude Trichet said yesterday he doesn’t expect a default and is confident the nation will solve its budget problems. White spoke while attending a conference organized by the Institute for New Economic Thinking in Cambridge. To contact the reporters on this story: Svenja O’Donnell in London at [email protected]; Francine Lacqua in London at [email protected]. Last Updated: April 8, 2010 19:01 EDT http://www.bloomberg.com/apps/news?pid=20601087&sid=a7AAyeLP2O40&pos=4#

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Merkel’s Government Popularity Unchanged, Poll Shows (Update1) By Patrick Donahue April 7 (Bloomberg) -- The popularity of Chancellor Angela Merkel’s governing coalition remained unchanged four weeks before a crucial election in the western German state of North Rhine-Westphalia, a Forsa poll commissioned by Stern-RTL showed. Merkel’s Christian Democratic bloc remained at 34 percent, the same result as in last week’s poll, while her Free Democratic Party coalition partner held at 7 percent, a combined 7 percentage points below the two parties’ Sept. 27 election result, the poll showed. The Social Democrats slid one point to 24 percent, while the Green Party climbed one point to 15 percent. The Left Party remained at 12 percent. That put the three opposition parties 10 points ahead of the governing coalition. Eight percent of voters would select “other” parties in an election, the poll showed. The poll surveyed 2,002 people between March 29 and April 1 and has a margin of error of 2.5 percentage points. Elections in North Rhine-Westphalia, Germany’s most populous state, will be held on May 9. A loss for Merkel’s Christian Democratic-Free Democratic coalition in the state would end her majority in the Bundesrat, the upper house of Germany’s parliament in Berlin. To contact the reporter on this story: Patrick Donahue in Berlin at at [email protected]. Last Updated: April 7, 2010 04:38 EDT http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aes1TEBZyNtk

Merkel’s Popularity Drops to 40-Month Low in ARD Opinion Poll By Rainer Buergin April 1 (Bloomberg) -- Chancellor Angela Merkel’s popularity fell to the lowest since November 2006 as three quarters of Germans voiced dissatisfaction with her government’s performance, ARD television said. Backing for Christian Democratic Union leader Merkel fell 7 percentage points from the previous month to 55 percent, ARD said, citing an Infratest dimap poll it commissioned. Labor Minister Ursula von der Leyen was the most popular leading politician, 1 percentage point ahead of Merkel, who tied with Defense Minister Karl-Theodor zu Guttenberg. Support for Foreign Minister Guido Westerwelle, chairman of the Free Democratic Party, fell 2 points to 23 percent, making him the least popular leading German politician, ARD said. Infratest interviewed 1,000 people on March 29-30.

114 Falling support for the leaders of the federal government in Berlin suggests the CDU and the FDP may struggle to stay in power in North Rhine-Westphalia, Germany’s most populous state, where an election will be held on May 9. Losing the state would make it harder for Merkel and Westerwelle to get legislation through the upper house of parliament, in which Germany’s 16 states are represented. If elections were held now at federal level, Merkel’s CDU and its Bavarian ally, the Christian Social Union, would have the support of 35 percent of voters, down 1 point from a month earlier, ARD said. Support for the FDP fell 2 points to 8 percent. The combined total for the national coalition partners is the lowest since October 2006, ARD said. Backing for the opposition Social Democrats rose 3 points to 28 percent, the highest since May 2009. The Green party was unchanged at 14 percent support, while the Left Party, made up mainly of former East German communists, fell 1 point to 10 percent. Infratest interviewed 1,500 people for that poll, which was also carried out from March 29 to March 30. The margin of error in both polls was as much as 3.1 percentage points, ARD said. To contact the reporter on this story: Rainer Buergin in Berlin at [email protected]. Last Updated: April 1, 2010 05:19 EDT http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPClTWLHuH.c

115 MARKETS Bubbles lurk in government debt By Kenneth Rogoff Published: April 7 2010 14:50 | Last updated: April 7 2010 18:48 As the global economy reflates, many people are asking: “Is the next bubble in gold? Is it in Chinese real estate? Emerging market stocks? Or something else?” A short answer is “no, yes, no, government debt”. In my work on the history of financial crises with Carmen Reinhart , we find that debt-fuelled real estate price explosions are a frequent precursor to financial crises. A prolonged explosion of government debt is, in turn, an exceedingly common characteristic of the aftermath of crises. As for the probable non-bubbles, most emerging markets face better prospects in the decade ahead than does the developed world, and their central banks will probably want to continue diversifying their reserve holdings. Of course, huge volatility and corrections along the way are normal. Watch out for sovereign debt black holes - Mar-31 Shorting government bonds gets thumbs up - Mar-28 Treasury issuance hits swap rates - Mar-15 Bumpy ride ahead for all bonds - Feb-28 Europe looks to tap US investors - Feb-11 Investors fear the Greeks but warm to the Irish - Jan-25 But a deeper question is whether economists really have any handle on ferreting out dangerous price bubbles. There is much literature devoted to asking whether price bubbles are possible in theory. I should know, I contributed to it early in my career. In the classic bubble, an asset (say, a house) can have a price far above its “fundamentals” (say, the present value of imputed rents) as long as it is expected to rise even higher in the future. But as prices soar ever higher above fundamentals, investors have to expect they will rise at ever faster rates to make sense of ever crazier prices. In theory, “rational” investors should realise that no matter how many suckers are born every minute, it will be game over when house prices exceed world income. Working backwards from the inevitable collapse, investors should realise that the chain of expectations driving the bubble is illogical and therefore it can never happen. Are you reassured? Back in my days as a graduate student, I know I was. But then along came some rather clever theorists who noticed that bubbles might still be possible (in theory), if we lived in a world where the long-run risk-adjusted real rate of interest is less than the trend growth rate of the economy. Basically, this condition raised the possibility that the bubble might grow slowly enough that houses would never cost more than world gross domestic product. Oh, no! But there soon followed empirical research reassuring us that we did not live in such a bizarre land. Science moves on. Eventually, economists realised that in a real-world setting replete with non-linearities and imperfect markets, the same set of fundamentals can, in principle, support entirely different classes of equilibria. It all depends on how market participants co-ordinate their expectations. In principle, prices can jump suddenly and randomly from one equilibrium

116 to another as if driven by sunspots. (I believe this notion of self-fulfulling multiple equilibria is quite closely related to George Soros’s notion of “reflexivity”.) The problem of reflexive bubbles turns out to be even more acute when the government’s policy objectives are inconsistent, as they so often are. For example, Maurice Obstfeld famously demonstrated how self-fulfilling investor expectations can bring down a fixed exchange rate. If investors gather with enough sustained force, and if the central bank lacks sufficient resilience and resources, investors can blow out a fixed exchange rate regime that might otherwise have lasted quite a while longer. The real issue is not whether conventional economic theory can rationalise bubbles. The real challenge for investors and policymakers is to detect large, systemically dangerous departures from economic fundamentals that pose threats to economic stability beyond mere price volatility. The answer, as Carmen Reinhart and I demonstrate drawing on centuries of financial crises, is to look particularly for situations with large rapid surges in leverage and asset prices, surges that can suddenly implode if confidence fades. When equity bubbles burst, investors who made money in the boom typically swallow their losses and the world trudges on, for example after the bursting of the technology bubble in 2001. But when debt markets collapse, there inevitably follows a long, drawn-out conversation about who should bear the losses. Unfortunately, all too often the size of debts, especially government debts, is hidden from investors until it comes jumping out of the woodwork after a crisis. In China today, the real problem is that no one seems to have very good data on how debt is distributed, much less an understanding of the web of implicit and explicit guarantees underlying it. But this is hardly a problem unique to China. Even as published official government debt soars, huge off-balance-sheet guarantees and borrowings remain hidden for political expedience around the world. The timing is very difficult to call, as always, but even as global markets continue to trend up, it is not so hard to guess where bubbles might be lurking. Kenneth Rogoff is is a professor at Harvard University and co-author (with Carmen Reinhart) of ‘This Time is Different: Eight Centuries of Financial Crises http://www.ft.com/cms/s/0/f22a3704-4248-11df-9ac4-00144feabdc0.html

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BA and Iberia sign merger agreement By Mark Mulligan in Madrid and Pilita Clark in London Published: April 8 2010 07:28 | Last updated: April 8 2010 08:09 British Airways and Iberia on Thursday announced a definitive merger agreement, ending nearly two years of often strained negotiations on the creation of a Europe’s third-largest airline group. The companies, which have both been battered by competition from low-cost carriers and the global downturn in business travel, said the merged group would boast a 408-aircraft fleet and carry more than 58m passengers a year to 200 destinations. Willie Walsh, BA’s chief executive, will take up the chief executive position at the new holding company, to be known as International Airline Group. Antonio Vázquez, Iberia’s chairman, will take up the same post in the new organisation. BA shareholders will hold 55 per cent of the new company, compared with 45 per cent for Iberia’s owners, but each airline would also have its own chief executive and operating company in London and Madrid to preserve both brands and existing international flying rights. Current BA shareholders will receive one share in the new company for every one held in the UK airline, while Iberia’s shareholders will get 1.0205. The carriers said the deal, which is expected to be completed by the end of this year, would generate synergies of about €400m (£350m) by the fifth year. One important hurdle to the completion of the deal had been BA’s £3.7bn pension scheme deficit. As outlined under a memorandum of understanding signed last November, Iberia remains entitled to terminate the merger agreement if a pension recovery plan agreed between BA and its pension trustees proves “materially detrimental to the economic premises of the proposed merger”. If completed, the tie-up will create Europe’s biggest airline group, after Lufthansa of Germany and Air France-KLM. It must clear competition authorities in Brussels and needs approval from each airline’s shareholders. As part of the political and regulatory demands posed by the deal, the airlines agreed last year that the new group would have its headquarters in London but be registered and tax-resident in Spain, where it would also hold most board meetings and all shareholder meetings. The airlines confirmed on Thursday that the holding group would have its premium listing on the London Stock Exchange, but also be traded on the Madrid Bolsa through an interconnection system known as the “Mercado Continuo”. Complications related to the market regulators’ review of the proposed listings had made it impossible to meet a deadline that had been set for last Wednesday. Mr Walsh said on Thursday: “The merged company will provide customers with a larger combined network. It will also have greater potential for further growth by optimising the

118 dual hubs of London and Madrid and providing continued investment in new products and services.” BA shares were 0.5 per cent lower at 237.1p in early London trading, while in Madrid Iberia stock eased 0.3 per cent to €2.62. http://www.ft.com/cms/s/0/ec3ffa1c-42d5-11df-96c4-00144feab49a.html United and US Airways resume merger talks By Helen Thomas and Justin Baer in New York Published: April 8 2010 00:20 | Last updated: April 8 2010 00:20 US Airways and the parent of United Airlines have resumed talks about a merger between the two carriers, returning to a possible combination that the pair last discussed in earnest two years ago. Sources close to the situation suggested that the improving US economy had emboldened the airlines to think again about ways to consolidate the sector. Although the two sides are not thought to be close to finalising deal terms, negotiations could move quickly given the history of merger discussions between the companies. Glenn Tilton, chief executive of United, and Doug Parker, head of US Airways, have been the US industry’s most vocal proponents of consolidation to remove excess capacity from the beleaguered airline industry. Although the groups have intensified talks in recent weeks, the discussions – which were first reported by the New York Times – are in their early stages and a deal still may not materialise, sources added. Representatives for US Airways and United declined to comment. The rekindled talks come almost two years after United shelved talks with US Airways, conceding in May 2008 that the costs of integrating two complicated operations might have overwhelmed a carrier already reeling from record fuel prices. While United itself had been spurned by Continental Airlines a month earlier, executives from the Chicago-based carrier had remained in discussions with Continental over a marketing alliance. United and Continental eventually forged such an agreement, winning immunity US antitrust laws to create a transcontinental partnership with Germany’s Lufthansa. Delta Air Lines’ 2008 agreement to merge with Northwest Airlines was expected by industry executives and their advisers to trigger a wave of deals that consolidated the industry. Record fuel costs and a severe recession intervened, however. US Airways is the smallest of the five legacy US airlines groups by revenue. A merger with United would help the combined company shed unprofitable routes and excess costs. In 2008, the airlines had targeted about $1.5bn in synergies, a figure that would have exceeded the potential deal’s purchase price. United was also concerned with US Airways’ looming obligations to pay for new aircraft, and with elements of its labour contract that would have granted pilots a significant raise following the merger. The need to reach agreement with the two carriers’ pilots unions could again prove a stumbling block to a deal. http://www.ft.com/cms/s/0/f41e67fe-429a-11df- 91d6-00144feabdc0.html

119 COLUMNISTS Why the euro will continue to weaken By Wolfgang Münchau Published: March 7 2010 19:46 | Last updated: March 7 2010 19:46 If you want to unnerve a European, the revelation of a secret dinner of New York-based hedge funds conspiring against the euro is hard to beat. Europeans are right to worry – but not about the collusion itself. They should be much more concerned that some of the world’s smartest investors are convinced the euro has only one way to go: deep down. At first sight, this flies in the face of a previous consensus. In Europe, in particular, the predominant view has been that the infidels at the Federal Reserve and the Bank of England will ultimately inflate themselves out of their debt, while the European Central Bank will hold firm. That scenario would be consistent with an overvalued euro. So what has prompted some sophisticated investors to think the opposite? Greece? Probably not. This is a story about what will happen to the eurozone beyond Greece. Without political and legal constraints, this would be much easier. The eurozone would prescribe itself a crisis resolution mechanism, a procedure to manage internal imbalances, and perhaps move towards a common eurozone bond. Several economists have made concrete proposals: Daniel Gros, director of the Centre for European Policy Studies, and Thomas Mayer, chief economist of Deutsche Bank, have argued the case for a European Monetary Fund. Yves Leterme, the Belgian prime minister, has proposed a European debt agency. While all of this sounds sensible, none of it may ever happen because of political and legal constraints. Some member states would argue that a new European treaty would be needed to implement such proposals. The route to getting the Lisbon treaty ratified was so tortuous that Brussels would rather go to hell and back than negotiate and ratify another treaty. In any case, German constitutional law imposes such tight constraints that any dilution of the no bail-out clause in the Maastricht treaty or the price stability target of the ECB might trigger a forced German exit. The most one can hope for during the next 10 years is improved voluntary co- ordination in the European Council. So the question then becomes: what economic adjustment mechanisms are feasible against this political and constitutional backdrop? The options are limited. The one policy response we can almost take for granted will be an attempt to reduce budget deficits back towards the Maastricht treaty’s upper ceiling of 3 per cent of gross domestic product. This will be achieved, if not by 2012, then a year or two later. Meanwhile, Germany has unilaterally prescribed itself a deficit-to-GDP ceiling of 0.35 per cent from 2016. There will be some slippage here as well. But there can be no doubt that the eurozone will try – and probably succeed – to consolidate its fiscal position. The budget committee of the German Bundestag started last Friday, in fact, by cutting the finance minister’s 2010 budget by almost €6bn ($8.2bn, £5.4bn). If we assume further budgetary consolidation as a given, how then will the eurozone economy adjust? It is an economic fact that the sum of public and private sector balances must equal the current account balance. So forcing up public sector balances implies either an offsetting

120 fall in private sector balances, an offsetting improvement in the current account balance, or some combination of the two. In scenario one, the eurozone’s current account balance remains broadly unchanged, and all the adjustment comes through a fall in private sector balances. In a similar way, Greece last week solved its fiscal problem by creating a private sector problem of identical size. The Greek state – the sum of its public and private sectors – is just as bankrupt today as it was a week ago. This means that, by following the fiscal policy rules, the eurozone would risk a private sector depression, which would almost certainly be concentrated heavily in Europe’s south. This scenario would greatly increase the probability of a eurozone break-up at some point in the future. Investors who believe in this scenario would be very afraid to hold euros. In scenario two, all the adjustment comes through the eurozone’s current account balance, which would turn from slightly negative to strongly positive. It is difficult to see how this could be done without a significant further devaluation of the euro. The euro would join the long list of currencies that have seen their problems solved through competitive devaluation. So the consequences would be a significant devaluation of the euro against the dollar and a reversal of its appreciation against sterling. It would make life more difficult for the British. But, most importantly, it would contribute to a resurgence in global imbalances. Whichever scenario you choose, the euro is going to be weak. Even if the eurozone were to allow more serious slippage in budgetary consolidation than I have suggested, that would probably not help the euro either, as markets would start to doubt the longevity of the currency union for political reasons. We have always known that a monetary union cannot exist without political union in the long run. Those smart New York investors are betting that the long run is closer than we thought. [email protected] More columns at www.ft.com/wolfgangmunchau http://www.ft.com/cms/s/0/b0260ac6-2a1b-11df-b940-00144feabdc0.html

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US rate uncertainty leads investors to cut riskier bets By Jamie Chisholm, Global Markets Commentator Published: April 8 2010 08:48 | Last updated: April 8 2010 09:41 09:35 BST: Uncertainty over the speed of US monetary tightening and festering eurozone fiscal concerns provided investors with an excuse to reduce riskier bets on Thursday. The FTSE All World index fell 0.7 per cent and commodities pulled back from multi-month peaks as traders eyed the latest decisions on interest rates from the European Central Bank and the Bank of England, due later in the session. Demand strong in US Treasury debt sale - Apr-07 Short View: Greek contagion - Apr-07 StarMine forecasts paint rosier US earnings picture - Apr-07 Venezuela heads debt default risk list - Apr-07 Neither is expected to alter its main rate, but comments from the ECB in particular will be scanned for any clues regarding potential aid to Greece, where the position of the banking system appears increasingly precarious. Indeed, though apparently contained – the bonds of other so-called peripheral eurozone nations have held up relatively well of late – the Greek crisis still has the capacity to rattle investors. However, it seems that once again it is the prospects for a shift in US monetary policy that is exercising traders. A sell-off on Wall Street on Wednesday was partly blamed on some forceful comments from Thomas Hoenig, president of the Kansas City Fed. Mr Hoenig, a known hawk, said he thought the Fed should consider raising US rates “sometime soon” in order to prevent asset bubbles. He even specified a move to 1 per cent from the current 0-0.25 per cent. Thursday’s Market Menu What’s affecting risk appetite Risk off ● Greece: debt spiral accelerates. ● Hoenig : Kansas chief highlights need for asset bubble pinprick. ● Geopolitics: Thailand and Kyrgyzstan situations deteriorate. Risk on ● Auction: US 10-year sale went well, calms fears of spiking bond yields. ● Renminbi: hopes China will allow appreciation soon. Around the same time, however, Fed chairman Ben Bernanke was playing down the improvement in the US labour market and striking a generally downbeat tone. The fact that

122 the markets gave greater weight to Mr Hoenig suggests investors recognised the market was ripe for a sell-off after recent gains.

● Bourses in Europe moved sharply lower as traders noted not only the overnight 0.6 decline in New York but also the continued softness in US equity futures, which suggest that the S&P 500 will lose another 0.5 per cent at the open. The FTSE Eurofirst 300 dropped 1.3 per cent, and London’s FTSE 100 fell 1.1 per cent, with industrial metal and mining shares under the cosh.

● Asian stock markets also felt the force of Wall Street’s late slide, the FTSE Asia-Pacific index retreating from an 18-month high to drop 0.7 per cent. An unexpected fall in machinery orders added extra impetus to the profit-taking in Tokyo, and the Nikkei 225 fell 1.1 per cent. Hong Kong fell 0.3 per cent and Shanghai lost 0.9 per cent as Beijing continued to drain liquidity from the market. The Bangkok stock market finally cracked in the face of rising tensions in the Thai capital. The SET index tumbled 3.9 per cent after a state of emergency was declared by the government.

● The dollar was the bully in the forex markets, though whether its advance was the result of higher interest rate expectations for the buck or haven flows as risk appetite was curtailed was not clear. The greenback added 0.3 per cent on a trade-weighted basis to 81.83 and rose 0.3 per cent versus the euro to $1.3291. The euro continued to suffer from the worries over Greece, giving ground against a broad range of peers.

● Greek sovereign debt came under further pressure, with traders apparently unconvinced Greece can manage its budget needs without recourse to its eurozone colleagues. The yield on the 10-year note rose 4 basis points to 7.17 per cent, the highest since October 1999. The spread with Bunds, which indicates the premium Athens must provide to sell its debt, hit 408 basis points.

● More highly-rated government bonds could not take advantage of the cautious mood stalking the rest of the market – usually a boon for such perceived havens. The US 10-year benchmark note could not build on the bounce it received overnight following a successful $21bn auction, and its yield rose 1 basis point to 3.87. The yield had breached 4 per cent on Monday. The Treasury will auction $13bn of 30-year bonds later.

● Gold consolidated above the $1,140 an ounce level that has proved something of a ceiling for much of 2010. Gold bugs will be particularly pleased that the precious metal has made its recent advance during a period of dollar strength, suggesting store of value and haven status characteristics are carrying greater weight. The bullion was slightly softer on Thursday, losing 0.2 per cent to $1,145, but still close to a three-month high.

● The broader commodity complex struggled as risk appetite waned. Copper, the industrial bellwether, lost 1.2 per cent to $7,853 a tonne. Oil, which had briefly breached $87 a barrel on Wednesday before succumbing to a late “risk- off” reversal, dipped another 49 cents to $85.39 http://www.ft.com/cms/s/0/dc51fa08-42ce-11df-85d6-00144feabdc0.html

123 COMMENT Germany: A shifting Weltanschauung By Quentin Peel in Berlin Published: April 7 2010 20:21 | Last updated: April 7 2010 20:21

Paymaster no more. Angela Merkel arriving at last month’s Brussels summit, The chancellor once known as ‘Mrs Europa’ won her battle with fellow European Union leaders to resist an instant bail-out for Greece When Angela Merkel first joined the government of Helmut Kohl as minister for women and youth affairs in 1991, the long-serving chancellor referred to the 37-year-old dismissively as “das Mädchen” – the girl. Deal shows Merkel has staked out strong role - Mar-26 Editorial Comment: Europe manages a wise compromise - Mar-26 Lex: Euro flip-flops - Mar-26 EU struggles to establish new economic order - Mar-28 Greek bond issue will test rescue package - Mar-26 Video: The IMF and Greece - Mar-27 Now she occupies his seat and she has a very different image. After her victorious battle in Brussels last month to resist an instant financial bail-out for Greece, the German media could not quite decide if she had become the Iron Lady, like Britain’s Margaret Thatcher, or the Iron Chancellor, in the tradition of Prussia’s Otto von Bismarck. Whichever it was, they liked it. Bild-Zeitung, the tabloid newspaper, ran a full-page mock-up of a memorial to Bismarck – who forged modern Germany from Prussia in the 19th century – with the head of Ms Merkel upon it. “No more the paymaster of Europe”, read the headline. The greatest economic power in Europe, linchpin of the eurozone, Germany is not the country it was. Since 1990 – the year of reunification – it has become significantly poorer, with a

124 lower per capita income and a lot less money to spare since pouring money into the former East Germany. It has a new geographical perspective, too, as a central European rather than west European state. Its unquestioning adherence to the Atlantic alliance is no longer unquestioned. Its passionate commitment to European integration is also different. It has a new generation of leaders who never knew the second world war. Does this mean Germany is no longer a reliable partner in the European Union and ally in Nato? Or does it just mean the country has become more normal, putting national interests first like its fellow members? HELMET KOHL ‘Merkel learnt western policy like a foreign language from him’ The man most associated with Germany’s commitment to Europe in recent decades is Helmut Kohl, chancellor for 16 years, and 80 years old last Saturday. It was Mr Kohl, a ruthless party politician, who presided over reunification. Angela Merkel, the young woman from the east, became his best political pupil. And, after a party financing scandal in his Christian Democratic Union, it was Ms Merkel who forced him into political semi-oblivion. “She is the perfect copy of Helmut Kohl,” says Professor Werner Weidenfeld of Munich university. “She learnt her western policy like a foreign language from him.” That meant she learnt the importance of forging Franco-German agreements when the two governments were most divided while also cultivating coalitions with smaller European Union members. The difference is that she is much less willing to open the national cheque book. As chancellor, Mr Kohl regularly bought political deals in Brussels with German generosity. To win agreement on the Maastricht treaty in 1992, for example, he was the lead donor to cohesion funds for Spain and Portugal. Ms Merkel is better than him at mastering complex briefs but lacks his conviction about the need for European integration, Prof Weidenfeld says. She is also a better operator at an EU level than she seems to be in Berlin. “What she is missing is the deep power infrastructure in every segment of party life,” he says. “He knew the personal connections and family history of every significant party member. She simply has not got that background or that memory.” For Ms Merkel it is a tough balancing act. She has already proved herself a good European, the ultimate deal-broker in Brussels. But now she is praised at home for standing her ground over Greece. Joschka Fischer, Germany’s pro-European former foreign minister, is appalled at the reaction to the Brussels summit. “One can hardly get one’s head round the decline in historical consciousness in our country,” he declared in the Süddeutsche Zeitung. “Neither Margaret Thatcher nor Otto von Bismarck were exactly models for Germany’s European policy, and for very good reasons. Neither had much if any conception of European integration.” The chancellor used to be praised as “Mrs Europa” for her pro-European attitude. She seemed to have reinvented herself as “Frau Germania”, he said. Mr Fischer is famously outspoken. But his accusation picks up on a theme being debated in other European capitals: has Germany lost its European vocation and abandoned its belief in

125 an “ever closer union” of member states? Either way, what sort of Europe would it like to see? “Joschka goes too far,” says Volker Perthes, director of SWP, an international affairs institute based in Berlin. “He could say Gerhard Schröder, his former boss, was the first who tried to be Herr Germania. He was the one who said Germany would not be the paymaster of Europe.” Professor Perthes, like a majority of political analysts and diplomats in Berlin questioned by this correspondent, cautions against a simplistic view of a newly selfish Germany. But the country has undoubtedly changed. “The environment is a different one,” he says. “We are not exposed on the eastern edge of western Europe. We are surrounded by a ring of friends. Germany is a bigger country, but it is also a bigger EU. What has remained is that Germany knows it needs the EU and Nato and the transatlantic relationship. The EU comes first. We know why we need it, but we are no longer prepared to be Mr Nice Guy, the big, fat paymaster, afraid of being accused of possible hegemony. “What has changed is that the concept of national interest is no longer alien to the political vocabulary that Germans use. Our friends and neighbours always suspected that we had national interests. It is more transparent if we spell them out.” One of the most senior European ambassadors to Berlin, and a long-time Germany watcher, sees the same shift from the other side of the table. “The accusation is that they will no longer put European interests above national interests,” he says. “I would like to hear of a single German chancellor who sacrificed German interests for Europe. Of course, Germany’s interest was in returning to normality via Europe. “Before the euro, the Germans never came to anyone’s help in a financial crisis. They have never compromised their national interests for the sake of Europe. They [supported European integration] because they knew it was in their national interest – now, perhaps, more than ever.” Helmut Kohl, the passionately pro-European German chancellor who presided over unification, was born in the second world war, a historian by training and inclination. Ms Merkel grew up in East Germany and trained as a physicist, analytical and pragmatic. She is pro-European by persuasion not passion. “Germany’s European conviction today is still very clear,” the ambassador says. “But it is no longer a great love. It is rather that there is no alternative. The heroic spirit has gone. It is now a matter of normality.” The questioning of Germany’s role in Europe concerns not only its position as paymaster. It also affects that other pillar of postwar identity: Nato membership and total commitment to the transatlantic relationship. A senior French diplomat once described the country’s attitude to the alliance as “more royalist than the king”. That is no longer true, says Constanze Stelzenmüller, head of the Berlin office of the German Marshall Fund. “The odd thing about Nato is that the Germans have become deeply conservative, reluctant to change,” she says. “They don’t want to change the old strategic concept. They don’t want global alliances. They think the east Europeans exaggerate the Russian threat. But they are not being very innovative themselves.” Prof Perthes does not question the commitment to Nato but sees doubts about its purpose. “They certainly don’t want to give it up,” he says. “A lot of history ties us. We owe our independence and our unity to Nato. But the threat perception has changed fundamentally.

126 “The old Nato enthusiasm you find today in Romania, Bulgaria or the Baltic republics. They want protection against Russia. They wanted to enter a cold war Nato. For Germany, that has gone. We are uneasy about the path Russia takes domestically but the fear of a Russian tank invasion is no longer there.” Nor does Germany feel easy with the concept of an expeditionary Nato fighting wars around the globe, as in Afghanistan. Popular support for German troop involvement in that war is low, and waning, although Ms Merkel has agreed to a modest reinforcement. The chancellor went to the EU summit in Brussels last month with a clear agenda: no bail-out for Greece except as a last resort. She made no effort to involve the smaller members of the eurozone in the critical negotiations, but focused entirely on getting an agreement with France in which all her preconditions would be included. Then it was presented to the rest of the group as a fait accompli. It was classic German diplomacy but with a difference: she made virtually no concessions on her initial position. AFGHANISTAN A growing number of German military casualties in the Nato and US-led campaign in Afghanistan has steadily increased domestic concerns about its forces’ role there. The latest round of soul-searching began on Good Friday after a German army unit based in the northern city of Kunduz was ambushed by the Taliban. Three soldiers died, taking the number killed in the seven-year- old mission to 39. In the ensuing skirmish, six allied Afghan soldiers were killed in friendly fire. This follows just six months after the army ordered an air strike on petrol tankers hijacked by the Taliban, killing or wounding 142 civilians, as a result of which Franz Josef Jung, then defence minister, was forced to resign. Both events have shocked a nation in which older citizens remember the horrors of the second world war and younger generations are raised with the mantra: “never again”. The ruling Christian Democrats and Free Democrats still largely back the Afghan campaign but the opposition Social Democrats are turning against a mission they helped launch when in government. Volker Rühe, defence minister in the 1990s, blames successive administrations for talking only about “armed conflict”. His term would confront the nation with something it thinks it has put behind it: “war”. Yet in Berlin, senior government officials are adamant that it was not narrow national interest that motivated her. It was a conviction that hers was the only country determined to uphold the EU treaty and the stability of the euro. Any subsidised rescue package for Greece would amount to a “bail-out”, she insisted, which would offend against the treaty. It would also fall foul of the constitutional court in Karlsruhe, the guardian of Germany’s fundamental law. The court’s judgments on the Lisbon treaty, and before it on the Maastricht treaty that laid the foundations for EU economic and monetary union, and for the launch of the euro, are an important factor behind Berlin’s insistence that its room for manoeuvre is limited. It has ruled that stability is the absolute priority for the eurozone. It also ruled that the Bundestag, as the ultimate representative of German democracy, must be more closely consulted on EU legislation. Ulrike Guérot, Berlin representative of the European Council on Foreign Relations, fears that both the court in Karlsruhe, and the Bundestag, are becoming more eurosceptic. “Germany has changed a great deal,” she says. “There is not one purpose, it is not conscious, there is no master plan. But it is happening by default.

127 “The new Bundestag [elected last September] is full of 35-year-olds who have never looked at the Maastricht treaty. The concept of ever-closer union [in the EU] has gone for large parts of the political establishment. What members of parliament care about is whether the German language is used in EU institutions. They say: ‘We put a lot of money into the EU, so why shouldn’t we speak German there?” She sees a similar trend in Karlsruhe. “The law community is the most important elite community in Germany. They have turned anti-European. The problem is not the general population. It’s the elites who no longer carry the [European] project.” On that score, she is more alarmed than most German commentators. As the representative of a generation brought up to refer to her country as the “Federal Republic” rather than “Germany”, she perceives a creeping nationalism, although she admits it is not an aggressive one. “I am not saying it’s not normal, but there’s a huge change in political perceptions.” So what sort of Europe does Germany want? It is unclear. Ms Guérot says there is a lack of strategic vision. The commitment to a United States of Europe is long gone. Mr Kohl admitted as much in 1993. Joschka Fischer says – with regret – that it means the EU will increasingly develop as a weak confederation of states, and not a close federation. Ms Merkel has not spelled out her vision in detail. But she believes Europe should argue with one voice on the world stage, and that a Europe of 500m, not a Germany of 80m, will matter most in global negotiations. It is a pragmatic choice, not an ideological one. The chancellor still sounds more ambitious than any other European leader. She wants treaty change to reinforce the stability of the eurozone. If the leaders keep using their difficulties with getting the Lisbon treaty ratified as an excuse for inaction, they will bring the EU to a halt, she says. That does not mean she believes in the European Commission as a future European government, as true European federalists once did. On that, Ms Merkel’s advisers are perfectly clear. “The member states are the masters of the treaty,” one said during the Brussels summit. “The Commission is its servant.” http://www.ft.com/cms/s/0/d84a1608-4273-11df-8c60-00144feabdc0.html

128 LEX Greece Published: April 7 2010 09:35 | Last updated: April 7 2010 18:24 Greek rescue doubts fuel yields rise - Apr-06 Greece to target US investors with bond - Apr-05 Wolfgang Münchau: Why Greece will default - Apr-04 Wolfgang Munchau: No resolution over Greece - Mar-28 French press opposes IMF bailout of Greece - Mar-29 In depth: Greek debt crisis - Mar-28 Greece may believe that last month’s potential support package from its eurozone partners and the International Monetary Fund has bought it time. But bondholders evidently want to remind Athens that it is running out of time to extinguish its €272bn debt inferno. Although traders say volumes are thin, the surge in Greece’s cost of borrowing 10-year money to almost 7.2 per cent for a second day – a yield premium of more than 400 basis points over German bunds – brings back memories of January’s catastrophe fears. Yet, as bondholders price in their ever more apocalyptic vision, other investors – who arguably have less skin in the game – took the Greek gyrations in their stride. Therein, perhaps, lies a clue as to how to treat Greece’s woes: with a level head. After all, although credit default swaps on its benchmark bond leapt to 360 basis points, they are below January’s peak. And although equities tumbled in Athens for a second day, the FTSE Eurofirst index fell only marginally. Contagion to other peripheral eurozone economies appeared to be limited too. That suggests growing recognition that Greece will be bailed out, even if the fine detail of the package – such as the headline amount available and the borrowing rate – has yet to be thrashed out. Nor has support from the European Central Bank, which daily acts as a lender of last resort to Greece’s banks, diminished. It even amended its definition of qualifying collateral. However, given its need to raise about another €35bn of debt this year, bond investors have a point and Athens should heed it. It cannot afford to keep rolling over debt at junk-like rates of over 7 per cent. With a debt-to-GDP ratio approaching 120 per cent, notes Barclays Capital, debt sustainability plays a crucial role. There must be no let-up from the fiscal adjustment already planned, however unpopular politically. But, increasingly, early recourse to the potential bailout facility looks like Athens’ only way of pulling Greece out of its grim debt spiral. http://www.ft.com/cms/s/3/6b132c8a-4220-11df- 9ac4-00144feabdc0.html

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COLUMNISTS Short View: Greek contagion By Aline van Duyn, US markets editor Published: April 7 2010 18:57 | Last updated: April 7 2010 18:57 Losing 8 per cent on an investment in just over a week is a miserable experience. But that is what has happened to the buyers of €5bn of bonds sold by Greece on March 29. On Wednesday, the prices on those bonds fell further, with traders quoting the seven-year bonds at 92 cents on the euro. The plunge in prices on Greek debt – and the concurrent surge in yields – shows no signs of abating. Greece has struggled to contain speculation that it may default on its debts and it has so far failed to map a credible strategy to tackle its budget deficit. Uncertainty looms about the terms and viability of a European Union rescue plan, or one from the International Monetary Fund. Capital flight squeezes Greek banks - Apr-07 Lex: Greece - Apr-07 Comment: Why rescue isn’t going to plan - Apr-07 Europe urged to focus on real economy - Apr-07 In depth: Greek debt crisis - Mar-28 Eurozone recovery stalled at end of last year - Apr-07 The renewed concerns about Greece have not, however, caused knock-on jitters on Portuguese or Spanish bonds. This is a marked departure from previous bouts of Greek default fears. The path of Portuguese and Spanish spreads is key – the contagion effects of the Greek crisis are high on people’s worry lists. A few days of steady spreads is not enough to quash contagion worries, but if this persists it will encourage risk appetite. Other spreads are also worth watching. Greek officials are preparing to travel to the US in an effort to borrow up to $10bn. With Greek yields vastly outstripping most emerging market dollar bond yields, the idea is that some emerging market and distressed debt investors will be tempted by Greek dollar bonds. Were this the case, investors would be expected to start making room by lightening their holdings of Mexican or Brazilian dollar bonds. Spreads on these bonds would probably widen. So far, there has been no hint of this. Indeed, the spreads on Brazil and Mexico dollar debt have tightened this week. High yields will not be enough to persuade emerging market investors to buy Greek bonds, especially after the performance of its most recent euro deal. www.ft.com/shortview http://www.ft.com/cms/s/0/d449047c-426b-11df-8c60-00144feabdc0.html

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Europe urged to focus on real economy By Vincent Boland in Milan Published: April 7 2010 17:49 | Last updated: April 7 2010 17:49 Europe’s failure to focus on the real economy as it seeks to avoid fiscal meltdown in Greece could do long-term damage to the eurozone’s industrial sector, the head of Italy’s employers’ federation has warned. Emma Marcegaglia, president of Confindustria, said the eurozone would only return to sustainable long-term growth if it focused as much attention on infrastructure, research and development, sustainability and energy security as it was doing on “the balance sheets of states”. Editorial: Europe must rebalance - Mar-15 Late payments hit small companies - Mar-24 Eurozone job numbers continue to fall - Mar-16 Wolfgang Münchau: The euro will keep falling - Mar-07 Europe’s SMEs face funding difficulties - Feb-16 European bond tensions hurt lending - Feb-15 She warned that the European Commission and European Central Bank were too focused on monetary policy. That risked putting the gains of monetary union in danger because the industrial economy in parts of the eurozone had lost competitiveness and export markets and needed more attention from policymakers. “The eurozone needs not only monetary union but also a common industrial union,” Ms Marcegaglia said. “If it cares only about debt and not about all the other things, then of course at the end all the weaker parts [of the eurozone economy] will become a problem.” Confindustria wants the European Union to be able to issue euro-denominated bonds to pay for pan-European infrastructure and investment in research and development. “Europe needs to be more concrete and pragmatic and to understand the needs of companies more,” she said. Her comments reflect anxiety in Italy about the economy’s sluggishness, high public debt, and what many industrialists say is declining competitiveness. Moody’s Investors Service, the credit rating agency, warned last week that Italy’s low-growth economy “is not conducive to the government’s ability to grow out of its high public debt ratios”, a factor that would test its fiscal adjustment capacity. http://www.ft.com/cms/s/0/518f7ece-4263-11df-8c60-00144feabdc0.html

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Revamped ECB Lending Rules May Give Greece More Pain Than Gain By Frances Robinson

Last Updated: April 7, 2010 19:00 EDT April 8 (Bloomberg) -- The European Central Bank’s decision to change its lending rules may end up hurting debt-laden Greece more than helping it. While President Jean-Claude Trichet last month assisted Greece by extending the ECB’s emergency collateral rules into next year, the move may come at a cost. The new framework will make it more expensive for banks to exchange Greek bonds for central bank funds because of their lower credit rating. Since the ECB loosened its rules during the financial crisis, two of the three main ratings firms have cut Greece’s rating below the minimum required under the old regime. “There’s now hardly any chance of Greek debt becoming ineligible at the ECB,” said Nick Kounis, chief European economist at Fortis Bank Nederland NV in Amsterdam. “But the new collateral system will certainly be less favorable to countries with lower ratings, especially Greece.” The ECB’s Governing Council meets today as Greece’s fiscal crisis shows no sign of abating. The extra yield investors demand to hold Greek 10-year bonds instead of Germany’s yesterday soared to the highest since the euro was introduced in 1999. That’s complicating the ECB’s efforts to withdraw emergency stimulus measures used to nurse the euro-region economy through its worst recession since World War II. All 62 economists surveyed by Bloomberg News expect the ECB to keep its benchmark interest rate at a record low of 1 percent. It announces the decision at 1:45 p.m. in Frankfurt and Trichet briefs reporters 45 minutes later. Graded Haircuts Trichet has promised to reveal details of the bank’s new collateral framework, which includes a proposed “graded haircut schedule.” A haircut is the risk premium central banks apply to securities they accept as collateral against loans. A 10 percent haircut on an asset means the central bank would lend commercial banks 90 percent of its value. The ECB is proposing to apply bigger haircuts to assets with lower

132 credit ratings. Had the ECB stuck to its plan to revert to pre-crisis rules at the end of the year, Greek bonds would have become ineligible in refinancing operations in the event of Moody’s Investors Service cutting its rating two notches to a level comparable with other agencies. Greece is rated A2 at Moody’s, while Standard & Poor’s and Fitch Ratings both have a BBB+ rating on the country’s debt. ‘Poor Collateral’ “Soon, due to its poor credit rating, Greek debt will be treated like poor collateral, so banks will no longer be able to borrow as much with Greek debt as collateral,” Simon Johnson, Professor of Finance at the Massachusetts Institute of Technology and a former International Monetary Fund chief economist, wrote in the Huffington Post yesterday. “When these changes at the ECB come into effect in 2011, the days of Greece being able to borrow easily at low interest rates in the euro zone will close once and for all.” Greece is struggling to cut its budget deficit from 12.7 percent of gross domestic product, prompting investors to dump Greek assets amid speculation the country could default on its debts. The spread between Greek 10-year bonds and the German equivalents rose to 407 basis points yesterday. The average gap over the past decade was 34 basis points. Concerns about the country’s creditworthiness have affected the bonds of Spain and Portugal, whose budget deficits have also ballooned. Some economists say the ECB will be wary of tightening lending rules for countries that are struggling to convince investors they can cut their budget shortfalls. Helping Hand “You don’t want to kill these guys while they’re struggling to put the house back in order,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London. “Pre- announcing the collateral rule changes clearly suggests they are working toward helping countries which are struggling with fiscal consolidation.” Laurent Bilke, a former ECB economist now with Nomura International Plc in London, said the ECB could “sterilize” the haircut changes by lowering the premiums determined by other criteria, such as maturity. “To avoid penalizing Greek government bonds excessively, we see only small scope for a hawkish outcome in which haircuts are broadly increased from current levels,” he said. Greece needs to raise 11.6 billion euros in funding by the end of May to meet debt repayments coming due in the next two months, and will need to raise another 20 billion euros ($27 billion) by the end of the year to finance its deficit. Tighter ECB collateral rules would make that borrowing more expensive, said Erik Nielsen, chief European economist at Goldman Sachs Group Inc. in London. “As Greece will continue to need its banks for roll-overs and deficit financing, the cost of providing that financing is almost certain to go up,” he wrote in a note to clients. “Probably unintentionally,” the ECB’s new rules “may be very painful for Greece and its banks.” To contact the reporter on this story: Frances Robinson in Frankfurt at [email protected] http://www.bloomberg.com/apps/news?pid=20601085&sid=a.HOp4uByo7Y#

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08.04.2010 The real case for fiscal integration By: Laurence Boone

Seven years are supposed to be critical for a wedding; it will be ten years for the common currency. Two issues are at the centre of the current frictions across the euro area. There is a short-term issue, related to fiscal difficulties, and there is a longer term issue which is related to “euro imbalances”. In effect, both ask the same question, one that policy makers would rather avoid: more fiscal integration or not? The answer lies with the expected gain from further integration. On the short-term side, the financial difficulties of Greece have exposed divergences of views within the union. On the one hand, virtuous countries would not like to pay for Greece amd would rather see Greece pay the price of previous fiscal profligacy. Should Greece fail to adjust, either because the adjustment is too demanding or because it does not want to proceed through a painful adjustment, the country would thus have to default or reschedule its debt. It is interesting to see from past programmes of the International Monetary Fund over the past 20 years that they are a lot more indulgent than those of the EU. The IMF has a strict and transparent process for setting-up the conditions of assistance, in terms of interest rate, amount, and time period. The IMF interest rate for loan would be benign: from 1.25% to 4.25% depending on the tranches of money being lent and the length of the loan, typically from 3 to 5 years. The amount is expressed in terms of quotas at the IMF, but the IMF has proved flexible enough to go well over the defined amount when necessary. In addition, the IMF has the means to finance Greece over the next couple of years, especially assuming that the IMF presence would ease the costs of adjustment, as Greece’s monitored adjustment would imply a rapid decline in its funding needs. In this scenario, there is little need for further integration. On the other hand, some euro member countries or actors seem to think that the euro area is an entity beyond EMU, a political entity, and as such should be able to deal with such issues. As a result, the IMF should not necessarily be called to deal with an internal problem, but fiscal transfers would be allowed – or not - by fellow euro members - a bit like Switzerland, the United States or any other federation. In practice, however, federations tend to be more

134 politically integrated. For example in the United States, the general government finances can be equally split between federal, state and the local levels, implying a more fiscal transfers and integration than in the euro area. So, even when defaulting on its local debt, a US State is still benefiting from federal transfers. Swiss cantons are not allowed to be in disequilibrium either. From this angle, fiscal integration thus means more money in a common pot through higher transfers, and less sovereignty within the state. The idea of bilateral loans, the European Monetary Fund or a common debt agency reflects the idea that there should be more fiscal integration across euro countries. Indeed, the “fathers” of the EMF reckon it would require a budget at least equivalent to the current EU budget, while a common debt agency, as suggested by the Belgium prime minister, would imply some form of fiscal solidarity and thus transfers. Accordingly, there would be a supra-national entity that would then ensure that “federal” fiscal measures are enforced. In this scenario, the economic gains consist of lower interest rates as a result of the solidarity but also from higher transfers across member states that would smooth business cycle fluctuations. In the longer-term, there is a similar dilemma regarding structural policies. On the one hand, wage restraint and fiscal restraint would bring competitive advantages and savings for the future. On the other hand, some argue that if all euro countries were to behave this way, the result would be deflation and depression, as there would be no internal demand growth any more. This argument is fallacious: although intra-euro area trade has reached a high point, euro countries still trade goods, services and capital with the rest of the world. The euro area countries’ share of trade with the reste of the world, in terms of gross domestic product, is 30%, and the EU is the first exporter and importer of goods and services worldwide, excluding internal trade. As a result, current account imbalances do not need to be solved within the euro area, as Charles Wyplosz has recently argued. On the other hand, Germany would benefit from increased demand for its products from its euro partners, should it manage to exit more quickly from both the fiscal trap and from the growth trap. However, this is neither an argument for undoing Germany’s competitiveness gains, nor against fiscal virtue. It is an argument for coordinating fiscal exit strategies. This, in turn, would be a good economic argument for further fiscal integration. The author is chief economist for France at Barclays Capital. http://www.eurointelligence.com/article.581+M50912c5c718.0.html#

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Growth seen easing back slightly in US, Europe and Japan in first half of 2010

The pickup in activity seen in the G7 countries in the last quarter of 2009 is expected to ease back in the first half of this year, according to the OECD’s latest Interim Economic Assessment.

Gross domestic product (GDP) is likely to grow faster in the US than in Japan and the three largest euro area countries – Germany, France and Italy - but will remain generally fragile as inventory destocking by businesses and the ending of some fiscal stimulus measures weighs on activity. Consumer and business demand is likely to suffer from sluggish credit growth and difficult labour market conditions.

Based on the most recent data, the OECD short-term forecasting models show that US GDP is expected to rise by 2.4% and 2.3% in first and second quarters this year. The combined GDP of the three largest countries in the euro area is projected to grow at 1.9% in the second quarter after 0.9% in the first three months of the year. In Japan, GDP growth is forecast at 2.3% in the second quarter of 2010 after 1.1% in the first. Fourth quarter 2009 GDP grew by 5.6% in the US; by 0.4% in the three largest countries of the euro area and by 3.8% in Japan.

Presenting the Interim Economic Assessment for G7 countries, OECD Chief Economist Pier Carlo Padoan said: “Although we are seeing some encouraging signs of stronger activity, the fragility of the recovery, a frail labour market and possible headwinds coming from financial markets underscore the need for caution in the removal of policy support.”

Mr Padoan said financial conditions have improved considerably. Despite their improved capital positions, banks, however, remain vulnerable to credit losses.

He added that the unemployment rate has edged down in the United States and Japan and may well have peaked in the euro area. http://www.oecd.org/document/59/0,3343,en_2649_34109_44929339_1_1_1_1,00&&en- USS_01DBC.html

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OECD Economic Outlook: interim assessment, April 2010 Recent high-frequency indicators point to a continued recovery of the world economy, albeit at variable speeds across countries and regions. • What is the economic outlook for OECD countries? An interim assessment (Handout for journalists)

OECD countries have benefited through trade linkages from strong activity growth in the large emerging-market economies, including China, India and Brazil.

Industrial production is bouncing back strongly Year-on-year percentage changes

Note: Data for China are OECD estimates. Seasonally adjusted series for Brazil and China. Source: Datastream

Following a sharp narrowing during the recession, global imbalances have widened somewhat as activity has picked up. Large external imbalances remain within the euro area.

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Is a new pattern of global imbalances emerging? Current account balance, in per cent of GDP

Source: OECD, Quarterly National Accounts database; and OECD, Main Economic Indicators database.

As for fiscal policy, the sharp increase in government indebtedness in the OECD area during the downturn calls for ambitious, clearly communicated medium-term consolidation programmes in many countries. Consolidation should start in 2011, or earlier where needed, and progress gradually so as not to undermine the incipient recovery.

Public finances have weakened significantly General government balance, in per cent of GDP

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Note: Government balance for 2009 is an estimate for some countries. Countries are ranked according to the government balance in 2009. 1. Mainland Norway only. Source: OECD, System of National Accounts database; and OECD Economic Outlook 86 database. http://www.oecd.org/document/59/0,3343,en_2649_34109_44929339_1_1_1_37443,00.html

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07.04.2010 Greek funding situation turns critical

The main eurozone news and commentary over the Easter period concerned Greece. The most important development is that rise in the spread with German bonds from about 300 to 400bp, as financial markets are becoming increasingly concerned about the country’s ability to pull through the crisis. The FT reports that Greek 10-year bond yields hit a high of 7.161%, but closed just below 7%. Yields on two-year bond went up by more than 1.2% a high of 6.48%, which the FT says is an extreme single-day move for any sovereign debt. It reflects market uncertainty that the default probability within the next two years is rising. Greece has covered its funding for April, but needs to borrow another €10bn in May. The FT also reports that the European Commission is expected a deteriorating macro outlook in its May forecasts – of a 2.5% fall in GDP, against an expected 2%. Revised Eurostat estimates will show the 2009 budget deficit as exceed 13% of GDP. One reason for the rise in the bond yields are reports of a strong difference of views between Germany and the other euro area members of which interest rate to apply to a rescue package. The Germans are indeed insisting on market rates – which effectively means no subsidy at all. The FT reports that most euro area member states would be ready to offer loans with rates of 4-4.5%, the rate currently paid by Ireland and Portugal. But Germany insists on 6 to 6.5%. The only relief Greece can expect is from the IMF’s standby arrangement, which should allow Greece to borrow at rates of between 1.25% and 3.25%. The maximum possible funding ceiling is €30bn, with the IMF to contribute no more than one third. In another development, Greece has now decided to tap the US market to raise further capital, as European investors are becoming increasingly sceptical. Bloomberg reports that Greece is likely to receive a lukewarm reception in the US, where investors are likely to demand a 7.25% yield for Greek 10-year dollar bonds, 410 basis points more than bunds. The Greek public debt management agency is preparing a road show in the US a head of a sale of as much as $10bn in new bonds. Bloomberg also noted that at a spread of 400 bp over US Treasuries, Greece would be selling debt at a yield premium similar to those demanded from junk bond issures like the home- shopping channel QVC.

140 Greek deputy PM: The Germans are racists Greek deputy PM Theodoros Pangalos complained that Germany in particular took a moral interpretation to the Greek crisis. In an interview with a Portuguese newspaper, he said (our translation): “Why do the Greeks have problems? Because of a good climate, because of music, drinks, and due to the fact that they are not as serious as the Germans... This a moralising viewpoint, racist even, that does not correspond to the reality.” Le Monde reports that there was no comment from the German government. Munchau on why Greece will default In his FT column Wolfgang Munchau argued that Greek will eventually default, though not this year. The reason is a debt dynamic so severe that, without a bailout, there is no chance that even the toughest restructuring effort could succeed. In the past, adjustments of such magnitude were achieve only by countries that benefitted a devaluation. Five things can now happen to resolve the situation: A massive global and eurozone economic boom (unlikely); cheap loans (ruled out by Germany), private sector debt restructuring (possible, but probably not sufficient on its own), Greece leaving the eurozone (not a sensible choice for Athens, nor a legally policy policy option for the others), and default. Munchau says default is the only option that is consistent with what we know. Delpla on debt deflation in southern Europe Writing in Les Echos, Jacques Delpla makes the point that one forgotten aspect of the Greek crisis is the level of private debt in Greece, Spain and Portugal, where annual external deficits are exceeding 10% of GDP. He invokes Fisher’s debt deflation theory that the combination of private-sector debt deleveraging and disinflation/deflation could prompt a vicious circle. During the good years 1998/2007 the borrowed at 5%, while nominal GDP growth at 5% in Greece and 8% in Portugal. The rise in indebtedness was thus painless. While wage costs rose by 2% in Germany during the 1998 and 2008 period, they went up by 20% in the euro area average, 41% in Spain and 45% in Greece. http://www.eurointelligence.com/article.581+M5967b113ecc.0.html#

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Why the Greek rescue isn’t going to plan By Mohamed El-Erian Published: April 7 2010 15:53 | Last updated: April 7 2010 15:53 It should be apparent to all by now: despite the rhetoric out of some European capitals, the Greek rescue package is not going according to plan. The triumphant Greece/European Union/International Monetary Fund announcement of a couple of weeks ago has not calmed markets, nor has it lowered Greek borrowing costs. In fact, market measures of risk signal more concern today than before the announcement. In depth: Greek debt crisis - Mar-28 Greek rescue doubts fuel yields rise - Apr-06 Greece to target US investors with bond - Apr-05 German stand on loan rates to Greece - Apr-05 Meanwhile, worries are mounting about the health of the Greek banking system, raising the spectre of disorderly outflows of deposits. Society is not buying into the government’s adjustment plan. And the EU/IMF external financing package lacks the operational clarity that is required in these circumstances. Veterans of past sovereign debt crises will not be particularly surprised by this turn of events. As illustrated by Mexico in 1995 and Korea in 1997, among many others, complicated sovereign rescue packages often have to be re-opened. In some cases, such as Russia in 1998 and Argentina in 2001, the packages never succeed in getting ahead of deteriorating debt dynamics. Unfortunately, it is likely that things will get worse for Greece before they get better. In the short run, the persistence of alarming risk spreads will lead to even more cautious behaviour among depositors and investors. Late movers will sell Greek assets rather than buy, putting even greater pressure on the government’s ability to raise sustainable funding for its forthcoming debt maturities in May. Against this background, we should expect an intensification of the European blame game in the weeks ahead. Greece will complain about the lack of meaningful support from its European neighbours. They, in turn, will point the finger right back, noting the urgent need for Greek austerity. And the IMF will be pulled in all directions, including by those hoping that the institution can engineer an immaculate recovery for Greece. Ironically, the major issues in this complex case can be summarised by a relatively simple observation: that the solution to Greece’s problems is undermined by the inability of the major players credibly to commit to the required high level of co-ordination and trust. The Greek government is having difficulty convincing its people of the magnitude of the country’s problems and the required internal adjustments. As a result, Greece is unable to provide sufficient assurances to its creditors, thereby further complicating an already tough situation. This accentuates the hesitancy of exceptional financiers, such as Germany, who resist having to again pay the bill after others have partied. And without exceptional financing, the Greek government finds it even more difficult to embark on an adjustment program that relies on only one instrument – that of fiscal austerity.

142 It is a classic co-ordination failure in game theory. Any first mover will become worse off. Indeed, it is in the interest of any single party to wait for others to move first. As a result, no meaningful progress is made, the problems fester, and the risks of a disorderly outcome increase. Buoyed by a cyclical recovery, markets around the world have yet to recognise the complexity of this situation. When they do, it will also become apparent that Greece is part of a wider, and historically unfamiliar phenomenon – that of a simultaneous and large disruption to the balance sheet of many industrial countries. Tighten your seat belts. Mohamed El-Erian is chief executive and co-chief investment officer of Pimco http://www.ft.com/cms/s/0/c2709314-4252-11df-9ac4-00144feabdc0.html

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Greek rescue doubts fuel yields rise By Jennifer Hughes in London and Kerin Hope in Athens Published: April 6 2010 19:04 | Last updated: April 6 2010 19:04 Greece’s borrowing costs rose to a record high on Tuesday amid concern in financial markets over the differences between eurozone countries on the details of any rescue. The interest rate premium Athens pays over benchmark German bonds rose to more than 4 percentage points, its highest level since Greece joined the eurozone. Greece to target US investors with bond - Apr-05 German stand on loan rates to Greece - Apr-05 Greek worries bring risk rally to a halt - Apr-06 In depth: Greek debt crisis - Mar-28 Greek 10-year borrowing costs touched a high of 7.161 per cent, up more than half a percentage point on the day, before closing at 6.995 per cent. The eurozone and the International Monetary Fund agreed last month on the principles of an emergency loans package for Greece, should it be needed. But differences emerged on Tuesday over how much Athens should pay for the support. While many countries are prepared to offer funds at rates substantially below market levels, Germany has demanded that Greece pay current market rates. Yields on two-year Greek paper jumped more than 1.2 percentage points to a high of 6.48 per cent, an extreme single-day move for any sovereign debt. The move was attributed in part to thin trading, but dealers warned that fears about Greece’s ability to borrow risked becoming self-fulfilling should the market volatility continue. Greece has covered its April funding, but needs to borrow another €10bn ($13.4bn) in May, according to the country’s Public Debt Management Agency. “It is very difficult to price new issuance when the movements in the secondary market are so savage,” said Gary Jenkins, head of fixed income research at Evolution Securities. ” He called the situation a “poker game” between financial markets and the European Union, with investors demanding to see the precise terms of support for Greece. One senior Greek banker said: “The issue of a European Union bailout looms large, but it doesn’t provide comfort because details are still lacking.” A worsening macro-economic outlook is adding to Greece’s problems. The European Commission’s May forecast is expected to show the Greek economy shrinking this year by 2.5 per cent, against projections of a 2 per cent contraction. Revised figures due to be announced this month by Eurostat, the EU statistical service, will show the 2009 budget deficit exceeded 13 per cent of gross domestic product. This compares with the earlier figure of 12.7 per cent which was used as the basis for this year’s budget projections. A finance ministry official said Greece was still on track to reduce this year’s deficit to 8.7 per cent of GDP. http://www.ft.com/cms/s/0/2403d946-41a5-11df-865a-00144feabdc0.html

144 COLUMNISTS Greece will default, but not this year By Wolfgang Münchau Published: April 4 2010 19:14 | Last updated: April 4 2010 19:14 I am willing to risk two predictions. The first is that Greece will not default this year. The second is that Greece will default. The Greek government has demonstrated that it can still borrow at a rate of about 6 per cent but if you do the maths on the public debt dynamics, as I did recently, it would be hard to arrive at any other scenario than an eventual default. The adjustment effort needed to prevent a debt explosion is extremely large. The Nordic countries achieved adjustment on a similar scale during the 1980s and 1990s, but they had two advantages over Greece. They did it in a different global environment; but more crucially they were, in part, able to devalue and improve their competitiveness. As a member of a large monetary union Greece can improve its competitiveness only through relative disinflation against the eurozone average, which in effect means through deflation. But as the French economist Jacques Delpla* has pointed out, this will invariably produce a debt-deflation dynamic in the Greek private sector of the kind described by the economist Irving Fisher during the 1930s. So Greece will not only have to make an extremely large public sector deficit reduction effort but it will also have to do this under a condition of disinflation, and possibly deflation, which would push its nominal growth rate to negative levels during the adjustment period. That, in turn, would jeopardise the debt reduction programme of both the public and private sectors. Under those circumstances, there is no way that Greece could ever stabilise its debt-to-gross domestic product ratio, no matter how hard the government of George Papandreou tries. To get out of this mess, one of five things will have to happen. The first, and most optimistic, solution would be a significant fall in the euro’s exchange rate, say to parity with the US dollar, coupled with a strong recovery in the eurozone. This might just do the trick to sustain Greek growth as it adjusts. The second is that Greece gets access to low interest rate loans from the European Union and the International Monetary Fund. The third would be a private sector debt restructuring to prevent a Fisher-style debt-deflation dynamic. The fourth is that Greece leaves the eurozone. The fifth is default. If you go through the options one by one, you realise that the first is improbable. The EU has in effect ruled out the second. The third would require an unlikely additional bail-out of the European banks. While option four would be most convenient for the Germans, the Greeks are not so stupid as to leave the eurozone. That leaves them with option five: to default inside the eurozone. It is the only option that is consistent with what we know. But it would throw the eurozone into a potentially terminal crisis. Spain and Portugal have problems of a different kind but of a similar dimension. Spain will have to go through a disinflation/deflation period that will produce a formidable private sector debt-deflation spiral. Without devaluation, or the possibility of a sustained fiscal boost, the Spanish depression could last forever, or at least for as long as the country stays in the monetary union. Portugal, like Greece, suffers from a combined public and private sector debt problem. When a country such as Greece pays 300 basis points over the yield of a supposed risk-free bond, this means, mathematically, that investors see a probability of around 17 per cent that

145 they will lose 17 per cent of their investment. So in other words, a spread of 300 basis points is a valuation in which default is still considered improbable. If those perceptions changed from improbable to, say, moderately probable, the yield spreads between southern European countries and Germany would explode. For the time being, Greece can get by because of its excellent debt management, which is why I am confident that Greece is not going to need an immediate bail-out. But given the political economy of the EU, this might turn out to be a disadvantage. Europe’s complacent leaders will only step in if a crisis is both imminent and visible. The really treacherous aspect about the Greek crisis is that the country’s liquidity position is better than its solvency position. Insolvency is a gradual, invisible process. The negative effects of debt-deflation dynamics have not yet begun, but will become inevitable as the Greek public and private sectors go through a simultaneous debt reduction process. In such an environment my assumption of a 2 per cent rate of nominal growth might be far too optimistic. And even with such an unrealistically optimistic assumption, default would be hard to avoid. There have only ever been two intellectually honest views about economic and monetary union. The first is that it could not work, as it would eventually produce a situation in which a country’s national interest conflicts with the interest of the monetary union at large. The second is that it could work, but only for as long as member states are ready to co-ordinate economic policy in the short run, and move towards a minimally sufficient fiscal union in the long run. The message from the EU, and from Germany in particular, is that the latter has now been ruled out. *Il est urgent de lutter contre la déflation par la dette en Europe du Sud, www.lesechos.fr http://www.ft.com/cms/s/0/372886dc-400d-11df-8d23-00144feabdc0.html

JACQUES DELPLA Il est urgent de lutter contre la déflation par la dette en Europe du Sud [ 31/03/10 ] JACQUES DELPLA EST MEMBRE DU CONSEIL D'ANALYSE ÉCONOMIQUE. Le sauvetage de la dette publique de la Grèce par le FMI et l'Union européenne oublie un aspect majeur de la crise : l'excès de dette privée. Pour que la Grèce, l'Espagne et le Portugal restent durablement dans la zone euro, ils devront rétablir leur compétitivité et réduire leurs déficits commerciaux insoutenables, ce qui implique la récession, la baisse des salaires et des prix. Et la réduction des dettes privées. En 1933, le grand économiste Irving Fisher, dans son célèbre article : « The Debt Deflation Theory of Great Depressions », paru dans la revue « Econometrica », expliquait que, dans une économie en récession et en déflation, la bulle de crédit héritée du boom transformait la récession en dépression. Avec la récession-déflation, les firmes sont étranglées par les dettes élevées contractées en période de boom et restées stables en termes nominaux. Prises à la gorge par le poids réel croissant du service de leur dette, elles font faillite, ce qui se répercute

146 sur les banques, leurs fournisseurs et le chômage. La « debt deflation » transforme une récession temporaire en grande dépression. Du temps de Fisher, la solution vint en janvier 1934 : Roosevelt lutta contre la déflation en dévaluant le dollar de 60 % par rapport à l'or ! Revenons à la Grèce, l'Espagne et le Portugal. Ils avaient des déficits courants de 10 % du PIB ou plus, liés à des déficits publics et privés (Portugal et Grèce) ou privés (Espagne, avec la bulle immobilière). De 1998 à 2007, ils empruntaient à 5 %, alors que leur PIB nominal croissait de 5 % au Portugal et de 8 % par an en Espagne et en Grèce. L'endettement était indolore et augmentait les niveaux de vie. Une surchauffe en résulta. De 1998 à 2008, les coûts salariaux unitaires ont augmenté de 2 % en Allemagne, de 20 % en France et dans la zone euro, mais de 41 % en Espagne et 45 % en Grèce. Aujourd'hui, il faut rétropédaler. Pour atteindre le niveau de compétitivité de la France, l'Espagne doit baisser ses coûts salariaux de 20 % et la Grèce de 25 %, sinon les prêteurs privés internationaux risquent d'arrêter subitement de prêter. Au pis, les populations refuseront cet ajustement brutal de leur niveau de vie ainsi que les réformes radicales associées. Le défaut sur leur dette publique et privée serait alors inévitable, ainsi qu'une sortie de ces pays de la zone euro. Les conséquences seraient dramatiques pour leurs populations avec une récession majeure (causée par la réduction instantanée des déficits publics et extérieurs) et une faillite généralisée de leurs banques. Au mieux, cet ajustement sera étalé sur plusieurs années (avec l'aide du FMI et de l'Union européenne), avec quand même une longue stagnation et une déflation des salaires et des prix. Le choix est donc entre chute verticale et toboggan. Dans tous les cas, le poids de la dette, libellée en euros, va augmenter par rapport au PIB (effet renforcé par l'augmentation des primes de risque sur ces pays). L'aide internationale permettra d'étaler le poids de la dette publique. Pour la dette privée, le scénario de « debt deflation » demeure. Où est la sortie ? Sachant que la Banque centrale européenne maintiendra l'inflation à 2 %, que l'aide internationale ne viendra pas au secours des dettes privées, une seule option s'ouvre. Il est urgent d'organiser la restructuration des dettes privées des pays frappés. Ces derniers devraient changer leurs lois afin de pouvoir rapidement transformer leurs dettes privées excessives en fonds propres (actions), notamment dans les banques (convertir la dette bancaire subordonnée en actions), ou bien imposer de jure des abandons de créances significatifs (entre le tiers et la moitié du montant). L'impact sera négatif pour les créanciers des secteurs privés de ces pays, banquiers et assureurs européens. Mais ceux-ci ont en un sens déjà perdu leurs investissements : ceux qui furent assez insouciants pour prêter lors d'une gigantesque bulle de crédit doivent partager l'ajustement. Plutôt que la « debt deflation » de 1932, les gouvernements européens devraient réaliser que la restructuration des dettes privées dans les pays « cigales » est inévitable. Mieux vaut l'organiser que la subir. Bien sûr, banquiers et assureurs européens vont s'étrangler à la lecture de ces lignes. Mais ils devront s'y faire et ne s'en prendre qu'à eux-mêmes pour avoir trop prêter, sans contrôle adéquat, à des « cigales ». http://www.lesechos.fr/info/analyses/020448000338-il-est-urgent-de-lutter-contre-la- deflation-par-la-dette-en-europe-du-sud.htm

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Zone euro : la croissance en panne d'investissement au 4e trimestre 2009 [ 07/04/10 - 13H53 - Reuters ] par Jan Strupczewski BRUXELLES, 7 avril (Reuters) - La croissance économique a connu un coup d'arrêt dans la zone euro au quatrième trimestre, l'investissement s'étant révélé plus faible que prévu, selon les chiffres révisés publiés par Eurostat mercredi, ce qui atteste de la fragilité de la reprise,. Le produit intérieur brut (PIB) des 16 pays utilisant l'euro est resté stable durant les trois derniers mois de 2009 par rapport aux trois mois précédents, alors qu'une croissance de 0,1% avait été annoncée en première estimation. En variation annuelle, le PIB s'est contracté de 2,2%, soit un peu plus que les 2,1% initialement annoncés. "C'est un peu décevant", a réagi Jürgen Michels, économiste de Citigroup. "C'est surtout à cause d'une révision à la baisse de la formation brute de capital fixe et cette révision à la baisse prend sans doute en compte le fait que nous ayons eu plus de données de l'Irlande et d'autres endroits qui ont été bien faibles". Le résultat global de la zone euro s'explique aussi par une contraction plus forte que prévu précédemment en Italie, de 0,3% au lieu de 0,2% d'un trimestre sur l'autre. "Le ralentissement marqué de la croissance de la zone euro au quatrième trimestre de 2009 est pour l'essentiel la conséquence d'une stagnation de l'économie allemande et d'une nouvelle contraction en Italie", constate Howard Archer (IHS Global Insight). "La stagnation en Allemagne et la nouvelle contraction en Italie ont été en partie contrebalancées par la croissance du PIB française qui s'est accélérée de façon notable à 0,6% trimestriellement", ajoute-t-il. Aux Pays-Bas, la croissance a été finalement de 0,2% et non pas de 0,3% comme le donnait la première estimation. Le Portugal, dont le PIB stagnait en première estimation, se retrouve finalement avec une contraction de 0,2%. Seule la croissance des exportations et des stocks a empêché la zone euro de subir une contraction en rythme trimestriel, la contribution de l'Etat et des ménages ayant été nulles. La contribution des stocks à la croissance a été de 0,1 point et la contribution nette des échanges commerciaux de 0,2 point. L'investissement privé s'est contracté de 0,3% d'un trimestre sur l'autre, soit plus que la baisse de 0,2% attendue. (Wilfrid Exbrayat pour le service français) http://www.lesechos.fr/info/inter/reuters_00243099-zone-euro-la-croissance-en-panne-d- investissement-au-4e-trimestre-2009.htm

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G7 : la reprise est plus dynamique aux Etats-Unis que dans la zone euro [ 07/04/10 - 12H10 - AFP ] La reprise est bien au rendez-vous dans les pays industrialisés, mais elle est plus dynamique aux Etats-Unis que dans la zone euro, l'Allemagne étant le seul Etat du G7 à enregistrer un recul du PIB en rythme annuel au 1er trimestre 2010, selon les dernières prévisions de l'OCDE. "La reprise est engagée à des vitesses différentes d'une région à l'autre", a déclaré le chef économiste de l'Organisation de coopération et de développement économiques (OCDE) Pier Carlo Padoan en présentant, lors d'une conférence de presse à Paris, ses prévisions pour le premier semestre de cette année. Le rebond, après la plus grave récession depuis l'après-guerre, est "plus rapide aux Etats-Unis, au Canada et au Japon" et "moins rapide dans les pays européens", a-t-il ajouté, tout en qualifiant la situation de "relativement encourageante". Selon ses prévisions, le produit intérieur brut (PIB) des Etats-Unis devrait augmenter de 2,4% en rythme annuel au premier trimestre et de 2,3% au deuxième trimestre. C'est une croissance moins forte que celle du dernier trimestre de 2009 (+5,6%), mais plus vigoureuse que celle attendue dans la plupart des autres pays. Le PIB cumulé de l'Allemagne, de la France et de l'Italie devrait ainsi progresser de 0,9% au premier trimestre puis de 1,9% au deuxième, après +0,4% fin 2009, a affirmé l'organisation qui réunit les pays les plus riches de la planète. L'Allemagne est le seul pays du G7 dont le PIB devrait avoir reculé au premier trimestre, de 0,4% en rythme annuel, même s'il devrait renouer avec une croissance de 2,8% au deuxième. En pleine campagne électorale pour les élections législatives du 6 mai, l'économie du Royaume-Uni devrait poursuivre son rebond, avec une croissance annualisée de 2% puis de 3,1% aux deux premiers trimestres de l'année, après +1,8% fin 2009, selon l'OCDE. Au Japon, la croissance en rythme annuel est attendue de 1,1% au premier puis de 2,3% au deuxième trimestre, après +3,8% au dernier trimestre de l'an dernier. http://www.lesechos.fr/info/inter/afp_00243078-g7-la-reprise-est-plus-dynamique-aux- etats-unis-que-dans-la-zone-euro.htm

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When I'm in India & China I get to see opportunities, not risks: Nouriel Roubini 6 Apr 2010, 0014 hrs IST,ET Now ET NOW’s Shaili Chopra moderated a roundtable discussion among Nouriel Roubini, Chanda Kochhar, Adi Godrej, Sanjay Nayar, N Chandrasekaran and MV Nair at the Edelweiss India Conference 2010. Excerpts: There was a time when everybody used to talk which is the next big opportunity. Today, we think of which is the next big trough. So are we constantly looking out for the worst case?

Nouriel Roubini: That’s really the ‘bad psychology’ in the sense that we have gone through so much economic and financial turmoil in the past couple of years both in the US, in Europe and it has spilled over a little bit also to emerging markets. Even investors are now more optimistic than worried about the next downside risk. So, you have to be balanced. You have to see what are the opportunities. In the US, Europe and Japan, there is concern about the risk and vulnerability, but when I visit countries like India, China, rest of Asia and Brazil and even other parts of emerging markets, there is more of a sense that things are going better and the opportunities are greater than the downside risks as well. Chanda Kochhar: I am actually looking for the next big opportunity. In the past few years, our growth has been really moving on the basis of domestic consumption. This is an advantage that will stay with us for decades. But I am now seeing the next driver of growth which is investment. There is a lot of investment being planned for manufacturing and infrastructure. And that’s going to create a further multiplier effect, taking our GDP growth to much higher levels. Where is the turning point, between being an economy that was slowing and believing that we are confident about this economic recovery? Sanjay Nayar: I am not really sure where that points to get a sustainable double-digit growth rate. Look at IP numbers for the past few quarters, auto, cement despatches, non-oil imports, all of those are in right direction. We really have not unlocked the capital available in the country and the reason is the fiscal being what it is, it does take away a lot of private savings. So, if you want to really tackle and have a sustainable model, we need the supply side to build, which is really infrastructure. Mr Godrej, in many ways, we did not go through a recession. We might have slowed down. And that was always your thinking. What would you tell Dr Roubini about your experiences dealing with this rural opportunity? Adi Godrej: The worst quarter we had was the October-December quarter of 2008, after the global banking crisis. Liquidity was also affected and our growth rate was around 5%. Thereafter, we have accelerated in growth and consumer businesses have continued to do very well in India throughout the global crisis. To my mind, India is going to have a 10% growth rate over the next decade. The major driver will be the goods and services tax. To my mind, it will add 1.5-2% to India’s growth. The consumer demand is what has been driving India’s growth and if investment also picks up, then we have a win-win situation for a very rapid growth rate. The stimulus that we have experienced in the past 12-18 months is on its way out. In India, we have already seen the announcements to that effect. Do you think the impact of the exit is still to play out? MV Nair: The slow exit is good for the economy. Then, we will clearly see consumption demand picking up, the investment demand picking up. But I would like to add one more dimension to the growth opportunities. In India, opportunities are coming up from all sectors. But there is an important challenge that we shouldn’t overlook at. There is a social tension happening, because it is not

150 equitably distributed. Out of 600 districts, about 200 are facing Naxal threats. If we don’t address this issue, the over 9% growth story that we are looking at may not get us the benefit. Do you feel that we are still not out of the woods in the US? Nouriel Roubini: There is an economic recovery, but there is also a debate in the US on whether the recovery is going to be like previous recovery from recession — V-shape. There is going to be a slower economic recovery. What about in India? Sanjay Nayar: We are clearly on the uptrend of the U, but we depend upon capital flows. The point that Dr Roubini made is pretty relevant, because there is a lot of deleveraging yet to happen in the developed world. N Chandrasekaran: We keep talking about U-shape, but it’s relevant for the US, the UK and other markets. In India, actually, we did not have such a big dip at all in the first place. It is more of a small curvature. The second point is considering that this crisis happened, probably raised awareness among Indian companies that they have got to focus on domestic growth. The third thing is, considering that there are not many countries in which the funds will flow to, India is in a much better position. I believe that this should actually enable India to attract more funds. Would you in any way think that in the recovery, we are somewhat decoupled from the West?

Chanda Kochhar: We are somewhat decoupled because the basic driver of growth has been the domestic demand. The investment, which will be the next driver, is also arising out of domestic demand. Today, even for investments, we are relying on capital flows. So, that’s the extent of linkage that we have. Is there a risk of a new bubble surfacing in India? Two months ago, we were talking about China continuing to show some resource bubbles or property bubbles... Nouriel Roubini: I see more of a risk in the case of China, because its real estate boom is becoming excessive — commercial and residential. We have excessive increase in production in new homes and offices. We have also bubbly condition in other markets and there is overinvestment capacity going on in China. In India, it’s different, because there are supply constraints in terms of capacity infrastructure and demand is quite robust from the demand side. So I don’t yet see evidence of a real financial bubble but certainly a lot of the money has to go into real projects to create more production and supply. What is it that a country like India could do to try and avoid what has been the crisis of 2008?

Nouriel Roubini: Two things are key. On one side, you need a framework of market economic and financial stability. So, you need sound and well-supervised regulated financial institutions, but you also have to allow financial innovation. There is a risk of being too cautious of not letting financial institutions grow. You also have to make sure that you don’t have micro imbalances. http://economictimes.indiatimes.com/Opinion/Interviews/When-Im-in-India-China-I-get-to-see- opportunities-not-risks-Nouriel-Roubini/articleshow/5764533.cms?curpg=1

151 4 JEAN-MARC VITTORI France-Allemagne : 1 à 3 [ 07/04/10 ] JEAN-MARC VITTORI EST ÉDITORIALISTE AUX « ECHOS ». La France refait son complexe par rapport à l'Allemagne. On se croirait revenu un quart de siècle en arrière, quand le football se définissait comme un jeu qui se joue à onze et où l'Allemagne gagne à la fin. A l'époque, nos voisins gagnaient partout. Dans les stades, les Noir et Blanc battaient les Bleus (1982 et 1986, en demi-finale de la Coupe du monde). Dans les salles de marché, le franc dévaluait face au mark (1981, 1982, 1983, 1986 et 1987). Dans l'industrie, la vallée de la Ruhr snobait la vallée du Rhône. Paris développait non une « Schadenfreude » (joie mauvaise tirée du malheur des autres) mais ce qui pourrait être appelée une « Chleudenfreude », une joie mauvaise tirée de notre malheur face aux succès de « nos puissants voisins ». Aujourd'hui, l'incontestable réussite à l'export de l'Allemagne, sa maîtrise des finances publiques et l'anémie de son consommateur relancent le débat sur le fameux « modèle rhénan ». Une plongée dans les chiffres de la première décennie de l'euro (1999-2009) permet de reconstituer le match entre les deux pays. A première vue, surprise : la France ouvre le score avec une magnifique lucarne. Sur l'ensemble de la décennie, sa croissance a été presque deux fois plus forte (16 % contre 9 %). Et l'an dernier, lors de la plus profonde récession depuis près d'un siècle, la production a deux fois moins baissé en France qu'en Allemagne. Ce ratio de 1 à 2 se retrouve sur les gains de productivité. Certes, le chômage reste plus élevé en France. Mais l'écart entre les taux est passé de 2 % en 2000 à 1 % en 2008. Et si la France a perdu plus d'emplois l'an dernier, la fin des dispositifs mis en place outre-Rhin pour amortir le choc de la crise va fatalement réduire l'écart. Et les Français ont moins de raisons de se plaindre que les Allemands. Les particuliers ont accru leurs achats de 24 %. Quatre fois plus que leurs voisins ! Bien sûr, la progression par tête est un peu moins soutenue, car la population a augmenté de 6 % alors qu'elle stagnait en Allemagne. Et une partie de ces achats a été financée par l'endettement des ménages, passé de 500 à pratiquement 1.000 milliards d'euros alors qu'il n'a pratiquement pas bougé outre-Rhin. Mais, au total, la consommation reste le premier moteur de l'économie en France, comme dans la plupart des pays développés. Pas en Allemagne. Nos voisins ont pris une autre route, qu'ils connaissent bien depuis longtemps : l'exportation. En dix ans, ils ont augmenté leurs ventes de produits et de services à l'étranger de… 69 %, pour l'essentiel dans la zone euro, contre seulement 20 % de notre côté. But d'égalisation, sur une belle action collective ! Leurs échanges ont ajouté un demi-point de croissance par an, alors que le commerce extérieur ôtait près d'un demi-point de croissance côté français. Ce faisant, ils ont maintenu leur part du marché mondial à près de 9 %, une performance en ces temps de montée en puissance de la Chine. La France, elle, a perdu le quart de son poids commercial. Sa balance courante encaisse d'ailleurs en 2009 un déficit de 2 % du PIB contre un surplus de 4 % en Allemagne. En 1999, c'était pratiquement l'inverse. Pour accomplir cet exploit, les Allemands ont appuyé sur deux leviers. D'abord, l'innovation. Leurs industriels ont travaillé d'arrache-pied pour réorganiser leur production et développer de

152 nouveaux produits. La dépense intérieure de recherche-développement a grimpé de 2,40 à 2,63 % du PIB alors qu'elle a reculé chez les Français de 2,15 à 2,02 %. Ensuite, les salaires. Ils ont été comprimés comme nulle part ailleurs. En dix ans, le coût salarial par unité produite a augmenté d'à peine 7 % contre 22 % en France (et près de 40 % dans les pays du sud de l'Europe). Si les Allemands restent bien plus payés que les Chinois, ils ont beaucoup gagné en compétitivité sur les Français. Et la situation financière de leurs entreprises est bien meilleure. Deuxième but pour l'équipe allemande, sur un gros travail de remontée du terrain ! Cette efficacité ne vient pas seulement des entreprises, mais aussi de l'Etat. Troisième but, sur un coup de pied arrêté ! Alors que Paris tergiversait, Berlin a mené une politique de fond. D'abord en allégeant la pression sur l'entreprise : alors que les cotisations sociales constituaient 18 % du PIB en 2000 de part et d'autre du Rhin, elles ont baissé à 16 % en 2008 sur la rive droite et n'ont pas bougé sur la rive gauche. Et plusieurs dispositifs ont été créés à la périphérie de l'entreprise, comme les minijobs à 400 euros par mois. Ensuite, Berlin a allégé l'Etat : sur la décennie, le poids de la dépense publique dans le PIB a reculé d'un demi- point, à moins de 48 %, tandis qu'il a progressé de plus de 3 points en France pour atteindre 56 %. Un record absolu pour le pays… et le monde entier. Enfin, les pouvoirs publics ont mobilisé le travail : le taux d'activité des 15-64 ans a progressé de 6 points pour dépasser 74 % alors qu'il n'a gagné que 1 point en France pour atteindre péniblement 63 %. De l'autre côté du Rhin, des gouvernements de gauche puis de droite ont mené des réformes en profondeur. Ils ont préparé le futur. De ce côté-ci, des gouvernements de droite puis de gauche se sont emmêlés les pinceaux dans la réglementation des heures de travail et les demi- mesures. Ils ont gaspillé le présent. L'Allemagne l'emporte haut la main, 3 buts à 1. Et pour une fois, le score reflète la physionomie du match. Les chiffres du match France-Allemagne sur lesechos.fr/documents http://www.lesechos.fr/info/analyses/020456164780-france-allemagne-1-a-3.htm

Demain, notre correspondant à Berlin, Karl de Meyer, analysera plus en détail la politique de compétitivité menée en Allemagne et ses conséquences pour les Allemands.

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154 155 Internacional Merkel marca el paso en Europa La canciller alemana logra imponer los intereses de su país al abordar la crisis griega - La prensa aclama el cambio de paradigma de Berlín dentro de la UE JUAN GÓMEZ - Berlín - 05/04/2010 Frau Europa vuelve a ser Madame No. El enroque de Angela Merkel en la crisis griega ha descolocado el tablero europeo y ha suscitado un debate sobre el nuevo orden de sus piezas principales. Hace una semana, Merkel se impuso en la cumbre de Bruselas forzando un acuerdo que respondía punto por punto a los planes de la canciller federal. Frau Europa vuelve a ser Madame No. El enroque de Angela Merkel en la crisis griega ha descolocado el tablero europeo y ha suscitado un debate sobre el nuevo orden de sus piezas principales. Hace una semana, Merkel se impuso en la cumbre de Bruselas forzando un acuerdo que, aunque disfrazado de propuesta francoalemana, respondía punto por punto a los planes de la canciller federal. En lo que el semanario Der Spiegel denomina "un cambio de paradigma" en la política europea de Alemania, la canciller presentó sin rebozo los intereses de su país en Bruselas, que incluyen la implicación del Fondo Monetario Internacional (FMI) en el potencial rescate griego y la introducción de nuevas sanciones a los países que vulneren el Pacto de Estabilidad. Se salió con la suya tras meses de fuertes tensiones. Una semana antes, la jefa la Unión Demócrata Cristiana (CDU) había sorprendido a propios y a extraños proponiendo ante el Bundestag la posibilidad de expulsar del euro a quien no logre enderezar sus cuentas. La propuesta de Merkel no cuajó, pero ahora menudean las comparaciones -desfavorables- con el europeísmo de sus predecesores Helmut Kohl y Konrad Adenauer. Otros echaron mano de referencias históricas diferentes. Los medios conservadores, con el sensacionalista e influyente diario Bild a la cabeza, aplaudieron el éxito de la euro-fighter Merkel. El jueves, día de la cumbre, el periódico le había dedicado un fotomontaje que la equiparaba con Bismarck: la cabeza de Merkel sobre los hombros acorazados del monumento al Canciller de Hierro en Hamburgo, bajo el titular "Nunca más los pagadores de Europa". Detrás de este patrioterismo asoma, sin embargo, la preocupación sobre el futuro papel de Alemania en la UE. El diario Frankfurter Allgemeine Zeitung se preguntaba el lunes "cuán europeísta es Angela Merkel". El ex ministro de Exteriores verde Joschka Fischer ironizaba en el Süddeutsche Zeitung su respuesta: "Avergüéncese quien piense en las próximas elecciones". El 9 de mayo, una coalición de democristianos y liberales (FDP) análoga a la de Merkel se juega la reelección en Renania del Norte-Westfalia, el land alemán más poblado e industrializado. Muchos acusan a Merkel de anteponer intereses partidistas al proyecto europeo. Las encuestas confirman que la actitud general de los alemanes ante el embrollo griego se parece mucho a la de Bild, de lectura diaria para millones de ellos. Durante décadas, las élites políticas defendieron la construcción europea como una necesidad ineludible. Los ciudadanos eran más mansos que entusiastas: es muy probable que, de haberse sometido a referéndum, Alemania habría rechazado tanto el euro como la integración de algunos países en la UE, sobre todo del Este.

156 Durante la crisis financiera griega se ha hablado más de las contribuciones a los fondos estructurales que de los enormes beneficios que la economía exportadora alemana ha obtenido de la Unión Monetaria y del libre tráfico de mercancías. El país que se enorgullecía hasta hace unos meses de ser "campeón mundial de las exportaciones" alcanzó este título gracias a sus ventajas estructurales respecto a sus vecinos y a años de implacable contención salarial. Alemania obtiene la mayor parte de su superávit comercial en la zona euro. Debido a la Unión Monetaria, países como Grecia no pueden contrarrestar este desequilibrio devaluando su moneda. Theo Waigel, ministro de Hacienda en la era Kohl, reconoció la semana pasada que la moneda única impidió que la crisis económica golpeara Alemania con una mayor virulencia. Tras los millonarios rescates bancarios de la crisis financiera, una ayuda en metálico a Grecia habría dañado la imagen del Gobierno, que en sus primeros 150 días ha experimentado ya considerables dificultades. Primero, con la salida de Franz Josef Jung de Trabajo por su política de información como ministro de Defensa cuando un oficial alemán provocó una matanza de civiles en Afganistán, el pasado septiembre. Después, con la polémica levantada por el líder liberal y ministro de Exteriores, Guido Westerwelle, al criticar las ayudas sociales alemanas. La prometida reforma fiscal, el santasanctórum liberal, tropieza con la vocación de ahorro del ministro de Hacienda, Wolfgang Schäuble (CDU). Las encuestas castigan a los liberales, que del casi 15% obtenido en las generales de septiembre pasarían ahora al 8%. Según la misma encuesta, publicada el jueves, la coalición de Merkel se quedaría en un magro 43%. Así que la consigna es evitar enfrentamientos públicos entre los socios. Peligra Renania. Merkel se ha traído a casa un éxito europeo en el momento oportuno. A qué precio es otra cuestión. Algunos analistas consideran que la canciller impuso su plan de primeros auxilios para Grecia para detener la especulación contra el euro sin violar la actual normativa europea que prohíbe a los Estados miembros asumir la deuda de un socio. El Süddeutsche Zeitung comparaba el sábado el "europeísmo sentimental" de Helmut Kohl con el "europeísmo racional" de Merkel. Si el primero, entusiasta, permitió el ingreso de Grecia en la UE pese a sus tretas contables para adaptarse a Maastricht, la frialdad de Merkel podría estar abriendo la puerta a una nueva política monetaria de verdadera cohesión y estabilización del euro. Der Spiegel, en cambio, recogía la preocupación de parlamentarios de la CDU en Bruselas por el posible abono de sentimientos antieuropeos latentes en Alemania. http://www.elpais.com/articulo/internacional/Merkel/marca/paso/Europa/elpepuint/20100405 elpepiint_7/Tes

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Las empresas en concurso frenan su ritmo de subida Las suspensiones de pagos crecen un 13% hasta marzo aunque caen frente a finales de 2009.- Las inmobiliarias dejan paso a otros sectores EUROPA PRESS - Madrid - 05/04/2010 Los concursos de acreedores moderaron su crecimiento en el primer trimestre del año con un total de 1.552 concursos, lo que supuso un 13% más respecto al mismo periodo del año anterior, según el Baremo Concursal que trimestralmente elabora PricewaterhouseCoopers (PwC) a partir de la información publicada en el Boletín Oficial del Estado (BOE). De hecho, respecto al trimestre anterior, los concursos experimentaron una caída del 1%, mientras que el 64% del total de insolvencias judiciales se registraron en las comunidades autónomas de Cataluña, Comunidad Valenciana, Madrid y Andalucía. El socio responsable del área de reestructuraciones de PwC, Enrique Bujidos, ha explicado que "las insolvencias pueden estar estabilizándose y se volverá a repetir en 2010 una cifra en torno a los 6.000 procedimientos registrados en 2009". Según ha añadido, en el primer trimestre destacó el "elevado número de insolvencias de personas físicas y la entrada en liza de nuevos sectores". Por comunidades, Cataluña fue la región que aglutinó un mayor número de concursos en lo que va de 2010, con 364, el 23% del total. La Comunidad de Madrid fue la segunda en la clasificación, con 257, el 17%-; seguida de la Comunidad Valenciana, con 246, 16%; Andalucía, con 123, 8%; Galicia, con 97, el 6%; País Vasco, con 67, el 4%. Cabe destacar la caída que respecto al primer trimestre del año anterior sufrieron comunidades como La Rioja (-58%), Extremadura (-45%), Asturias (-42%) y Castilla y León (-18%). Por otro lado, dos de las comunidades con mayor actividad concursal, como son Madrid y Valencia, experimentaron un fuerte incremento en el número de procedimientos del 41% y 46%, respectivamente. Nuevos sectores Por tipo de empresa, los sectores de la construcción e inmobiliario siguieron a la cabeza de los concursos con un 36% de todos los procesos incoados entre enero y marzo de 2010, un 2% menos que en el mismo periodo del año anterior. Sin embargo, la crisis comenzó a afectar a nuevos sectores. Así, sectores como la automoción, el transporte y los servicios aumentaron sus niveles concursales en el primer trimestre de 2010 un 17%, un 53% y un 50%, respectivamente. Por otro lado, los sectores industriales y la distribución cayeron respecto al mismo trimestre de 2009 un 7% y un 11%, respectivamente. Por otro lado, el tamaño de las empresas concursadas siguió disminuyendo y sólo crecieron en términos absolutos las empresas con activo y pasivo menor a dos millones de euros, que sumaron el 42% y el 44% de las empresas concursadas. En general, el promedio de activo y pasivo de las empresas cayó un 16% y un 22%, respectivamente. Por último, el número de empleados afectados por las empresas en concurso disminuyó un 17,2% respecto al primer trimestre de 2009. El 75% de las empresas que entraron en concurso en lo que llevamos de año contaba con una plantilla inferior a 50 empleados, lo que supone un porcentaje muy pequeño dentro del número total de parados. http://www.elpais.com/articulo/economia/empresas/concurso/frenan/ritmo/subida/elpepueco/2010040 5elpepueco_6/Tes

158 Spain Los concursos en 2009 baten todos los récords: crecen un 104% y, con 5860, superan los publicados en los últimos cuatro años Cataluña, Madrid y Valencia, son las comunidades que aglutinan mayor número de concursos Madrid, 4 de enero de 2010. Los concursos, tal y como se esperaba, han batido el pasado año todo los registros. En 2009, el número de concursos publicados en España aumentó un 104%, según el Baremo Concursal que trimestralmente elabora PricewaterhouseCoopers a partir de la información publicada en el Boletín Oficial del Estado. Concretamente, en 2009 tuvieron lugar 5.860 concursos frente a los 2.875 publicados en 2008. Para Enrique Bujidos, socio responsable del Área de Reestructuraciones de PricewaterhouseCoopers, “Hemos superado las previsiones del CGPJ de 4.738 concursos para este año. Además, es importante señalar que no se ha mantenido la tendencia a la baja registrada en el tercer trimestre del año, lo que refleja la situación financiera por la que se encuentran las empresas españolas. Entre octubre y diciembre tuvieron lugar 1.561 concursos lo que supone un incremento del 31% respecto al trimestre anterior y del 27% respecto al mismo periodo de año pasado”. Por comunidades autónomas, Cataluña ha sido la región que ha aglutinado un mayor número de concursos en 2009, con 1.399 -el 24% del total-. La Comunidad de Madrid es la segunda en el ranking concursal, con 877 –el 15%-; seguida de la Comunidad Valenciana, con 795- 14%-; Andalucía, con 603 -10%-; Galicia, con 323 –el 6%-, País Vasco, con 312 -5%-; y Castilla León, 269 -5%-. “Es importante señalar el fuerte incremento experimentado no sólo por las grandes comunidades autónomas, como Calatuña, Madrid y Valencia; sino por otras como Cantabria, Canarias y Murcia, con incrementos cercanos o superiores al 200%. Por otro lado, el País Vasco y Navarra vienen reflejando incrementos sustancialmente inferiores a la media y pueden estar empezando a reflejar modestos crecimientos del PIB”, explica Bujidos. Los sectores de la construcción e inmobiliario siguen siendo las estrellas concursales y representan el 34% de todos los procesos incoados en 2009, aunque pierden peso respecto al año anterior cuando supusieron el 39%. En este sentido, cabe destacar que la crisis ha comenzado a atacar a otros sectores distintos al ladrillo, como son los industriales, de automoción y distribución, que en este último año han crecido en número de concursos un 110, un 122 y un 142 por ciento, respectivamente. Además, los concursos de personas físicas, suponen ya un 20% del total de concursos, llegando a la cifra de 1.188 casos en 2009.. Las empresas concursadas son muchas más y de menor tamaño. Crecen considerablemente aquellas con activo inferior a los dos millones de euros y disminuyen el número de compañías concursadas con activos superiores a los cinco millones de euros. Respecto al tamaño medio de los activos, las empresas concursadas en 2009 se ha reducido considerablemente respecto al año anterior, pasando de 13,1 millones de euros en 2008 a 7,2 millones en 2009, lo que supone una reducción del 45% y se explica por la fuerte caída de las compañías concursadas con activos superiores a 30 milllones de euros. Empleados afectados Algunas cifras curiosas: Durante 2009 se han visto afectados por concursos de acreedores más de 100.000 empleados. El 77,4% de las empresas que entraron en concurso contaban con una plantilla inferior a 50 empleados. El número de empleados afectados por las empresas en concurso se ha incrementado considerablemente en comparación con el año anterior, aunque el crecimiento no ha sido tan exponencial. En cualquier caso, las cifras absolutas de empleados afectados por concursos es tan solo una muy pequeña parte de los trabajadores que han perdido su empleo este año. http://www.pwc.com/en_ES/es/sala-prensa/notas-prensa/assets/concursos-2009-04-01-2010- documentacion.pdf

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Opinion

April 5, 2010 OP-ED COLUMNIST Making Financial Reform Fool-Resistant By PAUL KRUGMAN The White House is confident that a financial regulatory reform bill will soon pass the Senate. I’m not so sure, given the opposition of Republican leaders to any real reform. But in any case, how good is the legislation on the table, the bill put together by Senator Chris Dodd of Connecticut? Not good enough. It’s a good-faith effort to do what needs to be done, but it would create a system highly dependent on the wisdom and good intentions of government officials. And as the history of the last decade demonstrates, trusting in the quality of officials can be dangerous to the economy’s health. Now, it’s impossible to devise a truly foolproof regulatory regime — anyone who believes otherwise is underestimating the power of foolishness. But you can try to create a system that’s relatively fool-resistant. Unfortunately, the Dodd bill doesn’t do that. As I argued in my last column, while the problem of “too big to fail” has gotten most of the attention — and while big banks deserve all the opprobrium they’re getting — the core problem with our financial system isn’t the size of the largest financial institutions. It is, instead, the fact that the current system doesn’t limit risky behavior by “shadow banks,” institutions — like Lehman Brothers — that carry out banking functions, that are perfectly capable of creating a banking crisis, but, because they issue debt rather than taking deposits, face minimal oversight. The Dodd bill tries to fill this gaping hole in the system by letting federal regulators impose “strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity.” It also gives regulators the power to seize troubled financial firms — and it requires that large, complex firms submit “funeral plans” that make it relatively easy to shut them down. That’s all good. In effect, it gives shadow banking something like the regulatory regime we already have for conventional banking. But what will actually be in those “strict rules” for capital, liquidity, and so on? The bill doesn’t say. Instead, everything is left at the discretion of the Financial Stability Oversight Council, a sort of interagency task force including the chairman of the Federal Reserve, the Treasury secretary, the comptroller of the currency and the heads of five other federal agencies. Mike Konczal of the Roosevelt Institute, whose blog has become essential reading for anyone interested in financial reform, has pointed out what’s wrong with this: just consider who would have been on that council in 2005, which was probably the peak year for irresponsible lending. Well, in 2005 the chairman of the Fed was Alan Greenspan, who dismissed warnings about the housing bubble — and who asserted in October 2005 that “increasingly complex financial

160 instruments have contributed to the development of a far more flexible, efficient, and hence resilient financial system.” Meanwhile, the secretary of the Treasury was John Snow, who ... actually, I don’t think anyone remembers anything about Mr. Snow, other than the fact that Karl Rove treated him like an errand boy. The comptroller of the currency was John Dugan, who still holds the office. He was recently the subject of a profilein The Times, which noted his habit of blocking efforts by states to crack down on abusive consumer lending, on the grounds that he, not the states, has authority over national banks — except that he himself almost never acts to protect consumers. Oh, and on the subject of consumer protection: the Dodd bill creates a more or less independent agency to protect consumers against abusive lending, albeit one housed at the Fed. That’s a good thing. But it gives the oversight council the ability to override the agency’s recommendations. The point is that the Dodd bill would give an administration determined to rein in runaway finance the tools it needs to do the job. But it wouldn’t do much to stiffen the spine of a less determined administration. On the contrary, it would make it easy for future regulators to look the other way as another bubble inflated. So what the legislation needs are explicit rules, rules that would force action even by regulators who don’t especially want to do their jobs. There should, for example, be a preset maximum level of allowable leverage — the financial reform that has already passed the House sets this at 15 to 1, and the Senate should follow suit. There should be hard rules determining when regulators have to seize a troubled financial firm. There should be no- exception rules requiring that complex financial derivatives be traded transparently. And so on. I know that getting such things into the bill would be hard politically: as financial reform legislation moves to the floor of the Senate, there will be pressure to make it weaker, not stronger, in the hope of attracting Republican votes. But I would urge Senate leaders and the Obama administration not to settle for a weak bill, just so that they can claim to have passed financial reform. We need reform with a fighting chance of actually working. http://www.nytimes.com/2010/04/05/opinion/05krugman.html?th&emc=th

April 4, 2010, 3:31 pm WWS 543, April 5

Readings (doc) Readings for April 5 Vox: http://www.voxeu.org/index.php?q=node/3920 Lawrence: http://www.piie.com/publications/chapters_preview/4143/alliie4143.pdf Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality? by Robert Z. Lawrence January 2008 Krugman: http://www.princeton.edu/~pkrugman/pk-bpea-draft.pdf Feenstra: http://www.econ.ucdavis.edu/faculty/fzfeens/pdf/Feenstra_Ohlin_Lecture_2008.pdf

161 Slides (pdf) http://www.princeton.edu/~pkrugman/incomedist.pdf

April 4, 2010, 3:20 pm Alan Greenspan: Still Not A Mensch Until now I’ve managed to avoid reading Alan Greenspan’s Brookings Paper (pdf). But I finally took the plunge — and discovered that he’s still not a mensch, a person of integrity willing to take responsibility for his own actions. Here’s the passage that got me: Similarly in 2002, I expressed my concerns before the Federal Open Market Committee that “. . . our extraordinary housing boom . . . financed by very large increases in mortgage debt – cannot continue indefinitely.” It lasted until 2006. Ah, wise Alan warned us, but you know, it takes time for things to mature … Strangely, he fails to mention such pearls of wisdom as his assurances, in 2004, that we needn’t worry about a national housing bubble: Overall, while local economies may experience significant speculative price imbalances, a national severe price distortion seems most unlikely in the United States, given its size and diversity. Or his wise assessment, in late 2005, of the state of our financial system: These increasingly complex financial instruments have contributed to the development of a far more flexible, efficient, and hence resilient financial system than the one that existed just a quarter-century ago. Back to the housing bubble: Greenspan’s whole defense now is that nobody saw it. But there were an awful lot of nobodies — Dean Baker, Bob Shiller, Calculated Risk, and yes, yours truly. What’s probably true is that nobody Greenspan talked to regularly saw it. And you know why? Because Greenspan insulated himself from people who told him what he didn’t want to hear. And here he is, still lecturing us on responsible policy.

162 Magazine

April 5, 2010 Building a Green Economy By PAUL KRUGMAN If you listen to climate scientists — and despite the relentless campaign to discredit their work, you should — it is long past time to do something about emissions of carbon dioxide and other greenhouse gases. If we continue with business as usual, they say, we are facing a rise in global temperatures that will be little short of apocalyptic. And to avoid that apocalypse, we have to wean our economy from the use of fossil fuels, coal above all. But is it possible to make drastic cuts in greenhouse-gas emissions without destroying our economy? Like the debate over climate change itself, the debate over climate economics looks very different from the inside than it often does in popular media. The casual reader might have the impression that there are real doubts about whether emissions can be reduced without inflicting severe damage on the economy. In fact, once you filter out the noise generated by special-interest groups, you discover that there is widespread agreement among environmental economists that a market-based program to deal with the threat of climate change — one that limits carbon emissions by putting a price on them — can achieve large results at modest, though not trivial, cost. There is, however, much less agreement on how fast we should move, whether major conservation efforts should start almost immediately or be gradually increased over the course of many decades. In what follows, I will offer a brief survey of the economics of climate change or, more precisely, the economics of lessening climate change. I’ll try to lay out the areas of broad agreement as well as those that remain in major dispute. First, though, a primer in the basic economics of environmental protection. Environmental Econ 101 If there’s a single central insight in economics, it’s this: There are mutual gains from transactions between consenting adults. If the going price of widgets is $10 and I buy a widget, it must be because that widget is worth more than $10 to me. If you sell a widget at that price, it must be because it costs you less than $10 to make it. So buying and selling in the widget market works to the benefit of both buyers and sellers. More than that, some careful analysis shows that if there is effective competition in the widget market, so that the price ends up matching the number of widgets people want to buy to the number of widgets other people want to sell, the outcome is to maximize the total gains to producers and consumers. Free markets are “efficient” — which, in economics-speak as opposed to plain English, means that nobody can be made better off without making someone else worse off. Now, efficiency isn’t everything. In particular, there is no reason to assume that free markets will deliver an outcome that we consider fair or just. So the case for market efficiency says nothing about whether we should have, say, some form of guaranteed health insurance, aid to the poor and so forth. But the logic of basic economics says that we should try to achieve social goals through “aftermarket” interventions. That is, we should let markets do their job, making efficient use of the nation’s resources, then utilize taxes and transfers to help those whom the market passes by.

163 But what if a deal between consenting adults imposes costs on people who are not part of the exchange? What if you manufacture a widget and I buy it, to our mutual benefit, but the process of producing that widget involves dumping toxic sludge into other people’s drinking water? When there are “negative externalities” — costs that economic actors impose on others without paying a price for their actions — any presumption that the market economy, left to its own devices, will do the right thing goes out the window. So what should we do? Environmental economics is all about answering that question. One way to deal with negative externalities is to make rules that prohibit or at least limit behavior that imposes especially high costs on others. That’s what we did in the first major wave of environmental legislation in the early 1970s: cars were required to meet emission standards for the chemicals that cause smog, factories were required to limit the volume of effluent they dumped into waterways and so on. And this approach yielded results; America’s air and water became a lot cleaner in the decades that followed. But while the direct regulation of activities that cause pollution makes sense in some cases, it is seriously defective in others, because it does not offer any scope for flexibility and creativity. Consider the biggest environmental issue of the 1980s — acid rain. Emissions of sulfur dioxide from power plants, it turned out, tend to combine with water downwind and produce flora- and wildlife-destroying sulfuric acid. In 1977, the government made its first stab at confronting the issue, recommending that all new coal-fired plants have scrubbers to remove sulfur dioxide from their emissions. Imposing a tough standard on all plants was problematic, because retrofitting some older plants would have been extremely expensive. By regulating only new plants, however, the government passed up the opportunity to achieve fairly cheap pollution control at plants that were, in fact, easy to retrofit. Short of a de facto federal takeover of the power industry, with federal officials issuing specific instructions to each plant, how was this conundrum to be resolved? Enter Arthur Cecil Pigou, an early-20th-century British don, whose 1920 book, “The Economics of Welfare,” is generally regarded as the ur-text of environmental economics. Somewhat surprisingly, given his current status as a godfather of economically sophisticated environmentalism, Pigou didn’t actually stress the problem of pollution. Rather than focusing on, say, London’s famous fog (actually acrid smog, caused by millions of coal fires), he opened his discussion with an example that must have seemed twee even in 1920, a hypothetical case in which “the game-preserving activities of one occupier involve the overrunning of a neighboring occupier’s land by rabbits.” But never mind. What Pigou enunciated was a principle: economic activities that impose unrequited costs on other people should not always be banned, but they should be discouraged. And the right way to curb an activity, in most cases, is to put a price on it. So Pigou proposed that people who generate negative externalities should have to pay a fee reflecting the costs they impose on others — what has come to be known as a Pigovian tax. The simplest version of a Pigovian tax is an effluent fee: anyone who dumps pollutants into a river, or emits them into the air, must pay a sum proportional to the amount dumped. Pigou’s analysis lay mostly fallow for almost half a century, as economists spent their time grappling with issues that seemed more pressing, like the Great Depression. But with the rise of environmental regulation, economists dusted off Pigou and began pressing for a “market- based” approach that gives the private sector an incentive, via prices, to limit pollution, as opposed to a “command and control” fix that issues specific instructions in the form of regulations. The initial reaction by many environmental activists to this idea was hostile, largely on moral grounds. Pollution, they felt, should be treated like a crime rather than something you have the

164 right to do as long as you pay enough money. Moral concerns aside, there was also considerable skepticism about whether market incentives would actually be successful in reducing pollution. Even today, Pigovian taxes as originally envisaged are relatively rare. The most successful example I’ve been able to find is a Dutch tax on discharges of water containing organic materials. What has caught on instead is a variant that most economists consider more or less equivalent: a system of tradable emissions permits, a k a cap and trade. In this model, a limited number of licenses to emit a specified pollutant, like sulfur dioxide, are issued. A business that wants to create more pollution than it is licensed for can go out and buy additional licenses from other parties; a firm that has more licenses than it intends to use can sell its surplus. This gives everyone an incentive to reduce pollution, because buyers would not have to acquire as many licenses if they can cut back on their emissions, and sellers can unload more licenses if they do the same. In fact, economically, a cap-and-trade system produces the same incentives to reduce pollution as a Pigovian tax, with the price of licenses effectively serving as a tax on pollution. In practice there are a couple of important differences between cap and trade and a pollution tax. One is that the two systems produce different types of uncertainty. If the government imposes a pollution tax, polluters know what price they will have to pay, but the government does not know how much pollution they will generate. If the government imposes a cap, it knows the amount of pollution, but polluters do not know what the price of emissions will be. Another important difference has to do with government revenue. A pollution tax is, well, a tax, which imposes costs on the private sector while generating revenue for the government. Cap and trade is a bit more complicated. If the government simply auctions off licenses and collects the revenue, then it is just like a tax. Cap and trade, however, often involves handing out licenses to existing players, so the potential revenue goes to industry instead of the government. Politically speaking, doling out licenses to industry isn’t entirely bad, because it offers a way to partly compensate some of the groups whose interests would suffer if a serious climate- change policy were adopted. This can make passing legislation more feasible. These political considerations probably explain why the solution to the acid-rain predicament took the form of cap and trade and why licenses to pollute were distributed free to power companies. It’s also worth noting that the Waxman-Markey bill, a cap-and-trade setup for greenhouse gases that starts by giving out many licenses to industry but puts up a growing number for auction in later years, was actually passed by the House of Representatives last year; it’s hard to imagine a broad-based emissions tax doing the same for many years. That’s not to say that emission taxes are a complete nonstarter. Some senators have recently floated a proposal for a sort of hybrid solution, with cap and trade for some parts of the economy and carbon taxes for others — mainly oil and gas. The political logic seems to be that the oil industry thinks consumers won’t blame it for higher gas prices if those prices reflect an explicit tax. In any case, experience suggests that market-based emission controls work. Our recent history with acid rain shows as much. The Clean Air Act of 1990 introduced a cap-and-trade system in which power plants could buy and sell the right to emit sulfur dioxide, leaving it up to individual companies to manage their own business within the new limits. Sure enough, over time sulfur-dioxide emissions from power plants were cut almost in half, at a much lower cost than even optimists expected; electricity prices fell instead of rising. Acid rain did not disappear as a problem, but it was significantly mitigated. The results, it would seem, demonstrated that we can deal with environmental problems when we have to.

165 So there we have it, right? The emission of carbon dioxide and other greenhouse gases is a classic negative externality — the “biggest market failure the world has ever seen,” in the words of Nicholas Stern, the author of a report on the subject for the British government. Textbook economics and real-world experience tell us that we should have policies to discourage activities that generate negative externalities and that it is generally best to rely on a market-based approach. Climate of Doubt? This is an article on climate economics, not climate science. But before we get to the economics, it’s worth establishing three things about the state of the scientific debate. The first is that the planet is indeed warming. Weather fluctuates, and as a consequence it’s easy enough to point to an unusually warm year in the recent past, note that it’s cooler now and claim, “See, the planet is getting cooler, not warmer!” But if you look at the evidence the right way — taking averages over periods long enough to smooth out the fluctuations — the upward trend is unmistakable: each successive decade since the 1970s has been warmer than the one before. Second, climate models predicted this well in advance, even getting the magnitude of the temperature rise roughly right. While it’s relatively easy to cook up an analysis that matches known data, it is much harder to create a model that accurately forecasts the future. So the fact that climate modelers more than 20 years ago successfully predicted the subsequent global warming gives them enormous credibility. Yet that’s not the conclusion you might draw from the many media reports that have focused on matters like hacked e-mail and climate scientists’ talking about a “trick” to “hide” an anomalous decline in one data series or expressing their wish to see papers by climate skeptics kept out of research reviews. The truth, however, is that the supposed scandals evaporate on closer examination, revealing only that climate researchers are human beings, too. Yes, scientists try to make their results stand out, but no data were suppressed. Yes, scientists dislike it when work that they think deliberately obfuscates the issues gets published. What else is new? Nothing suggests that there should not continue to be strong support for climate research. And this brings me to my third point: models based on this research indicate that if we continue adding greenhouse gases to the atmosphere as we have, we will eventually face drastic changes in the climate. Let’s be clear. We’re not talking about a few more hot days in the summer and a bit less snow in the winter; we’re talking about massively disruptive events, like the transformation of the Southwestern United States into a permanent dust bowl over the next few decades. Now, despite the high credibility of climate modelers, there is still tremendous uncertainty in their long-term forecasts. But as we will see shortly, uncertainty makes the case for action stronger, not weaker. So climate change demands action. Is a cap-and-trade program along the lines of the model used to reduce sulfur dioxide the right way to go? Serious opposition to cap and trade generally comes in two forms: an argument that more direct action — in particular, a ban on coal-fired power plants — would be more effective and an argument that an emissions tax would be better than emissions trading. (Let’s leave aside those who dismiss climate science altogether and oppose any limits on greenhouse-gas emissions, as well as those who oppose the use of any kind of market-based remedy.) There’s something to each of these positions, just not as much as their proponents think.

166 When it comes to direct action, you can make the case that economists love markets not wisely but too well, that they are too ready to assume that changing people’s financial incentives fixes every problem. In particular, you can’t put a price on something unless you can measure it accurately, and that can be both difficult and expensive. So sometimes it’s better simply to lay down some basic rules about what people can and cannot do. Consider auto emissions, for example. Could we or should we charge each car owner a fee proportional to the emissions from his or her tailpipe? Surely not. You would have to install expensive monitoring equipment on every car, and you would also have to worry about fraud. It’s almost certainly better to do what we actually do, which is impose emissions standards on all cars. Is there a comparable argument to be made for greenhouse-gas emissions? My initial reaction, which I suspect most economists would share, is that the very scale and complexity of the situation requires a market-based solution, whether cap and trade or an emissions tax. After all, greenhouse gases are a direct or indirect byproduct of almost everything produced in a modern economy, from the houses we live in to the cars we drive. Reducing emissions of those gases will require getting people to change their behavior in many different ways, some of them impossible to identify until we have a much better grasp of green technology. So can we really make meaningful progress by telling people specifically what will or will not be permitted? Econ 101 tells us — probably correctly — that the only way to get people to change their behavior appropriately is to put a price on emissions so this cost in turn gets incorporated into everything else in a way that reflects ultimate environmental impacts. When shoppers go to the grocery store, for example, they will find that fruits and vegetables from farther away have higher prices than local produce, reflecting in part the cost of emission licenses or taxes paid to ship that produce. When businesses decide how much to spend on insulation, they will take into account the costs of heating and air-conditioning that include the price of emissions licenses or taxes for electricity generation. When electric utilities have to choose among energy sources, they will have to take into account the higher license fees or taxes associated with fossil-fuel consumption. And so on down the line. A market-based system would create decentralized incentives to do the right thing, and that’s the only way it can be done. That said, some specific rules may be required. James Hansen, the renowned climate scientist who deserves much of the credit for making global warming an issue in the first place, has argued forcefully that most of the climate-change problem comes down to just one thing, burning coal, and that whatever else we do, we have to shut down coal burning over the next couple decades. My economist’s reaction is that a stiff license fee would strongly discourage coal use anyway. But a market-based system might turn out to have loopholes — and their consequences could be dire. So I would advocate supplementing market-based disincentives with direct controls on coal burning. What about the case for an emissions tax rather than cap and trade? There’s no question that a straightforward tax would have many advantages over legislation like Waxman-Markey, which is full of exceptions and special situations. But that’s not really a useful comparison: of course an idealized emissions tax looks better than a cap-and-trade system that has already passed the House with all its attendant compromises. The question is whether the emissions tax that could actually be put in place is better than cap and trade. There is no reason to believe that it would be — indeed, there is no reason to believe that a broad-based emissions tax would make it through Congress. To be fair, Hansen has made an interesting moral argument against cap and trade, one that’s much more sophisticated than the old view that it’s wrong to let polluters buy the right to

167 pollute. What Hansen draws attention to is the fact that in a cap-and-trade world, acts of individual virtue do not contribute to social goals. If you choose to drive a hybrid car or buy a house with a small carbon footprint, all you are doing is freeing up emissions permits for someone else, which means that you have done nothing to reduce the threat of climate change. He has a point. But altruism cannot effectively deal with climate change. Any serious solution must rely mainly on creating a system that gives everyone a self-interested reason to produce fewer emissions. It’s a shame, but climate altruism must take a back seat to the task of getting such a system in place. The bottom line, then, is that while climate change may be a vastly bigger problem than acid rain, the logic of how to respond to it is much the same. What we need are market incentives for reducing greenhouse-gas emissions — along with some direct controls over coal use — and cap and trade is a reasonable way to create those incentives. But can we afford to do that? Equally important, can we afford not to? The Cost of Action Just as there is a rough consensus among climate modelers about the likely trajectory of temperatures if we do not act to cut the emissions of greenhouse gases, there is a rough consensus among economic modelers about the costs of action. That general opinion may be summed up as follows: Restricting emissions would slow economic growth — but not by much. The Congressional Budget Office, relying on a survey of models, has concluded that Waxman-Markey “would reduce the projected average annual rate of growth of gross domestic product between 2010 and 2050 by 0.03 to 0.09 percentage points.” That is, it would trim average annual growth to 2.31 percent, at worst, from 2.4 percent. Over all, the Budget Office concludes, strong climate-change policy would leave the American economy between 1.1 percent and 3.4 percent smaller in 2050 than it would be otherwise. And what about the world economy? In general, modelers tend to find that climate-change policies would lower global output by a somewhat smaller percentage than the comparable figures for the United States. The main reason is that emerging economies like China currently use energy fairly inefficiently, partly as a result of national policies that have kept the prices of fossil fuels very low, and could thus achieve large energy savings at a modest cost. One recent review of the available estimates put the costs of a very strong climate policy — substantially more aggressive than contemplated in current legislative proposals — at between 1 and 3 percent of gross world product. Such figures typically come from a model that combines all sorts of engineering and marketplace estimates. These will include, for instance, engineers’ best calculations of how much it costs to generate electricity in various ways, from coal, gas and nuclear and solar power at given resource prices. Then estimates will be made, based on historical experience, of how much consumers would cut back their electricity consumption if its price rises. The same process is followed for other kinds of energy, like motor fuel. And the model assumes that everyone makes the best choice given the economic environment — that power generators choose the least expensive means of producing electricity, while consumers conserve energy as long as the money saved by buying less electricity exceeds the cost of using less power in the form either of other spending or loss of convenience. After all this analysis, it’s possible to predict how producers and consumers of energy will react to policies that put a price on emissions and how much those reactions will end up costing the economy as a whole. There are, of course, a number of ways this kind of modeling could be wrong. Many of the underlying estimates are necessarily somewhat speculative; nobody really knows, for instance, what solar power will cost once it finally becomes a large-scale proposition. There is also

168 reason to doubt the assumption that people actually make the right choices: many studies have found that consumers fail to take measures to conserve energy, like improving insulation, even when they could save money by doing so. But while it’s unlikely that these models get everything right, it’s a good bet that they overstate rather than understate the economic costs of climate-change action. That is what the experience from the cap-and-trade program for acid rain suggests: costs came in well below initial predictions. And in general, what the models do not and cannot take into account is creativity; surely, faced with an economy in which there are big monetary payoffs for reducing greenhouse-gas emissions, the private sector will come up with ways to limit emissions that are not yet in any model. What you hear from conservative opponents of a climate-change policy, however, is that any attempt to limit emissions would be economically devastating. The Heritage Foundation, for one, responded to Budget Office estimates on Waxman-Markey with a broadside titled, “C.B.O. Grossly Underestimates Costs of Cap and Trade.” The real effects, the foundation said, would be ruinous for families and job creation. This reaction — this extreme pessimism about the economy’s ability to live with cap and trade — is very much at odds with typical conservative rhetoric. After all, modern conservatives express a deep, almost mystical confidence in the effectiveness of market incentives — Ronald Reagan liked to talk about the “magic of the marketplace.” They believe that the capitalist system can deal with all kinds of limitations, that technology, say, can easily overcome any constraints on growth posed by limited reserves of oil or other natural resources. And yet now they submit that this same private sector is utterly incapable of coping with a limit on overall emissions, even though such a cap would, from the private sector’s point of view, operate very much like a limited supply of a resource, like land. Why don’t they believe that the dynamism of capitalism will spur it to find ways to make do in a world of reduced carbon emissions? Why do they think the marketplace loses its magic as soon as market incentives are invoked in favor of conservation? Clearly, conservatives abandon all faith in the ability of markets to cope with climate-change policy because they don’t want government intervention. Their stated pessimism about the cost of climate policy is essentially a political ploy rather than a reasoned economic judgment. The giveaway is the strong tendency of conservative opponents of cap and trade to argue in bad faith. That Heritage Foundation broadside accuses the Congressional Budget Office of making elementary logical errors, but if you actually read the office’s report, it’s clear that the foundation is willfully misreading it. Conservative politicians have been even more shameless. The National Republican Congressional Committee, for example, issued multiple press releases specifically citing a study from M.I.T. as the basis for a claim that cap and trade would cost $3,100 per household, despite repeated attempts by the study’s authors to get out the word that the actual number was only about a quarter as much. The truth is that there is no credible research suggesting that taking strong action on climate change is beyond the economy’s capacity. Even if you do not fully trust the models — and you shouldn’t — history and logic both suggest that the models are overestimating, not underestimating, the costs of climate action. We can afford to do something about climate change. But that’s not the same as saying we should. Action will have costs, and these must be compared with the costs of not acting. Before I get to that, however, let me touch on an issue that will become central if we actually do get moving on climate policy: how to get the rest of the world to go along with us.

169 The China Syndrome The United States is still the world’s largest economy, which makes the country one of the world’s largest sources of greenhouse gases. But it’s not the largest. China, which burns much more coal per dollar of gross domestic product than the United States does, overtook us by that measure around three years ago. Over all, the advanced countries — the rich man’s club comprising Europe, North America and Japan — account for only about half of greenhouse emissions, and that’s a fraction that will fall over time. In short, there can’t be a solution to climate change unless the rest of the world, emerging economies in particular, participates in a major way. Inevitably those who resist tackling climate change point to the global nature of emissions as a reason not to act. Emissions limits in America won’t accomplish much, they argue, if China and others don’t match our effort. And they highlight China’s obduracy in the Copenhagen negotiations as evidence that other countries will not cooperate. Indeed, emerging economies feel that they have a right to emit freely without worrying about the consequences — that’s what today’s rich countries got to do for two centuries. It’s just not possible to get global cooperation on climate change, goes the argument, and that means there is no point in taking any action at all. For those who think that taking action is essential, the right question is how to persuade China and other emerging nations to participate in emissions limits. Carrots, or positive inducements, are one answer. Imagine setting up cap-and-trade systems in China and the United States — but allow international trading in permits, so Chinese and American companies can trade emission rights. By setting overall caps at levels designed to ensure that China sells us a substantial number of permits, we would in effect be paying China to cut its emissions. Since the evidence suggests that the cost of cutting emissions would be lower in China than in the United States, this could be a good deal for everyone. But what if the Chinese (or the Indians or the Brazilians, etc.) do not want to participate in such a system? Then you need sticks as well as carrots. In particular, you need carbon tariffs. A carbon tariff would be a tax levied on imported goods proportional to the carbon emitted in the manufacture of those goods. Suppose that China refuses to reduce emissions, while the United States adopts policies that set a price of $100 per ton of carbon emissions. If the United States were to impose such a carbon tariff, any shipment to America of Chinese goods whose production involved emitting a ton of carbon would result in a $100 tax over and above any other duties. Such tariffs, if levied by major players — probably the United States and the European Union — would give noncooperating countries a strong incentive to reconsider their positions. To the objection that such a policy would be protectionist, a violation of the principles of free trade, one reply is, So? Keeping world markets open is important, but avoiding planetary catastrophe is a lot more important. In any case, however, you can argue that carbon tariffs are well within the rules of normal trade relations. As long as the tariff imposed on the carbon content of imports is comparable to the cost of domestic carbon licenses, the effect is to charge your own consumers a price that reflects the carbon emitted in what they buy, no matter where it is produced. That should be legal under international-trading rules. In fact, even the World Trade Organization, which is charged with policing trade policies, has published a study suggesting that carbon tariffs would pass muster. Needless to say, the actual business of getting cooperative, worldwide action on climate change would be much more complicated and tendentious than this discussion suggests. Yet the problem is not as intractable as you often hear. If the United States and Europe decide to

170 move on climate policy, they almost certainly would be able to cajole and chivvy the rest of the world into joining the effort. We can do this. The Costs of Inaction In public discussion, the climate-change skeptics have clearly been gaining ground over the past couple of years, even though the odds have been looking good lately that 2010 could be the warmest year on record. But climate modelers themselves have grown increasingly pessimistic. What were previously worst-case scenarios have become base-line projections, with a number of organizations doubling their predictions for temperature rise over the course of the 21st century. Underlying this new pessimism is increased concern about feedback effects — for example, the release of methane, a significant greenhouse gas, from seabeds and tundra as the planet warms. At this point, the projections of climate change, assuming we continue business as usual, cluster around an estimate that average temperatures will be about 9 degrees Fahrenheit higher in 2100 than they were in 2000. That’s a lot — equivalent to the difference in average temperatures between New York and central Mississippi. Such a huge change would have to be highly disruptive. And the troubles would not stop there: temperatures would continue to rise. Furthermore, changes in average temperature will by no means be the whole story. Precipitation patterns will change, with some regions getting much wetter and others much drier. Many modelers also predict more intense storms. Sea levels would rise, with the impact intensified by those storms: coastal flooding, already a major source of natural disasters, would become much more frequent and severe. And there might be drastic changes in the climate of some regions as ocean currents shift. It’s always worth bearing in mind that London is at the same latitude as Labrador; without the Gulf Stream, Western Europe would be barely habitable. While there may be some benefits from a warmer climate, it seems almost certain that upheaval on this scale would make the United States, and the world as a whole, poorer than it would be otherwise. How much poorer? If ours were a preindustrial, primarily agricultural society, extreme climate change would be obviously catastrophic. But we have an advanced economy, the kind that has historically shown great ability to adapt to changed circumstances. If this sounds similar to my argument that the costs of emissions limits would be tolerable, it ought to: the same flexibility that should enable us to deal with a much higher carbon prices should also help us cope with a somewhat higher average temperature. But there are at least two reasons to take sanguine assessments of the consequences of climate change with a grain of salt. One is that, as I have just pointed out, it’s not just a matter of having warmer weather — many of the costs of climate change are likely to result from droughts, flooding and severe storms. The other is that while modern economies may be highly adaptable, the same may not be true of ecosystems. The last time the earth experienced warming at anything like the pace we now expect was during the Paleocene-Eocene Thermal Maximum, about 55 million years ago, when temperatures rose by about 11 degrees Fahrenheit over the course of around 20,000 years (which is a much slower rate than the current pace of warming). That increase was associated with mass extinctions, which, to put it mildly, probably would not be good for living standards. So how can we put a price tag on the effects of global warming? The most widely quoted estimates, like those in the Dynamic Integrated Model of Climate and the Economy, known as DICE, used by Yale’s William Nordhaus and colleagues, depend upon educated guesswork to place a value on the negative effects of global warming in a number of crucial areas,

171 especially agriculture and coastal protection, then try to make some allowance for other possible repercussions. Nordhaus has argued that a global temperature rise of 4.5 degrees Fahrenheit — which used to be the consensus projection for 2100 — would reduce gross world product by a bit less than 2 percent. But what would happen if, as a growing number of models suggest, the actual temperature rise is twice as great? Nobody really knows how to make that extrapolation. For what it’s worth, Nordhaus’s model puts losses from a rise of 9 degrees at about 5 percent of gross world product. Many critics have argued, however, that the cost might be much higher. Despite the uncertainty, it’s tempting to make a direct comparison between the estimated losses and the estimates of what the mitigation policies will cost: climate change will lower gross world product by 5 percent, stopping it will cost 2 percent, so let’s go ahead. Unfortunately the reckoning is not that simple for at least four reasons. First, substantial global warming is already “baked in,” as a result of past emissions and because even with a strong climate-change policy the amount of carbon dioxide in the atmosphere is most likely to continue rising for many years. So even if the nations of the world do manage to take on climate change, we will still have to pay for earlier inaction. As a result, Nordhaus’s loss estimates may overstate the gains from action. Second, the economic costs from emissions limits would start as soon as the policy went into effect and under most proposals would become substantial within around 20 years. If we don’t act, meanwhile, the big costs would probably come late this century (although some things, like the transformation of the American Southwest into a dust bowl, might come much sooner). So how you compare those costs depends on how much you value costs in the distant future relative to costs that materialize much sooner. Third, and cutting in the opposite direction, if we don’t take action, global warming won’t stop in 2100: temperatures, and losses, will continue to rise. So if you place a significant weight on the really, really distant future, the case for action is stronger than even the 2100 estimates suggest. Finally and most important is the matter of uncertainty. We’re uncertain about the magnitude of climate change, which is inevitable, because we’re talking about reaching levels of carbon dioxide in the atmosphere not seen in millions of years. The recent doubling of many modelers’ predictions for 2100 is itself an illustration of the scope of that uncertainty; who knows what revisions may occur in the years ahead. Beyond that, nobody really knows how much damage would result from temperature rises of the kind now considered likely. You might think that this uncertainty weakens the case for action, but it actually strengthens it. As Harvard’s Martin Weitzman has argued in several influential papers, if there is a significant chance of utter catastrophe, that chance — rather than what is most likely to happen — should dominate cost-benefit calculations. And utter catastrophe does look like a realistic possibility, even if it is not the most likely outcome. Weitzman argues — and I agree — that this risk of catastrophe, rather than the details of cost- benefit calculations, makes the most powerful case for strong climate policy. Current projections of global warming in the absence of action are just too close to the kinds of numbers associated with doomsday scenarios. It would be irresponsible — it’s tempting to say criminally irresponsible — not to step back from what could all too easily turn out to be the edge of a cliff. Still that leaves a big debate about the pace of action. The Ramp Versus the Big Bang

172 Economists who analyze climate policies agree on some key issues. There is a broad consensus that we need to put a price on carbon emissions, that this price must eventually be very high but that the negative economic effects from this policy will be of manageable size. In other words, we can and should act to limit climate change. But there is a ferocious debate among knowledgeable analysts about timing, about how fast carbon prices should rise to significant levels. On one side are economists who have been working for many years on so-called integrated- assessment models, which combine models of climate change with models of both the damage from global warming and the costs of cutting emissions. For the most part, the message from these economists is a sort of climate version of St. Augustine’s famous prayer, “Give me chastity and continence, but not just now.” Thus Nordhaus’s DICE model says that the price of carbon emissions should eventually rise to more than $200 a ton, effectively more than quadrupling the cost of coal, but that most of that increase should come late this century, with a much more modest initial fee of around $30 a ton. Nordhaus calls this recommendation for a policy that builds gradually over a long period the “climate-policy ramp.” On the other side are some more recent entrants to the field, who work with similar models but come to different conclusions. Most famously, Nicholas Stern, an economist at the London School of Economics, argued in 2006 for quick, aggressive action to limit emissions, which would most likely imply much higher carbon prices. This alternative position doesn’t appear to have a standard name, so let me call it the “climate-policy big bang.” I find it easiest to make sense of the arguments by thinking of policies to reduce carbon emissions as a sort of public investment project: you pay a price now and derive benefits in the form of a less-damaged planet later. And by later, I mean much later; today’s emissions will affect the amount of carbon in the atmosphere decades, and possibly centuries, into the future. So if you want to assess whether a given investment in emissions reduction is worth making, you have to estimate the damage that an additional ton of carbon in the atmosphere will do, not just this year but for a century or more to come; and you also have to decide how much weight to place on harm that will take a very long time to materialize. The policy-ramp advocates argue that the damage done by an additional ton of carbon in the atmosphere is fairly low at current concentrations; the cost will not get really large until there is a lot more carbon dioxide in the air, and that won’t happen until late this century. And they argue that costs that far in the future should not have a large influence on policy today. They point to market rates of return, which indicate that investors place only a small weight on the gains or losses they expect in the distant future, and argue that public policies, including climate policies, should do the same. The big-bang advocates argue that government should take a much longer view than private investors. Stern, in particular, argues that policy makers should give the same weight to future generations’ welfare as we give to those now living. Moreover, the proponents of fast action hold that the damage from emissions may be much larger than the policy-ramp analyses suggest, either because global temperatures are more sensitive to greenhouse-gas emissions than previously thought or because the economic damage from a large rise in temperatures is much greater than the guesstimates in the climate-ramp models. As a professional economist, I find this debate painful. There are smart, well-intentioned people on both sides — some of them, as it happens, old friends and mentors of mine — and each side has scored some major points. Unfortunately, we can’t just declare it an honorable draw, because there’s a decision to be made.

173 Personally, I lean toward the big-bang view. Stern’s moral argument for loving unborn generations as we love ourselves may be too strong, but there’s a compelling case to be made that public policy should take a much longer view than private markets. Even more important, the policy-ramp prescriptions seem far too much like conducting a very risky experiment with the whole planet. Nordhaus’s preferred policy, for example, would stabilize the concentration of carbon dioxide in the atmosphere at a level about twice its preindustrial average. In his model, this would have only modest effects on global welfare; but how confident can we be of that? How sure are we that this kind of change in the environment would not lead to catastrophe? Not sure enough, I’d say, particularly because, as noted above, climate modelers have sharply raised their estimates of future warming in just the last couple of years. So what I end up with is basically Martin Weitzman’s argument: it’s the nonnegligible probability of utter disaster that should dominate our policy analysis. And that argues for aggressive moves to curb emissions, soon. The Political Atmosphere As I’ve mentioned, the House has already passed Waxman-Markey, a fairly strong bill aimed at reducing greenhouse-gas emissions. It’s not as strong as what the big-bang advocates propose, but it appears to move faster than the policy-ramp proposals. But the vote on Waxman-Markey, which was taken last June, revealed a starkly divided Congress. Only 8 Republicans voted in favor of it, while 44 Democrats voted against. And the odds are that it would not pass if it were brought up for a vote today. Prospects in the Senate, where it takes 60 votes to get most legislation through, are even worse. A number of Democratic senators, representing energy-producing and agricultural states, have come out against cap and trade (modern American agriculture is strongly energy- intensive). In the past, some Republican senators have supported cap and trade. But with partisanship on the rise, most of them have been changing their tune. The most striking about- face has come from John McCain, who played a leading role in promoting cap and trade, introducing a bill broadly similar to Waxman-Markey in 2003. Today McCain lambastes the whole idea as “cap and tax,” to the dismay of former aides. Oh, and a snowy winter on the East Coast of the U.S. has given climate skeptics a field day, even though globally this has been one of the warmest winters on record. So the immediate prospects for climate action do not look promising, despite an ongoing effort by three senators — John Kerry, Joseph Lieberman and Lindsey Graham — to come up with a compromise proposal. (They plan to introduce legislation later this month.) Yet the issue isn’t going away. There’s a pretty good chance that the record temperatures the world outside Washington has seen so far this year will continue, depriving climate skeptics of one of their main talking points. And in a more general sense, given the twists and turns of American politics in recent years — since 2005 the conventional wisdom has gone from permanent Republican domination to permanent Democratic domination to God knows what — there has to be a real chance that political support for action on climate change will revive. If it does, the economic analysis will be ready. We know how to limit greenhouse-gas emissions. We have a good sense of the costs — and they’re manageable. All we need now is the political will. Paul Krugman is a Times columnist and winner of the 2008 Nobel Memorial Prize in Economic Science. His latest book is “The Return of Depression Economics and the Crisis of 2008.” http://www.nytimes.com/2010/04/11/magazine/11Economy-t.html

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Updated: New York, Apr 05 04:10 London, Apr 05 09:10 Tokyo, Apr 05 17:10 Geithner Counts on Delay to Let China Strengthen Yuan (Update1) By Greg Stohr and Phil Mattingly

April 5 (Bloomberg) -- Treasury Secretary Timothy F. Geithner, by delaying a report on global currency policies, is betting international diplomacy will work better than U.S. pressure to get China to strengthen the yuan. In an April 3 statement, Geithner announced the delay of the report, scheduled for April 15, and urged China to move toward a more flexible currency. He said a series of meetings over the next three months will be “critical” to bringing policy changes that lead to a stronger, “more balanced” global economy. The decision came days after Chinese President Hu Jintao announced plans to visit Washington for a nuclear summit April 12-13. The Treasury chief faces demands from Congress to label China a currency manipulator for keeping the value of the yuan little changed from about 6.83 to the dollar for almost two years. Geithner is instead expressing confidence that China, where financial markets are shut today for a holiday, will take steps on its own in the next several months to strengthen its currency. The move will give China space to relax currency controls “without looking like they’re kowtowing to U.S. pressure,” said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Connecticut. Gilmore said China may allow the yuan to appreciate in a “moderate” way within weeks. He said the options probably include widening the current peg’s trading band or returning to the July 2008 policy of a “crawling peg” that allowed for 5 percent annual appreciation. The “least likely” alternative: revaluing the currency in a “step-like fashion,” Gilmore said. U.S. Strategy In an April 2 interview with Bloomberg Television, Geithner said the U.S. strategy is “designed to increase the odds that China does decide to do what’s in their interest, which is to let their currency start to move up again, and that’ll be part of making sure we have a more healthy global recovery in place.” In the U.S., lawmakers from both parties said administration officials are wrong to expect that negotiations will prompt such a move from China’s leaders. With the U.S. unemployment rate hovering near a 26-year high, some lawmakers say China’s policies give its exporters an unfair advantage over their U.S. competitors.

175 Lawmakers’ Criticism “We are disappointed, but not surprised, by the administration’s decision,” Senator Charles E. Schumer, a New York Democrat, said in an e-mailed statement two days ago. “After five years of stonewalling, punctuated by occasional, but halting action by the Chinese, we have lost faith in bilateral negotiations on this issue.” Schumer, along with four other senators including South Carolina Republican Lindsey Graham, last month introduced legislation to require the Treasury to determine if a nation had a currency misaligned with the dollar and make it easier to respond by imposing import duties. The Treasury’s delay “underscores the urgent need” for Congress to pass such legislation, said Alan Tonelson, research fellow with the U.S. Business and Industry Council, a Washington-based organization representing about 2,000 manufacturing companies. “There can be no question that attempts to negotiate an end to China’s currency manipulation have failed for eight years and it is long past time for unilateral U.S. responses,” Tonelson said in an interview. Trade Sanctions Schumer, a member of the Senate Finance and Banking committees, said in his statement he intended to push forward with his legislation. Still, Yu Yongding, a former adviser to the People’s Bank of China, welcomed Geithner’s decision as “of course good news,” adding that confrontation is “meaningless.” “Problems between China and the U.S. can be solved through negotiations,” Yu said in a telephone interview from India yesterday. “If you want to hurt the other side, then you’ll hurt yourself.” Last month, Chinese executives, in interviews with Bloomberg News, joined in backing a stronger yuan, even as Premier Wen Jiabao says the currency isn’t undervalued. Yang Yuanqing, chief executive officer of Beijing-based computer maker Lenovo Group Ltd., said gains would boost consumers’ purchasing power. Qin Xiao, chairman of China Merchants Bank Co., said an end to the yuan’s 20-month peg to the dollar would let lenders set market-based interest rates. Chen Daifu, chairman of Hunan Lengshuijiang Iron & Steel Group Co., said a stronger currency would cut import costs. “There is pressure within China for a yuan revaluation, and as long as exports continue to rebound, there is a good chance that it will happen,” said Elizabeth Economy, director of Asia studies at the Council on Foreign Relations in New York. Investors’ Bets Last week, yuan forwards posted their biggest weekly gain in almost three months on mounting speculation China will loosen its grip on the currency after data showed an economic recovery is gathering pace. While a stronger yuan will help cut costs in imported fertilizers and pesticides, some agricultural sectors may face a “collapse” if exchange-rate pressures climb, the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce & Animal By- Products, said in an April 2 report on its Web site. Twelve-month non-deliverable forwards were little changed at 6.6485 per dollar as of 9:01 a.m. in Tokyo, reflecting bets the currency will strengthen 2.7 percent from the April 2 spot

176 rate of 6.8256, according to data compiled by Bloomberg. China’s financial markets are closed today for a national holiday. China’s foreign-exchange policy has contributed to a rise in the country’s reserves to $2.4 trillion, the world’s largest. That, in turn, has enabled China to become the largest foreign holder of U.S. Treasuries, with a total of $889 billion in January. Past Delays The Treasury hasn’t labeled any country a currency manipulator since 1994, and the department’s biannual report has been delayed in the past under both Democratic and Republican administrations. The latest delay “is probably the politically smart thing to do,” with Hu planning to be in Washington for talks with President Barack Obama, said Charles Freeman, a China expert at the Center for Strategic and International Studies in Washington. “I’m not sure Treasury really knows what it wants to do yet,” Freeman said. “It’s testing the political waters on Capitol Hill.” http://www.bloomberg.com/apps/news?pid=20601068&sid=acILVm_QpQ2A

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Updated: New York, Apr 05 04:10 London, Apr 05 09:10 Tokyo, Apr 05 17:10

RBA’s Next Move on Interest Rates ‘Very Close Call’ (Update1) By Michael Heath and Dan Petrie April 5 (Bloomberg) -- The Reserve Bank of Australia’s next policy move is a “very close call,” with economists and investors divided on whether Governor Glenn Stevens will raise interest rates for the fifth time in six meetings. The central bank will raise the overnight cash rate target to 4.25 percent tomorrow from 4 percent, according to 14 of 23 economists surveyed by Bloomberg News. The others expect no change. Futures traders estimate a 54 percent chance of an increase when the decision is announced at 2:30 p.m. in Sydney. Stevens last week said Australian house prices are “getting too high” and it is important to return interest rates to normal levels. The governor’s resolve will be tested by recent figures suggesting a softening of economic growth last quarter as government fiscal-stimulus measures waned. “It’s going to be a heated debate at Tuesday’s RBA board meeting,” said Annette Beacher, a senior strategist at TD Securities Ltd. in Singapore. “Our base case is for a pause at 4 percent, although it will be a very close call.” Home-building approvals fell for a second month in February, confounding economists who expected a rise, after the government reduced grants to first-time buyers. Demand for new homes surged in the second half of 2009 after Prime Minister Kevin Rudd tripled grants to first-time buyers of new homes to A$21,000 ($19,000). The grants were cut to A$7,000 on Jan. 1. Retail Sales Retail sales also tumbled in February as the central bank’s 1 percentage point increase in interest rates since October cooled domestic demand. Consumer spending accounts for more than half the Australian economy. Australian markets were closed for Easter today. Asian stocks rose, with the MSCI Asia Pacific Index climbing 0.2 percent to 126.79 as of 4:20 p.m. in Tokyo. Department store operator Myer Holdings Ltd. last month cut its annual revenue forecast as the impact from the Rudd government’s decision to distribute more than A$20 billion in cash to consumers fades. Most of the money was handed out in the first half of last year. Stevens’ rate increases have pushed up mortgage rates to about 50 basis points below what policy makers have described as a “normal” level. Rising house prices and surging demand among mining companies such as BHP Billiton Ltd. for skilled workers may force him to resume rate gains in coming months to stop inflation from accelerating. Housing Heat “Anecdotal evidence on the domestic housing market implies the sector is heating up, despite the RBA’s four rate hikes, and there is worrying evidence in mining regions that wage

178 pressure is building,” said Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney. Tomorrow’s decision comes as Rudd is due to hold an election within 12 months. Australian political leaders are vulnerable to rate increases as more than two-thirds of the population own homes, compared with less than 50 percent in some European nations. The past four increases added about A$200 a month to repayments on an average A$300,000 mortgage. Stevens is the only Group of 20 policy maker to raise borrowing costs this year. By contrast, the U.S. Federal Reserve Chairman Ben S. Bernanke said last month that the world’s biggest economy “continues to require the support of accommodative monetary policies.” The Fed has kept its benchmark rate close to zero since late 2008 and the European Central Bank’s rate is at a record low of 1 percent. Mining Investment A key reason for leading the world in raising borrowing costs is a forecast surge in company investment on new mines and resources projects such as the Chevron Corp.-led Gorgon natural gas project in Western Australia. Prices that exporters will get for iron ore and coal look likely to be “substantially higher than those received over the past year,” fueling a surge in Australia’s terms of trade that will boost domestic incomes and confidence, Assistant Governor Philip Lowe said last month. Employers boosted the working hours of staff in February by the most since 1998, a sign the job market is poised to strengthen in coming months as companies add to payrolls after exhausting scope for extended work shifts. Australia’s unemployment rate was 5.3 percent in February, almost half the level in Europe and the U.S. GDP rose in the fourth quarter at the fastest pace in almost two years, climbing 0.9 percent from the three months through September, a report showed the day after last month’s interest-rate decision. Point to Strength “Domestically, most economic indicators continued to point to a strengthening in economic activity,” policy makers said in the minutes of last month’s meeting, when they increased the benchmark by a quarter point. Companies such as Woolworths Ltd. are reporting higher earnings. Australia’s biggest retailer said first-half profit rose 11 percent to A$1.1 billion and Harvey Norman Holdings Ltd. said first-half net income jumped 60 percent on demand for televisions. In contrast, Myer’s full-year sales growth will be between zero and 2 percent, the company said March 11, slower than its November forecast for a 3 percent increase to A$3.36 billion. Sales for the first half rose 2 percent to A$1.8 billion. To contact the reporters for this story: Jacob Greber in Sydney at [email protected]; Daniel Petrie in Sydney at [email protected] Last Updated: April 5, 2010 03:28 EDT http://www.bloomberg.com/apps/news?pid=20601068&sid=afWYBca5wlmQ

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Opinion

April 4, 2010 OP-ED CONTRIBUTOR I Saw the Crisis Coming. Why Didn’t the Fed? By MICHAEL J. BURRY Cupertino, Calif. ALAN GREENSPAN, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the housing bubble. “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.” But that is not how I remember it. Back in 2005 and 2006, I argued as forcefully as I could, in letters to clients of my investment firm, Scion Capital, that the mortgage market would melt down in the second half of 2007, causing substantial damage to the economy. My prediction was based on my research into the residential mortgage market and mortgage-backed securities. After studying the regulatory filings related to those securities, I waited for the lenders to offer the most risky mortgages conceivable to the least qualified buyers. I knew that would mark the beginning of the end of the housing bubble; it would mean that prices had risen — with the expansion of easy mortgage lending — as high as they could go. I had begun to worry about the housing market back in 2003, when lenders first resurrected interest-only mortgages, loosening their credit standards to generate a greater volume of loans. Throughout 2004, I had watched as these mortgages were offered to more and more subprime borrowers — those with the weakest credit. The lenders generally then sold these risky loans to Wall Street to be packaged into mortgage-backed securities, thus passing along most of the risk. Increasingly, lenders concerned themselves more with the quantity of mortgages they sold than with their quality. Meanwhile, home buyers, convinced by recent history that real estate prices would always rise, readily signed onto whatever mortgage would get them the biggest house. The incentive for fraud was great: the F.B.I. reported that its mortgage fraud caseload increased fivefold from 2001 to 2004. At the same time, I also watched how ratings agencies vouched for subprime mortgage-backed securities. To me, these agencies seemed not to be paying much attention. By mid-2005, I had so much confidence in my analysis that I staked my reputation on it. That is, I purchased credit default swaps — a type of insurance — on billions of dollars worth of both subprime mortgage-backed securities and the bonds of many of the financial companies that would be devastated when the real estate bubble burst. As the value of the bonds fell, the value of the credit default swaps would rise. Our swaps covered many of the firms that failed or nearly failed, including the insurer American International Group and the mortgage lenders Fannie Mae and Freddie Mac. I entered these trades carefully. Suspecting that my Wall Street counterparties might not be able or willing to pay up when the time came, I used six counterparties to minimize my

180 exposure to any one of them. I also specifically avoided using Lehman Brothers and Bear Stearns as counterparties, as I viewed both to be mortally exposed to the crisis I foresaw. What’s more, I demanded daily collateral settlement — if positions moved in our favor, I wanted cash posted to our account the next day. This was something I knew that Goldman Sachs and other derivatives dealers did not demand of AAA-rated A.I.G. I believed that the collapse of the subprime mortgage market would ultimately lead to huge failures among the largest financial institutions. But at the time almost no one else thought these trades would work out in my favor. During 2007, under constant pressure from my investors, I liquidated most of our credit default swaps at a substantial profit. By early 2008, I feared the effects of government intervention and exited all our remaining credit default positions — by auctioning them to the many Wall Street banks that were themselves by then desperate to buy protection against default. This was well in advance of the government bailouts. Because I had been operating in the face of strong opposition from both my investors and the Wall Street community, it took everything I had to see these trades through to completion. Disheartened on many fronts, I shut down Scion Capital in 2008. Since then, I have often wondered why nobody in Washington showed any interest in hearing exactly how I arrived at my conclusions that the housing bubble would burst when it did and that it could cripple the big financial institutions. A week ago I learned the answer when Al Hunt of Bloomberg Television, who had read Michael Lewis’s book, “The Big Short,” which includes the story of my predictions, asked Mr. Greenspan directly. The former Fed chairman responded that my insights had been a “statistical illusion.” Perhaps, he suggested, I was just a supremely lucky flipper of coins. Mr. Greenspan said that he sat through innumerable meetings at the Fed with crack economists, and not one of them warned of the problems that were to come. By Mr. Greenspan’s logic, anyone who might have foreseen the housing bubble would have been invited into the ivory tower, so if all those who were there did not hear it, then no one could have said it. As a nation, we cannot afford to live with Mr. Greenspan’s way of thinking. The truth is, he should have seen what was coming and offered a sober, apolitical warning. Everyone would have listened; when he talked about the economy, the world hung on every single word. Unfortunately, he did not give good advice. In February 2004, a few months before the Fed formally ended a remarkable streak of interest-rate cuts, Mr. Greenspan told Americans that they would be missing out if they failed to take advantage of cost-saving adjustable-rate mortgages. And he suggested to the banks that “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.” Within a year lenders made interest-only adjustable-rate mortgages readily available to subprime borrowers. And within 18 months lenders offered subprime borrowers so-called pay-option adjustable-rate mortgages, which allowed borrowers to make partial monthly payments and have the remainder added to the loan balance (much like payments on a credit card). Observing these trends in April 2005, Mr. Greenspan trumpeted the expansion of the subprime mortgage market. “Where once more-marginal applicants would simply have been denied credit,” he said, “lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately.”

181 Yet the tide was about to turn. By December 2005, subprime mortgages that had been issued just six months earlier were already showing atypically high delinquency rates. (It’s worth noting that even though most of these mortgages had a low two-year teaser rate, the borrowers still had early difficulty making payments.) The market for subprime mortgages and the derivatives thereof would not begin its spectacular collapse until roughly two years after Mr. Greenspan’s speech. But the signs were all there in 2005, when a bursting of the bubble would have had far less dire consequences, and when the government could have acted to minimize the fallout. Instead, our leaders in Washington either willfully or ignorantly aided and abetted the bubble. And even when the full extent of the financial crisis became painfully clear early in 2007, the Federal Reserve chairman, the Treasury secretary, the president and senior members of Congress repeatedly underestimated the severity of the problem, ultimately leaving themselves with only one policy tool — the epic and unfair taxpayer-financed bailouts. Now, in exchange for that extra year or two of consumer bliss we all enjoyed, our children and our children’s children will suffer terrible financial consequences. It did not have to be this way. And at this point there is no reason to reflexively dismiss the analysis of those who foresaw the crisis. Mr. Greenspan should use his substantial intellect and unsurpassed knowledge of government to ascertain and explain exactly how he and other officials missed the boat. If the mistakes were properly outlined, that might both inform Congress’s efforts to improve financial regulation and help keep future Fed chairmen from making the same errors again. Michael J. Burry ran the hedge fund Scion Capital from 2000 until 2008. http://www.nytimes.com/2010/04/04/opinion/04burry.html

182 Economy April 4, 2010 Greenspan Cites Evidence of Economic ‘Momentum’ By JOSEPH BERGER Alan Greenspan, the former chairman of the Federal Reserve and a self-described Republican libertarian, on Sunday reinforced increasingly confident assessments by the Obama administration that the nation’s latest job numbers reveal a resurgent economy. “There is a momentum building up which is really just beginning, and it’s got a way to go,” Mr. Greenspan said on ABC’s “This Week” television program, when asked about Friday’s report that 162,000 jobs had been created in March. Mr. Greenspan pointed out that corporate investment in new equipment “is coming back in a fairly substantial way” and that purchasing managers are building up product inventories for the first time in months. “The momentum is very clearly there, and I doubt very much that we’re going to run out of that momentum until very late in the year,” he said, adding that the odds that the country would plunge anew into a recession have fallen significantly. His remarks supported comments by Lawrence H. Summers and Christina D. Romer, administration officials who also appeared on the Sunday talk shows. Mr. Summers, the president’s top economic adviser, predicted “continued progress in job creation” and said the economy is “running somewhat ahead of what the administration was forecasting.” “We’re in a very different place than we were a year ago,” he said about the jobs situation on “This Week.” “A year ago we were losing 600,000 jobs a month. Now the process of job creation has started. We expect that it will accelerate.” He took pains to add that it was important to pump up consumer demand with measures that President Obama is pressing for, like increasing spending on construction projects and boosting the flow of credit to small business. Mr. Summers had predicted in December that the economy would stop losing jobs by the spring. Despite the addition of the 162,000 jobs in March, 48,000 of which were temporary U.S. Census hires, the monthly payroll report also showed that the rate of unemployment had remained unchanged at 9.7 percent. Mr. Summers tried to account for this paradox, noting that “as conditions get better, more people decide to look for work and are counted in the labor force, so sometimes it’s frustrating and the progress doesn’t show up immediately in the unemployment rate.” Mrs. Romer, chairwoman of the Council of Economics Advisers, agreed that the jobless figures may not turn around quickly. Given the large number of new entrants into the nation’s labor pool, she said, the economy’s 3 percent growth rate may not be enough to make a strong dent in the unemployment rate. Mr. Summers was asked about a delay, confirmed by the Treasury Department on Saturday, of a report to Congress on currencies and exchange rates in which some congressmen hoped the administration would label China a “currency manipulator.” Mr. Summers denied that the report was put off because the Obama administration wants China’s cooperation on sanctions against Iran. Rather, he said, the administration felt it would be prudent to wait until it had “taken stock of what kind of measurable progress we were able to generate” out of meetings with Chinese officials at three upcoming economic meetings. http://www.nytimes.com/2010/04/05/business/economy/05econ.html?hp

183

REPORTAJE: Primer plano El yuan tensa las relaciones EE UU-China Una guerra comercial entre las dos superpotencias frenaría la recuperación mundial Mal ambiente "Incluso si la burbuja estalla en China, su impacto sería limitado" Falso culpable

Washington acusa a Pekín de buscar ventaja competitiva con una divisa baja China responde que no es responsable del déficit comercial de EE UU Pekín podría subir la cotización del yuan para frenar la inflación La industria textil china teme que muchas empresas vayan a la quiebra En año electoral vuelven a sonar en EE UU melodías proteccionistas

Obama se arriesga a perder el apoyo de China en otros asuntos clave

JOSÉ REINOSO / SANDRO POZZI 04/04/2010 El yuan o renminbi es una fuente constante de tensión en las relaciones entre China y EE UU. Desde hace años, Washington presiona a Pekín para que aprecie su divisa porque, según dice, el valor de la moneda china respecto al dólar es inferior -entre un 25% y un 40%, dependiendo de los economistas- al que le corresponde, lo que proporciona una fuerte ventaja competitiva a las empresas exportadoras asiáticas. Legisladores, empresarios y sindicatos de EE UU sostienen que esta práctica ha costado muchos puestos de trabajo en su país y exigen represalias si China no cambia de actitud. En EE UU es año electoral. Y quienes aspiran a representar a sus conciudadanos en Washington a partir de noviembre hacen sonar los tambores de guerra. El proteccionismo frente a China es una melodía recurrente de las campañas. Ya pasó hace dos años, cuando Barack Obama se postulaba por el control del Despacho Oval. Entonces acusó a Pekín de mantener su divisa artificialmente devaluada. ¿Lo sigue pensando ahora que es presidente? Si lo cree, lo dice con un lenguaje más diplomático. En la Casa Blanca piden que las preguntas sobre el asunto se hagan a Timothy Geithner, secretario del Tesoro y responsable de la política de cambio en EE UU. En una reciente entrevista, Geithner reiteró que espera que en algún momento China abra la mano para que el cambio del yuan sea más flexible y fluctúe libremente. "Va en su propio interés", dijo. Ante las presiones, el Gobierno de Pekín aguanta el tipo. Argumenta que la causa del enorme déficit comercial estadounidense con China no es el yuan e insiste en que mantendrá la tasa de cambio "básicamente estable". Así lo volvió a recordar el primer ministro chino, Wen Jiabao, durante la rueda de prensa posterior a la clausura de la sesión anual del Parlamento, cuando se mostró inflexible sobre el tema. Wen dijo que el renminbi no está infravalorado, defendió que su estabilidad ha jugado "un importante papel" en la lucha contra la crisis económica global y lanzó una advertencia: "Nos oponemos a la práctica de que los países se señalen mutuamente con el dedo o a que tomen medidas duras para forzar a otros países a que aprecien sus divisas. Este tipo de actuación no beneficia a la reforma del régimen de tasa de cambio del renminbi".

184 El mismo discurso, sin apartarse un milímetro, han repetido uno tras otro, desde entonces, responsables de diferentes departamentos, a pesar de que la guerra del yuan ha alcanzado en las últimas semanas el punto de ignición. "Hasta ahora, los conflictos [entre los dos países, como el caso Google, la venta de armas estadounidenses a Taiwan y las relaciones de Washington con el Dalai Lama] han sido más o menos controlados, pero existe el peligro de que se produzca una escalada y se convierta en un conflicto sistémico, avivado por la opinión pública antagonista en ambos lados del Pacífico", afirma John Delury, director asociado del Centro para las Relaciones entre China y EE UU de Asia Society, una organización no gubernamental con sede en Nueva York que se dedica a difundir el conocimiento de Asia. El viceministro de Comercio chino, Zhong Shan, dijo durante una vista a Washington, la semana pasada, que es un error presionar a Pekín y culpó del desequilibrio comercial a las restricciones que impone EE UU a la exportación de alta tecnología, que tiene aplicaciones tanto civiles como militares. China es el principal banquero de EE UU. La deuda nacional bruta estadounidense asciende a 12,4 billones de dólares (85% del PIB). De esta cantidad, 7,5 billones son deuda neta y la mitad está en manos extranjeras. Los chinos tienen en torno a 890.000 millones. En julio de 2005, la moneda china pasó de estar ligada únicamente al dólar a depender de una cesta de divisas, entre otras el euro y el yen japonés. En los tres años que siguieron, el renminbi se apreció un 21% respecto al dólar, pero al mismo tiempo el superávit comercial chino con EE UU creció un 20,8% al año, según recuerda Pekín. Desde mediados de 2008, el Gobierno ha mantenido el valor del yuan prácticamente fijo respecto al billete verde -alrededor de 6,83 yuanes por dólar- para amortiguar el efecto de la crisis global sobre los exportadores, pero el superávit chino ha descendido, insiste Pekín. "Los productos de mano de obra intensiva importados desde China han ayudado a mantener bajo el coste de vida de los americanos, incluso en un momento en el que andan cortos de dinero", dijo el viceministro de Comercio chino. "Sin los bienes de consumo chinos, el índice de precios estadounidense crecería dos puntos porcentuales extra cada año. Sólo un renminbi y un dólar básicamente estables son beneficiosos para los intereses generales de la comunidad internacional". Zhiqun Zhu, profesor de Ciencias Políticas y Relaciones Internacionales en la Universidad Bucknell (Pensilvania), alerta del riesgo que supondría un recrudecimiento del conflicto. "Si estalla una guerra comercial, quienes sufrirán serán los consumidores americanos. Ignoran que una apreciación súbita del renminbi provocaría probablemente inestabilidad económica y política en China, que, a su vez, derivará en trastornos económicos en Asia", explica. Pero en el Capitolio están ansiosos, sobre todo al ver que el paro roza desde hace cuatro meses el 10% en EE UU. La actividad es frenética entre los congresistas, que exigen que el Tesoro reaccione. Quieren que en su informe sobre política de cambio, previsto para el 15 de abril, certifique que China manipula su divisa y que con esa política pone a los exportadores estadounidenses en una situación de desventaja. Los congresistas de los Estados con gran peso del sector manufacturero consideran la posición china como un subsidio que roba empleos en EE UU. Schmald Tool & Die es una pequeña empresa con sede en Michigan que ilustra el problema. La competencia, admite Laurie Moncrieff, su gestora, es un hecho en el día a día. Pero en su caso, dice, no se trata de competir contra otra empresa, sino contra todo un país. Y no es que los productos chinos sean más baratos que los suyos, explica, sino que cuestan menos que la materia prima que usa para hacerlos. "¿Cómo voy a contratar a gente si no puedo vender mis herramientas?", dijo Moncrieff durante un debate organizado por el Economic Policy Institute.

185 El sindicato AFL-CIO, citando un estudio del Peterson Institute for International Economics, denuncia que la devaluación del yuan ha costado hasta tres millones de empleos en EE UU. Por eso pide a Obama que cumpla la promesa hecha en la campaña electoral hace dos años y actúe para crear empleo en EE UU. Las estadísticas del Congreso revelan que la cuota china en el déficit comercial de productos no petroleros de EE UU ha crecido del 26% al 83% en lo que va de siglo. Como medida de presión, algunos legisladores claman por la adopción de medidas proteccionistas hacia los productos made in China. En el tenso clima político de Washington, éste es el único asunto en que demócratas y republicanos están unidos frente a un enemigo común. El 15 de marzo, 130 congresistas enviaron una carta a Timothy Geithner y al secretario de Comercio, Gary Locke, en la que piden que se impongan sanciones arancelarias. Para ello, los senadores Charles Schumer, demócrata, y Lindsey Graham, republicano, han elaborado un proyecto de ley que refuerza los poderes de la Casa Blanca para presionar a Pekín. Obama ha evitado pronunciarse sobre la propuesta. "Si los chinos no lo hacen, les forzaremos a hacerlo", afirma el republicano Sam Brownback. De salir adelante la iniciativa, el Departamento de Comercio deberá imponer un arancel a los productos que considere favorecidos por una divisa artificialmente devaluada. El país que - según el criterio de Washington- manipule su divisa contará con 90 días para ajustar el cambio si quiere evitar la penalización y que su caso sea llevado a la Organización Mundial de Comercio. Martin Feldstein, economista en Harvard y asesor de la Casa Blanca, recomienda discreción a quienes quieren que China dé un paso adelante: "Si se están callados durante dos meses, creo que los chinos dirán que, por la fortaleza de su economía, unilateralmente elevan el valor del renminbi". Laura D'Andrea Tyson, otra asesora de la Casa Blanca, también hace un llamamiento a la calma. "Con la politización de este asunto, es más difícil que tome decisiones económicas separadas de la política", dijo. Los estrategas de Wells Fargo recuerdan que a los chinos no les gusta que les presionen. Y en este sentido, el senador Graham recuerda que la Administración Bush "nunca apretó el gatillo por miedo". Lo que está por ver es si Obama querrá poner en peligro la relación con China al hacer frente a otros retos comunes, como el cambio climático o la proliferación nuclear. La resistencia del Ejecutivo chino a revaluar su divisa tiene como telón de fondo la economía nacional. "Una apreciación sustancial del yuan afectaría a las exportaciones y dispararía el precio de los activos, con el consiguiente riesgo de burbujas", advirtió Chen Yulu, vicepresidente de la Universidad Renmin (Pekín), en un foro celebrado el domingo pasado en la capital china, según recoge la prensa oficial. La industria textil china ha advertido que una apreciación tendría un serio impacto sobre el sector y provocaría numerosas quiebras de empresas. El Consejo Textil y de Confección de China asegura que un alza de un punto porcentual del renminbi erosionaría otro tanto el margen del sector, que, según dice, es del 4% de media. La mayoría de los economistas participantes en el foro del domingo consideran, sin embargo, que una revaluación moderada y gradual ayudará a largo plazo a la reestructuración de la economía china. Esto, unido a la posibilidad de que Washington pase a la acción y tome medidas duras, está haciendo moverse a Pekín. El Gobierno chino es sensible a las presiones externas, aunque en público diga lo contrario y evite reaccionar rápidamente a las mismas para no parecer débil tanto dentro como fuera de sus fronteras. Pero existe la sensación creciente entre los analistas de que Pekín dejará que el yuan comience a apreciarse -como hizo en 2005- para domar la inflación quizá a partir del

186 segundo trimestre. Al mismo tiempo, creen que mantendrá las riendas tensas y no permitirá grandes saltos. Fan Gang, consejero del Banco Central, publicó un artículo la semana pasada en el que dijo que China "podría retomar una flotación controlada de la tasa de cambio, especialmente si las incertidumbres sobre la situación económica tras la crisis disminuyen". Más lejos han ido dos nuevos consejeros del Banco Central chino nombrados el lunes pasado. Li Daokui y Xia Bin han manifestado claramente esta semana que Pekín debe acabar con el anclaje del yuan al dólar en vigor desde 2008. "Una forma de relajar la presión sobre la tasa de cambio del renminbi es hacer un ajuste por propia iniciativa china", ha dicho Li, economista de la Universidad de Qinghua, quien defiende en la renombrada revista Caijing que la decisión debería llevarse a cabo antes de septiembre para que el debate sobre la moneda china no se convierta en tema político caliente de cara a las elecciones estadounidenses. No todos en EE UU piensan que Pekín está recurriendo a prácticas predatorias. El Atlantic Council argumenta que la acumulación de reservas por parte de China -a un ritmo de 1.000 millones diarios- no es resultado de la política de cambio, sino de la regulación laxa en EE UU. Es más, como señalan desde el Council on Foreign Relations tomando como referencia los mismos datos que maneja el Congreso, buena parte del déficit comercial con China es fruto de la actividad de multinacionales de EE UU que se trasladaron al país asiático para sacar ventaja de los bajos costes laborales. En 1986 representaba el 1,9%. En 2006, el 58,2%. http://www.elpais.com/articulo/primer/plano/yuan/tensa/relaciones/EE/UU- China/elpepueconeg/20100404elpneglse_2/Tes?print=1

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ENTREVISTA: AYAZ EBRAHIM Consejero Delegado del HSBC para Asia-Pacífico "Incluso si la burbuja estalla en China, su impacto sería limitado"

Con un 10% de paro, es normal que EE UU busque culpar a alguien" "A diferencia de España o Reino Unido, en China no hay mucha deuda" ALICIA GONZÁLEZ 04/04/2010 Ayaz Ebrahim (Hong Kong, 1964) defiende con ahínco los avances que han impulsado las economías asiáticas en los últimos años y eso es lo que les viene a contar a los inversores a Madrid. Pero también es realista: ni China ni India tienen un tamaño económico suficiente como para confiar en que nos saquen a todos de la crisis. Al menos, esta vez. Pregunta. Si no lo hace Asia, ¿quién va a liderar la recuperación? Respuesta. Creo que el crecimiento mundial va a seguir siendo moderado muchos años. Claramente, la recuperación no va a tener forma de V a nivel global, aunque eso es lo que estamos viendo para Asia, con un 10% en el caso de China y un 7% en el de India. Son crecimientos altos, pero no son aún economías de un tamaño significativo como para arrastrar a Europa o a EE UU. P. ¿Podemos decir que Asia ya ha recuperado todo lo perdido con la crisis? R. Hasta cierto punto, sí. El paro probablemente todavía no ha vuelto a los niveles precrisis todavía, pero con la recuperación de la actividad industrial, del precio de la vivienda, de las Bolsas... es bastante probable que se recupere pronto. P. ¿Hasta dónde llegarán las tensiones entre China y EE UU por la cotización del yuan? R. Las autoridades chinas lo han dicho en diversas ocasiones, que creen que su divisa necesita un mecanismo de tipo de cambio más eficiente. Con eso básicamente están diciendo que algo va a pasar, de forma gradual. Creemos que lo que van a hacer es vincular el yuan a una cesta de monedas, tal y como ha hecho Singapur. Y creemos que volverán a dejar que su moneda se aprecie, quizá a finales de este año, mediante movimientos graduales que seguirán a lo largo de 2011. P. ¿Puede trasladarse esa tensión al ámbito comercial? R. Sin duda, la retórica se ha endurecido, pero no podría decir cuánta se destina a los consumidores domésticos en el caso de EE UU. Voy a atenerme a lo obvio y es que ningún proteccionismo comercial puede ser bueno y puede tener consecuencias que no pueden ser buenas para nadie. Aunque es comprensible que con el desempleo subiendo al 10%, los políticos necesitan buscar alguien a quien culpar. P. ¿Seguirá China siendo el principal comprador de bonos estadounidenses? R. Inevitablemente, sí. Pero el ritmo de compras se irá reduciendo gradualmente. Hace ya unos años que las autoridades chinas hicieron pública su decisión, como medida de prudencia, de diversificar sus reservas en moneda extranjera, y cualquier cosa que hagan ahora irá en la misma línea.

188 P. ¿Ve riesgo de que estalle la burbuja inmobiliaria en China? R. Hay mucha gente hablando de ello y, en algunas áreas, hay cierta preocupación. La más visible son las viviendas de alta gama en grandes ciudades y en el sector de propiedad comercial, donde hay elevados niveles de desocupación, aunque los precios se mantienen elevados, lo que apunta la existencia de una cierta especulación. Pero al margen de eso, no hay grandes evidencias de sobrecalentamiento. Aunque, incluso, si se produce una caída brusca en esos sectores, su impacto sobre el resto de la economía no sería significativo. Esas propiedades están en manos de un porcentaje muy pequeño de la población y, aunque los bancos pueden asumir una parte de las pérdidas, eso tampoco supone un gran impacto sobre su balance. Así que hay cierta preocupación, pero no es una gran amenaza. P. ¿Así que no sería como un nuevo Dubai, con las Bolsas mundiales entrando en pánico? R. No, no, para nada. Hay grandes diferencias. Las subidas de precios se han dado en una parte muy limitada del sector inmobiliario. Si mira al nivel general de precios en el sector, éste se mantiene plano, todo lo más con una leve subida, pero no importante. En segundo lugar, en China no hay mucha deuda. Las subidas de los precios de la vivienda en el Reino Unido, Dubai o España, por ejemplo, se han financiado con endeudamiento, mientras que en China los niveles de deuda son muy, muy bajos. - http://www.elpais.com/articulo/primer/plano/Incluso/burbuja/estalla/China/impacto/seria/limit ado/elpepueconeg/20100404elpneglse_4/Tes

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Falso culpable PABLO BUSTELO 04/04/2010 Muchas de las críticas que se hacen, especialmente en EE UU, al régimen cambiario chino pasan por alto varios aspectos esenciales. En primer lugar, lo que importa no es el tipo de cambio bilateral del yuan con el dólar, sino su tipo de cambio efectivo (TCE), esto es, ponderado por las monedas de los principales socios comerciales de China. Pues bien, el TCE del yuan ha aumentado el 10% en los dos últimos años y creció el 20% entre marzo de 2008 y marzo de 2009, una apreciación masiva en plena crisis, cuando las monedas de otros países asiáticos estaban cayendo y en un contexto de fuerte disminución de las exportaciones chinas. En todo el debate sobre el yuan conviene no olvidar que el TCE de otras economías asiáticas, como Taiwan, Filipinas o India, ha caído sustancialmente desde el inicio de la crisis global, favoreciendo su competitividad a expensas de la de China. Tampoco hay que perder de vista que las exportaciones chinas se redujeron nada menos que el 16% en 2009 y que se están recuperando lentamente, por lo que es muy difícil que se produzca una apreciación rápida y sustancial del yuan. En segundo término, el superávit por cuenta corriente de China ha mostrado una corrección notable: ha pasado del 11% del PIB en 2007 al 5,5% del PIB en 2010. Esa caída, a la mitad, es superior a la reducción del déficit corriente de EE UU, del 5,2% del PIB en 2007 al 3,5% del PIB en 2010. Esto es, China se está ajustando más rápidamente que EE UU. La razón, claro está, es que la evolución de la demanda interna ha sido muy diferente en uno y otro país. En 2009 creció mucho (el 12,3%) en China y cayó el 2,6%, quizá de manera insuficiente, en EE UU. En tercer lugar, el tipo de cambio del yuan con el dólar es asunto de dos. Hay economistas chinos que afirman que el dólar está sobrevalorado y que, por tanto, debería caer para ayudar a corregir los desequilibrios globales que subsisten y que seguramente volverán a crecer después de la crisis. En otras palabras, ¿por qué pretender que todo el ajuste cambiario lo haga el eslabón más débil? Todo eso no quiere decir que el yuan no esté infravalorado. Seguramente lo está, aunque no en la proporción que se suele usar en EE UU, que llega a alcanzar el 40%. Además, una apreciación contribuiría, en China, a reorientar el crecimiento hacia el consumo interno, a reducir el todavía alto superávit corriente, a retomar el control sobre la política monetaria (subcontrata a la Reserva Federal, a través del tipo de cambio fijo vigente desde julio de 2008) y a frenar las presiones inflacionistas. Sin ir más lejos, no tiene mucho sentido que un país en desarrollo, con todavía importante pobreza, tenga excedentes corrientes tan altos, porque eso significa que es prestamista neto con respecto al resto del mundo. Esto es, a China le interesa que su moneda se aprecie, aunque también que lo haga lenta y progresivamente, para perjudicar lo menos posible al sector exportador. Lo que no está nada claro es cómo una apreciación del yuan afectaría a la economía y al déficit comercial, bilateral y total, de EE UU. Aumentaría el valor de las importaciones y, por tanto, perjudicaría a los consumidores. Podría acelerar la inflación y hacer necesaria una política monetaria restrictiva antes de tiempo. Puesto que buena parte de las importaciones estadounidenses de productos chinos son intrafirma, la apreciación del yuan podría aumentar el déficit bilateral, como ocurrió entre 2005 y 2008. Incluso si cayese éste, el déficit total podría no disminuir, ya que aumentaría el desequilibrio con otros países asiáticos, como Vietnam o India, hacia los que se desplazarían las importaciones.

190 Tampoco es evidente que EE UU se arriesgue a una guerra comercial con China. Hay un equilibrio del terror financiero entre los dos países. China podría reaccionar a medidas proteccionistas diversificando sus enormes reservas en divisas (2,4 billones de dólares, de los que se cree que dos terceras partes están en la moneda americana) hacia el euro o el yen, provocando una caída desordenada del dólar. Esto es, la posibilidad de destrucción mutua asegurada (MAD en inglés) debería hacer pensar a quienes reclaman en EE UU medidas contundentes contra China. El problema, por consiguiente, no es el tipo de cambio del yuan. Los desequilibrios globales se deben, sobre todo, al sobreconsumo con endeudamiento y al alto déficit presupuestario en EE UU y, en mucha menor medida, al exceso de ahorro en China (que ha alcanzado un increíble 51% del PIB) y a un crecimiento alimentado con bajos precios de la energía y de otras materias primas. Washington debería pensar en poner orden en casa antes de buscar falsos culpables. Aunque China, por la cuenta que le trae, debe fomentar su consumo interno y propiciar una pauta de desarrollo menos devoradora de recursos. - http://www.elpais.com/articulo/primer/plano/Falso/culpable/elpepueconeg/20100404elpnegls e_3/Tes

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How Texas escaped the real estate crisis By Alyssa Katz Sunday, April 4, 2010; G02 It's one of the great mysteries of the mortgage crisis: Why did Texas -- Texas, of all places! -- escape the real estate bust? Only a dozen states have lower mortgage foreclosure and default rates, and all of them are rural places such as Montana and South Dakota, where they couldn't have a real estate boom if they tried. Texas's 3.1 million mortgage borrowers are a breed of their own among big states with big cities. Fewer than 6 percent of them are in or near foreclosure, according to the Mortgage Bankers Association; the national average is nearly 10 percent. The land in Texas might look an awful lot like its Sun Belt sisters Arizona (with 13 percent of its borrowers in foreclosure) or Nevada (19 percent) -- flat and generous in letting real estate developers sprawl where they will. Texas was even the home base of two of the nation's biggest bubble-era homebuilders, Centex and D.R. Horton. Texan subprime borrowers do especially well compared with their counterparts elsewhere. The foreclosure rate among subprime borrowers in Texas, at less than 19 percent, is the lowest of any state except Alaska. Part of the reason is that Texas didn't experience the stratospheric run-ups in home prices that other states did. On average, the home-resale prices of the 20 metro areas in the Case-Shiller Home Price Index peaked in 2006 after more than doubling since 2000. In Dallas, one of the 20 areas, they rose just 25 percent, gradually, and have barely declined. But there is a broader secret to Texas's success, and Washington reformers ought to be paying very close attention. If there's one thing that Congress can do to help protect borrowers from the worst lending excesses that fueled the mortgage and financial crises, it's to follow the Lone Star State's lead and put the brakes on "cash-out" refinancing and home-equity lending. A cash-out refinance is a mortgage taken out for a higher balance than the one on an existing loan, net of fees. Across the nation, cash-outs became ubiquitous during the mortgage boom, as skyrocketing house prices made it possible for homeowners, even those with bad credit, to use their home equity like an ATM. But not in Texas. There, cash-outs and home-equity loans cannot total more than 80 percent of a home's appraised value. There's a 12-day cooling-off period after an application, during which the borrower can pull out. And when a borrower refinances a mortgage, it's illegal to get even a dollar back. Texas really means it: All these protections, and more, are in the state constitution. The Texas restrictions on mortgage borrowing date from the first days of statehood in 1845, when the constitution banned home loans. "Delinquency and foreclosure rates are significantly lower in Texas," says Scott Norman of the Texas Mortgage Bankers Association. "The 80 percent loan-to-value limit -- that's the catalyst for a lot of this." Research from the Federal Reserve Bank of Dallas backs up Norman. Texas's low-ish unemployment rate, 8.6 percent, is a help. But so is the fact that fewer Texans took cash out of their home equity than did borrowers in any other state -- and took out less when they did. The more prevalent cash-out refinances are in a state, the more likely it is that mortgage borrowers there will run into trouble. For every 1 percentage point increase in a state's share

192 of subprime mortgages that are cash-out refinances, the likelihood of foreclosure in that state goes up by one-third of a percent. During the boom, cash-out refinancings were the unofficial currency of bubble states from Florida to California, beloved by mortgage brokers as a way to persuade existing homeowners to take out new loans repeatedly. As home values surged, the sales pitch was a slam-dunk: Borrowers could refinance their homes at extremely low interest rates, and based on newly reappraised property values, they could get more cash in their hands than they might earn in a year. Sure, these were teaser rates that would adjust upward after two years, but brokers routinely assured borrowers they could just refinance again before that happened. Subprime cash-out refinancings became a standard way for borrowers drowning in credit card debt to pay it off, boost their credit scores so they could qualify in a few months to refinance into a lower-rate prime mortgage, and get a big tax deduction in the bargain. Edmund L. Andrews recounts in his underappreciated book "Busted" how he conjured $50,000 this way. Homeowners and mortgage brokers weren't alone in their addiction to the cash that flowed from homes-as-ATMs. The entire U.S. economy was right there with them. One of Alan Greenspan's lesser-known contributions to the annals of the credit crisis was a pair of studies he co-authored for the Fed, sizing up exactly how much Americans borrowed against their home equity in the bubble and what it was they were spending their newfound (phantom) wealth on. Greenspan estimated that four-fifths of the trifold increase in American households' mortgage debt between 1990 and 2006 resulted from "discretionary extraction of home equity." Only one-fifth resulted from the purchase of new homes. In 2005 alone, U.S. homeowners extracted more than half of $1 trillion from their real estate via home-equity loans and cash- out refinances. About $263 billion of the proceeds went to consumer spending and to pay off other debts. As home prices skyrocketed in many markets, cash-out refinancings became standard, even in the relatively sober world of Fannie Mae and Freddie Mac. By 2006, Freddie Mac reported that 88 percent of refinance mortgages it purchased were for amounts at least 5 percent higher than borrowers' previous loan balances. Subprime lenders, in insane pursuit of risk, piled on with cash-out refinances for high-risk borrowers, often approaching the appraised value of the home. But not in Texas. A borrower there can secure a home-equity line of credit from a bank. And she can refinance her mortgage or take out a home-equity loan. But the total amount of debt on a home cannot exceed 80 percent of its appraised value, and any proceeds cannot be used to pay off other debts. Until 1998, Texans couldn't take out home-equity loans at all. The roots of this fierce resistance to debt's temptations go deep in Texas history. Seven years before the republic joined the Union in 1845, many homesteaders lost their property because of a bank panic and the resulting foreclosures. Drawing from Mexican codes protecting landholders, the new constitution of the state of Texas forbade lenders from peddling mortgages to homesteaders. The home-equity restrictions have not only helped keep cash-out refinances a rare breed in Texas; other risky mortgages were scarce there, too. The home-equity borrowing restrictions helped keep home prices from overinflating, and home buyers therefore didn't need to turn to exotic mortgages with such features as 2/28 ARMs, interest-only payments, or negative amortization in order to buy a home. Even when they did, Texas law requires these risky features to be clearly disclosed. Fewer than 20 percent of Texas subprime mortgages included any of them.

193 That's not to say that Texas borrowers didn't get into bubble trouble. Plenty bought overpriced houses, which is why one in eight Texans now owe more than their home is worth. And it was easy enough for lenders to get around the home-equity borrowing limits by using creative appraisals that pretend a home is worth more than it really is. But the casualties are orders of magnitude less than they would have been without the home-equity limits. Mimicking Texas would be the perfect opportunity to get our home-equity debt addiction under control and learn to live as an 80 percent nation. -- The Big Money Alyssa Katz is the author of "Our Lot: How Real Estate Came to Own Us." http://www.washingtonpost.com/wp- dyn/content/article/2010/04/03/AR2010040304983.html?wpisrc=nl_headline

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TRIBUNA: Laboratorio de ideas ALFONSO NOVALES Economía sostenible ALFONSO NOVALES 04/04/2010 El proyecto de Ley de Economía Sostenible recientemente aprobado por el Consejo de Ministros contiene elementos que podrían configurar las bases de un crecimiento futuro sólido, pero también constituye un tremendo reto, al requerir un enorme desarrollo normativo en un breve periodo de tiempo. Es, además, un texto del que intencionadamente se han omitido aspectos esenciales que se pretenden desarrollar con normas adicionales específicas durante este año y que hay que ver, por tanto, en un contexto legislativo más amplio. El presidente del Gobierno anunció en noviembre la propuesta de una Ley de Economía Sostenible sobre la que creó grandes expectativas, al hacer referencia a las muchas áreas en las que iba a implicar reformas de alto calado. Que se mencionase por primera vez, en una jornada organizada por The Economist, simultáneamente con el anuncio de que la recuperación en España ya había comenzado, inmediatamente desacreditado por las estadísticas laborales, no favoreció la credibilidad de la propuesta. Tampoco resultaba sencillo comprender cómo sus tres ejes de actuación (mejora del entorno económico, competitividad y sostenibilidad medioambiental) podían confluir hacia un crecimiento equilibrado y sostenible, ni tampoco qué se entendía por esto último. Además, en ausencia de una clara declaración de intenciones, las medidas anunciadas no parecían capaces de conducir a una rápida generación de empleo ni a una reactivación de la actividad productiva, y resultaban claramente insuficientes como reformas institucionales capaces de lograr un crecimiento sostenido. El anteproyecto de ley, dado a conocer tras el Consejo de Ministros del 27 de noviembre, se enfoca a una profunda reforma de nuestro modelo productivo, con un último fin: lograr un crecimiento equilibrado de la economía que permita crear empleo de forma estable y seguir configurando un modelo social más equitativo, definiendo así la concepción del Gobierno de una economía sostenible. Las 200 páginas del anteproyecto, todavía accesible en la web del Ministerio de Economía, describen una ley ómnibus, que requiere el desarrollo de un amplio conjunto de normas, puesto que pretende actuar en ámbitos económicos y sociales muy diversos. La comparecencia posterior del presidente en el Parlamento, recogida en el diario de sesiones de 2 de diciembre, aclaró notablemente la descripción de objetivos. Con la importante salvedad de su retraso, el texto está escrito con claridad y delimita sus objetivos con precisión. También está sujeto a serias limitaciones. Quizá la más importante sea no venir acompañado de una evaluación detallada, completa y realista de la situación actual de la economía española, que permitiera justificar la inclusión de unas medidas y la exclusión de otras. Es verdaderamente lamentable que en la actual situación los partidos políticos se presten a negociar el intercambio de medidas parciales para tratar las consecuencias de la crisis económica y financiera sin contar previamente con tal dictamen. Una política económica rigurosa requiere necesariamente la consistencia de las distintas medidas, cada una de las cuales debe diseñarse con un claro objetivo en mente. Sin una clara definición de los problemas a resolver, difícilmente puede establecerse un diseño coherente. La segunda limitación se refiere a su contenido. La protección del entorno natural y la recuperación de áreas que han sido dolorosamente dañadas con actuaciones ilegales en el pasado han quedado fuera de tan amplia declaración de actuaciones, dada la previsible importancia que el turismo de calidad ha de jugar en nuestro desarrollo futuro. Tampoco se

195 plantea la reforma de la financiación de los partidos políticos, explicitando claramente sus límites legales, que frecuentemente aparece alrededor de casos de corrupción y que tanta frustración social genera. Ni la agilización en la aplicación de las resoluciones judiciales, o la ruptura del control partidista de los nombramientos para altos tribunales, que pudieran restaurar la confianza del sector privado en la Administración de justicia. También hay carencias llamativas en algunas áreas incluidas en la ley: no cabe plantear una reforma definitiva de la formación profesional al margen del resto del sistema educativo, y el anteproyecto menciona la integración de las enseñanzas universitarias y de formación profesional. Pero las universidades españolas acaban de modificar por completo la estructura de sus titulaciones en un proceso excesivamente descentralizado, que no ha prestado atención alguna a la posible coordinación con la formación profesional. Otros temas importantes no se recogen en la amplia tabla de contenidos del proyecto de ley, aunque el presidente dio a ambos gran importancia en su presentación de la ley en el Parlamento el pasado diciembre. En la actual coyuntura es urgente acelerar los aspectos de reforma del mercado de trabajo, así como la reestructuración de nuestro sistema financiero. En el primer caso, no tanto porque las reformas permitan por sí solas generar empleo, sino por mejorar las expectativas de trabajadores potenciales y empresarios en cuanto a la contratación y potenciar definitivamente ganancias de productividad y competitividad futuras. La reestructuración financiera intentaría aliviar las dificultades de financiación de las empresas, especialmente las de tamaño mediano y pequeño, que no encuentran recursos en los mercados de crédito ni pueden recurrir a los mercados de valores. Respecto del mercado de trabajo, el presidente se emplazó en el Parlamento a evaluar para el primer trimestre de 2010: el sistema de negociación colectiva, el fomento de la reducción de jornada como instrumento de ajuste, la política de bonificaciones, la mejora de la intermediación laboral, la reducción de la dualidad y la temporalidad, el control de los procesos de incapacidad y la reducción de la brecha laboral por género, pero todo ello parece haber quedado supeditado a otros trámites más urgentes. También anunció medidas a tomar por el Consejo de Ministros a lo largo de 2010: modernización de la justicia, reforma de la Administración pública, revisión de nuestro sistema financiero, refuerzo de la lucha contra el fraude y la economía sumergida, impulsar la innovación y la competitividad de nuestras empresas, incluyendo la Ley de Ciencia, Tecnología e Innovación, planes de modernización sectorial, incluyendo un plan de competitividad industrial, impulsar el desarrollo de un modelo de energía sostenible que dote de mayor certidumbre al sector, así como un programa de inversiones en infraestructuras para el transporte sostenible. La propuesta de actuaciones alrededor de la Ley de Economía Sostenible representa, por tanto, una tarea formidable y, sin duda, necesaria. Requiere también una decidida voluntad política que permita un desarrollo completo de la ley. En los últimos años hemos oído promesas acerca de casi todas las áreas de reforma que en ella se recogen. Es inevitable recordar cómo en febrero de 2005 el Gobierno aprobó 100 medidas para mejorar la productividad de la economía, otra ley ómnibus, susceptible de generar las mayores expectativas, pero que ha quedado olvidada. Parece que pretendemos salir de los problemas aprobando nuevas normas sin preocuparnos excesivamente por su desarrollo y cumplimiento. De este modo, la estrategia se derrota a sí misma. De hecho, el actual proyecto de ley no hace referencia alguna a actuaciones previas ni a sus resultados. Tenemos, en muchos ámbitos, un exceso de legislación y un gran defecto de cumplimiento, específicamente en aspectos medioambientales. Mejorar drásticamente la calidad institucional es decisivo. Tan importante como acertar con las medidas adecuadas sería romper con estos vicios del pasado. http://www.elpais.com/articulo/primer/plano/Economia/sostenible/elpepueconeg/201004 04elpneglse_11/Tes Alfonso Novales es catedrático de Análisis Económico de la Universidad Complutense de Madrid.

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April 2, 2010 OP-ED COLUMNIST Financial Reform 101 By PAUL KRUGMAN Let’s face it: Financial reform is a hard issue to follow. It’s not like health reform, which was fairly straightforward once you cut through the nonsense. Reasonable people can and do disagree about exactly what we should do to avert another banking crisis. So here’s a brief guide to the debate — and an explanation of my own position. Leave on one side those who don’t really want any reform at all, a group that includes most Republican members of Congress. Whatever such people may say, they will always find reasons to say no to any actual proposal to rein in runaway bankers. Even among those who really do want reform, however, there’s a major debate about what’s really essential. One side — exemplified by Paul Volcker, the redoubtable former Federal Reserve chairman — sees limiting the size and scope of the biggest banks as the core issue in reform. The other side — a group that includes yours truly — disagrees, and argues that the important thing is to regulate what banks do, not how big they get. It’s easy to see where concerns about banks that are “too big to fail” come from. In the face of financial crisis, the U.S. government provided cash and guarantees to financial institutions whose failure, it feared, might bring down the whole system. And the rescue operation was mainly focused on a handful of big players: A.I.G., Citigroup, Bank of America, and so on. This rescue was necessary, but it put taxpayers on the hook for potentially large losses. And it also established a dangerous precedent: big financial institutions, we now know, will be bailed out in times of crisis. And this, it’s argued, will encourage even riskier behavior in the future, since executives at big banks will know that it’s heads they win, tails taxpayers lose. The solution, say people like Mr. Volcker, is to break big financial institutions into units that aren’t too big to fail, making future bailouts unnecessary and restoring market discipline. It’s a convincing-sounding argument, but I’m one of those people who doesn’t buy it. Here’s how I see it. Breaking up big banks wouldn’t really solve our problems, because it’s perfectly possible to have a financial crisis that mainly takes the form of a run on smaller institutions. In fact, that’s precisely what happened in the 1930s, when most of the banks that collapsed were relatively small — small enough that the Federal Reserve believed that it was O.K. to let them fail. As it turned out, the Fed was dead wrong: the wave of small-bank failures was a catastrophe for the wider economy. The same would be true today. Breaking up big financial institutions wouldn’t prevent future crises, nor would it eliminate the need for bailouts when those crises happen. The next bailout wouldn’t be concentrated on a few big companies — but it would be a bailout all the same. I don’t have any love for financial giants, but I just don’t believe that breaking them up solves the key problem. So what’s the alternative to breaking up big financial institutions? The answer, I’d argue, is to update and extend old-fashioned bank regulation.

197 After all, the U.S. banking system had a long period of stability after World War II, based on a combination of deposit insurance, which eliminated the threat of bank runs, and strict regulation of bank balance sheets, including both limits on risky lending and limits on leverage, the extent to which banks were allowed to finance investments with borrowed funds. And Canada — whose financial system is dominated by a handful of big banks, but which maintained effective regulation — has weathered the current crisis notably well. What ended the era of U.S. stability was the rise of “shadow banking”: institutions that carried out banking functions but operated without a safety net and with minimal regulation. In particular, many businesses began parking their cash, not in bank deposits, but in “repo” — overnight loans to the likes of Lehman Brothers. Unfortunately, repo wasn’t protected and regulated like old-fashioned banking, so it was vulnerable to a pre-1930s-type crisis of confidence. And that, in a nutshell, is what went wrong in 2007-2008. So why not update traditional regulation to encompass the shadow banks? We already have an implicit form of deposit insurance: It’s clear that creditors of shadow banks will be bailed out in time of crisis. What we need now are two things: (a) regulators need the authority to seize failing shadow banks, the way the Federal Deposit Insurance Corporation already has the authority to seize failing conventional banks, and (b) there have to be prudential limits on shadow banks, above all limits on their leverage. Does the reform legislation currently on the table do what’s needed? Well, it’s a step in the right direction — but it’s not a big enough step. I’ll explain why in a future column.

http://www.nytimes.com/2010/04/02/opinion/02krugman.html?pagewanted=print

April 3, 2010, 3:53 pm European Leisure I see that Ryan Avent has been sparring with Scott Sumner over the question of whether lower European GDP per capita compared with the United States — mainly the result of lower working hours rather than lower productivity — can be attributed to higher taxes. Uh, guys, there’s some research on this — in particular, a compelling paper by Alesina, Glaeser, and Sacerdote arguing that it’s not about taxes, it’s about unions and government policies encouraging longer vacations and shorter work weeks. In other words, it’s basically a social choice. One thing I really liked about the Alesina et al paper is that it gives a good hearing to both sides of the debate about whether it’s a good choice (Glaeser, at least, is fairly conservative, but also very fair-minded). Anyway, there’s no need to engage in top-of-the-head speculation on this subject. April 3, 2010, 12:11 pm pril 3, 2010, 12:37 pm Why Has Greece Dropped From The Headlines? It suddenly occurred to me that I wasn’t reading much about Greece the last few days. Was the situation stabilizing? Not according to the bond market and the CDS market, which both seem to show things heading off a cliff. Why the sudden hush?

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Hijacking Too Big To Fail This AP report illustrates perfectly why I’m worried about emphasizing the too-big-to-fail problem rather than the need for tighter regulation: End the public lifeline for large financial institutions, Republicans are demanding as they push back against Democratic efforts to set new rules for the financial industry. The GOP is trying to fight many of the changes that President Barack Obama and majority Democrats want. Legislation would give the government authority to split up big financial companies and force the industry to pay for its most massive failures. Republicans have offered alternative legislation that calls for new bankruptcy proceedings to dismantle failing institutions. This is the Republican strategy for beating back effective regulation: just claim that what we’re really doing is telling big banks, sternly, that there will be no more bailouts — they’re not too big to fail. And then, when the next financial crisis arrives — well, it will play just like 2008. President Palin or whoever will find themselves staring into the abyss — and conclude that they have to bail out the financial sector anyway. In a crisis, the financial system will be bailed out. That’s just a fact of life. So what we have to do is regulate the system to reduce the chances of crisis and the taxpayer costs when the bailout occurs. Let me be clear: I would very much like to limit the size of financial institutions, mainly for political economy reasons: it’s a real problem when these institutions start regulating the government rather than the other way around. But shrinking the banks is not a solution to the crisis problem, and the rhetoric of too-big-to-fail is in the process of being hijacked by people who really want no regulation at all.

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Sara Lee se bate en retirada La multinacional ajusta plantillas y vende empresas, plantas y marcas en España La compañía recompra acciones y se centra en alimentación

Unilever y P&G compran marcas de hogar y cuidado personal VIDAL MATÉ 04/04/2010 Sara Lee Corporation, multinacional norteamericana que cuenta con una facturación de casi 10.000 millones de euros, más de 40.000 trabajadores y presencia en 180 países en los sectores de la alimentación, bebidas, productos para el hogar, cuidado personal o insecticidas, se halla en retirada en el conjunto de la Unión Europea y sobre todo en España. Frente a la ofensiva compradora del pasado, en la actualidad ya se ha desprendido de una parte de las empresas y activos del grupo; tiene otros en venta, ha despedido y ajustado plantillas y, ante este escenario de actuaciones, hay dudas razonables sobre la continuidad del resto del grupo. Los sindicatos han acusado a la empresa de buscar la rentabilidad a cualquier precio, de trocear las divisiones de hogar, higiene y cuidado personal, y de cargar de interrogantes el futuro de muchos de sus trabajadores con la subrogación de sus contratos con empresas de Sara Lee a sus nuevos propietarios. En el pasado, la multinacional norteamericana ha sido propietaria de la empresa Argal en el sector de las carnes, y de las marcas Abanderado, Ocean y Princesa en el sector textil. Sara Lee tiene ya cerrada, además, la venta de marcas como Sanex o Ambipur en los sectores de la higiene personal y perfume de hogar, y busca un comprador para los productos de Cruz Verde Legrain como Bloom o Cucal, así como para otras marcas como Kiwi o Williams. La multinacional acaba de hacer un ajuste en Bimbo con la venta de cinco plantas, según ha dicho, "para asegurar su futuro", y no hay noticias, pero sí incertidumbre, dentro del grupo de alimentación en la división de tés, cafés e infusiones, con las marcas Marcilla y Hornimans. Ante este proceso de desmantelamiento, con despidos y transferencia de trabajadores a las nuevas firmas, los sindicatos reclaman a la multinacional una postura de ética empresarial y de responsabilidad social y, sobre todo, solicitan que se abran unas negociaciones transparentes sobre su futuro. Sara Lee inició sus actividades en España en los años setenta en conexión con empresarios en el sector del café. Estos contactos acabaron con la compra en 1983 de Cafés Marcilla . A esta operación siguió la adquisición de la empresa Cruz Verde, y en 1985, de la firma Legrain en los sectores de productos del hogar y cuidado personal. En 1990 se hizo con la empresa textil Sans, adquirida a la familia de igual nombre, y en 1993 se hizo, por un montante de 12 millones de euros, con Hesperia Alimentación, firma integrada en la división alimentaria de British Petroleun y que cambió posteriormente su denominación por Argal. Con esta operación, en medios del sector de la carne se consideraba que la pretensión del grupo multinacional era la construcción de una gran empresa alimentaria en España, y más concretamente en la industria cárnica. La posibilidad de una ofensiva en el sector de estos productos con la compra de otras empresas españolas fue el detonante de una serie de operaciones de la competencia, como fue la compra de Navidul y Oscar Mayer por

200 Campofrío en 2000, con el objetivo de cerrar el paso a Sara Lee en una hipotética carrera hacia el liderazgo en España. Pero los resultados de Argal no acompañaron sus expectativas y en 2001 la multinacional decidió abandonar el negocio de las carnes tras acumular en los años precedentes más de 18 millones de euros de pérdidas, asumir en su salida créditos con entidades financieras por unos 70 millones de euros y dejar el grupo limpio de agujeros. Los gestores del grupo accedieron a su propiedad a través de diferentes líneas de créditos y en dos años lograron poner la firma en beneficios tras abordar un proceso de reorganización interna y un plan de reducción de costes. Fue la desinversión más importante del grupo y la más costosa. La nueva oleada de operaciones de abandono se inició en 2009 y se mantiene abierta en la actualidad. A diferencia de lo acaecido con Argal, las desinversiones se enmarcan ahora en una estrategia de ventas por divisiones de negocio que la multinacional tenía en España y en otros países comunitarios. En esta línea se enmarca la venta de la división de textil en España, la firma Sans, que estaba en manos de un fondo de inversión. La desinversión en textil no se produjo sólo en España, sino que se repitió en otros países comunitarios como Francia, Italia y Reino Unido. Supuso el cierre de dos plantas y el despido de más de 100 trabajadores. La empresa justificó el cierre ante la posibilidad de producir a costes más bajos en países asiáticos. En este momento, la operación de venta más importante, y que prácticamente está ya cerrada, es la de la división de Household & Body Care, especializada en la fabricación de productos para el hogar y el cuidado personal. La venta de esta división se ha llevado a cabo también para el conjunto de las actividades del grupo en la Unión Europea. Por ella Unilever ha pagado a Sara Lee 1.275 millones de euros. En el caso de España, la operación supone para Unilever la adquisición de marcas como Sanex, propietaria a su vez de otras marcas como Axe o Rexona. El contrato de venta supuso el traspaso de una parte de los trabajadores, de los que 95 corresponden a la división en España. A su vez, otras marcas de la multinacional norteamericana como Ambipur pasarían al grupo Procter & Gamble, propietario también de otras marcas como Ariel, Pantene o Fairy. Dentro de esta operación, Procter & Gamble se hace también con la planta de Sara Lee en Santiga (Barcelona). La estrategia de desinversión puede afectar a otras marcas significativas como Cucal y Bloom, pertenecientes a la empresa Cruz Verde, así como Kiwi para la limpieza en el calzado y Williams para el aseo personal. La actividad total del grupo Sara Lee en España supone unas ventas de unos 800 millones de euros. De esa cifra, más de la mitad corresponde a Bimbo. Bimbo se queda La estrategia de la desinversión en estos sectores en la Unión Europea, según la presidenta y directora ejecutiva de la multinacional, Brenda C. Barnes, responde a la decisión del grupo de centrarse fundamentalmente en el negocio de la alimentación y bebidas, donde considera que tiene una mayor posibilidad de lograr una posición más competitiva. En esta estrategia se hallaría el mantenimiento en el grupo de Cafés Marcilla y Bimbo. Cafés Marcilla está integrada en la división de Sara Lee Southern Europe, que opera en los sectores del café, infusiones y edulcorantes bajo marcas como Marcilla, Natrena, Hornimans o Senseo. En el seno de Sara Lee Bakery, donde se agrupan las actividades de pan y bollería, se halla el grupo Bimbo, adquirido indirectamente por Sara Lee en 2001 tras la compra en EE UU de la firma Earthgrains, propietaria de la empresa española. Bimbo ha procedido en el último año a

201 la venta de cinco de sus 10 plantas al grupo Siro "para ajustar plantillas y capacidad de producción a las necesidades de su mercado". Un segundo objetivo de la firma norteamericana con la venta de empresas y marcas ha sido hacer caja y lograr así el reforzamiento de su posición financiera con la recompra de acciones y para poder mantener un elevado dividendo para los socios. - http://www.elpais.com/articulo/empresas/sectores/Sara/Lee/bate/retirada/elpepueconeg/ 20100404elpnegemp_2/Tes

202 REPORTAJE: MI CASA YA NO ES MÍA Candidatos al desahucio Se hipotecaron cuando la economía iba bien y el sueño de ser propietarios parecía al alcance de la mano. Cientos de miles de personas se ven ahora abocadas a la calle al no poder hacer frente a los pagos. ¿Les cegó el espejismo del dinero barato o son víctimas del sistema? JOSÉ LUIS BARBERÍA 04/04/2010 Al matrimonio Díaz-Gálvez, padres de dos hijos pequeños en Sabadell, la aurora les encuentra con las manos enrojecidas de tanto retorcérselas y sin haber pegado ojo. "Te levantas preguntándote: ¿será hoy? Y te acuestas temiendo que sea la última noche que pasas en tu casa. El timbre de la puerta, el teléfono, todo te estremece; vives con el miedo en el cuerpo esperando que vengan a ejecutar la orden". Amenazadas por los embargos o perseguidas por las órdenes de desahucio, decenas de miles de familias andan con el alma en vilo, pendientes de la fecha fatídica en que deberán abandonar las casas que creyeron suyas, viviendas hipotecadas y, ahora, perdidas en el despeñadero social de la crisis. Las estadísticas son tan terribles que, aplicadas al muestrario de testimonios recogidos en este reportaje, adquieren la magnitud de una catástrofe colectiva. Y eso que estas voces castigadas por el sufrimiento y la derrotatratan de controlar sus emociones y no carecen de entereza. Según el Consejo General del Poder Judicial, las ejecuciones hipotecarias, que en 2008 sumaron 58.000, y en 2009, 114.000, superarán este año las 180.000. Eso significa que en estos tres últimos años 350.000 propietarios, familias en su gran mayoría, han perdido o van a perder sus casas y que cada día que pasa medio millar más se queda sin vivienda. Súmense a estos insolventes los casos de familiares y amigos que avalaron los créditos, y que ahora corren el riesgo de que les embarguen sus propias casas, y se entenderá por qué parte de la sociedad española siente que el suelo tiembla bajo sus pies, teme precipitarse al vacío de la miseria y la exclusión. Discretamente, casi sin ruido, en España se está produciendo un fenómeno masivo de migraciones domésticas encaminadas a la agrupación, la concentración y el hacinamiento. Son familias que, ante la imposibilidad de pagar la hipoteca (y en otros casos el alquiler), se mudan a viviendas de habitaciones subarrendadas con derecho a cocina y baño; personas solas que ponen su piso en alquiler y regresan a casa de los padres o comparten piso con otros familiares o amigos; gentes que no encuentran más refugio que los pisos patera y las pensiones sórdidas de camas calientes de dos y hasta tres turnos. Es la franja social machacada por el mazo de la crisis, los ahorcados por las hipotecas, los defenestrados de la "fiesta del ladrillo". Todos ellos llevan grabada en la mente e impresa dolorosamente en el alma una fecha fatídica. La fecha que martilleaba incesantemente a Esther, de 42 años, y a su marido, de 52, era el 31 del pasado mes de marzo. Ese día, los Mossos d'Esquadra se presentaron en su piso para deshauciarles. Tendrán que cobijarse provisionalmente, cada uno por su lado, en casa de sus respectivos padres. Su primera separación tras 6 años de casados y 10 de convivencia, porque ni los padres de él ni los de ella están dispuestos a acogerles a los dos. "Es increíble que no se pueda detener el proceso de desahucio, cuando acabo de ganar las oposiciones a auxiliar administrativo de la Generalitat y dentro de unos meses, una vez adjudicada la plaza, podría intentar hacer frente a los pagos. Somos los nuevos pobres, gente a la que nos da un enorme apuro y vergüenza reconocer que estamos viviendo a un paso de la miseria", afirma, exasperada, impotente, al borde del llanto. La pareja vive con los 426 euros del subsidio que le corresponde al marido por parado de larga duración y mayor de 52 años. No tienen hijos.

203 "Casi me alegro, dada nuestra situación. Quiero vivir, pero tengo miedo hasta de mis propios pensamientos porque lo damos todo por perdido", dice. En el incierto compás de espera que mantiene atrapadas a tantas familias, la angustia socava posiciones que se creían consolidadas, arrasa horizontes de ilusión y esperanza. ¿El surgimiento, en tan poco tiempo, de este ejército de desahuciados no nos interpela ahora, dramáticamente, sobre la política de vivienda seguida en los últimos lustros en el país del millón y medio de casas vacías y precios prohibitivos de los pisos? El 84% de las viviendas españolas se encuentra en régimen de propiedad, frente al 61% de la media europea. Es un hecho demostrado que lo último que la gente deja de pagar es la cuota del piso y también que la economía sumergida se está nutriendo de insolventes hipotecados que trabajan en negro para evitar que les intervengan las nóminas en un procedimiento de ese tipo. La cadena iniciada con la pérdida del puesto de trabajo -en muchos casos, la entrada en el paro de uno de los miembros de la pareja ya sitúa a la familia ante el umbral de la pobreza- desemboca con frecuencia en situaciones muy comprometidas una vez agotado el subsidio de desempleo. Son las últimas mallas del sistema, conformadas por las rentas mínimas de inserción y por las ayudas y subvenciones administrativas dirigidas a combatir el desahucio de las rentas más bajas, lo que está impidiendo un desplome mayor en la miseria. El caso de la familia catalana Barroso-Lavadesa es un exponente del encadenamiento desgraciado de sobreendeudamiento, paro, impago de hipoteca, pobreza y vulnerabilidad. Alonso (36 años) y Eva (32) pusieron en alquiler su piso de Badalona en agosto pasado y con sus tres hijos pequeños se fueron a vivir a casa de su madre, una vivienda de alquiler en Santa Coloma de Gramanet en la que han recalado también un hermano despedido del ferrocarril con su familia y una hermana en situación similar. La entrevista tiene lugar en la terraza de la casa, pequeña, de una planta, abigarrada de colchones y todo tipo de enseres. Lo que el periodista encuentra es una estampa familiar descorazonadora de rostros sombríos, expresión deprimida y ojos enrojecidos por las lágrimas que asoman por turnos en cada intervención. Debe de ser duro reconocerse en la cruda situación que describen tus propias palabras pronunciadas en voz alta y mucho más oírle contar a la madre que ha intentado suicidarse tres veces porque, después de haber trabajado toda la vida, está enferma y no quiere ser una carga para sus hijos en esta situación tan difícil. "Cuando me quedé sin empleo en la obra, pusimos el piso en alquiler para poder pagar la hipoteca de 1.400 euros, pero el problema", explica Alonso, "es que la inquilina se ha quedado ahora sin trabajo y no me paga los 600 euros de la renta, aunque sabemos que realquila las habitaciones a 400". Alonso Barroso tiene también otro problema añadido: se cayó del tejado cuando trataba de reparar la antena de su casa -"no podía pagar un antenista"- y lleva meses sin poder andar. Para colmo de males, Eva, su mujer, perdió su trabajo como vigilante de seguridad cuando tuvo que ocuparse de su marido y de los tres niños. Aunque el conjunto de la familia reúne en subsidios, ayudas y subvenciones una cifra nada despreciable: 600 euros de la pensión de invalidez de Alonso, 700 del paro de Eva, 400 de subsidio del cuñado y 480 de la pensión de invalidez de la madre, María del Carmen, que padece del corazón entre otras afecciones, los Barroso-Lavadesa no consiguen llegar a final de mes. "Hemos vendido todo lo que podíamos vender: las joyas, un coche, el vídeo, el aparato de música, pero no nos llega porque con eso tenemos que pagar los 1.400 de hipoteca, los 585 del alquiler de esta casa, los 350 euros de la letra de una furgoneta que no vendemos porque nos ofrecen menos de lo que nos queda por pagar. Sume usted a eso la luz, gas, agua, comida, ropa y calzado para los niños, pañales, papillas, leche, y comprobará que el dinero no alcanza", explica Eva. No alcanza hasta el punto de que han necesitado la ayuda de Cáritas para cubrir el alquiler de los últimos meses de esa casa comunitaria convertida en el último

204 refugio, la tabla salvavidas de los Barroso-Lavadesa. La madre, María del Carmen, cuenta que, aunque es la primera vez en 10 años que no cumple a tiempo, la casera ya le ha comunicado que su marido se está poniendo nervioso por el retraso en los pagos. -¿Y por qué no venden el piso de Badalona? "Es lo que me dicen en el banco, pero es que nos costó 40 (millones de pesetas) y si lo vendo ahora, nos dan 20. Es todo lo que tenemos, aunque el del banco ya me ha dicho que en realidad lo único mío de la casa serían unas cuantas baldosas porque les debemos 347.000 euros del crédito de 360.000 que nos dieron", responde Alonso. "Y no hay día que pase", interviene Eva, "sin que me llamen para amenazarme con que van a ejecutar la hipoteca de la casa de mi padre, que nos avaló el préstamo". Dicen que no sueñan con que les toca la lotería, sólo con tener trabajo y salud, poder ganarse la vida, dormir con la tranquilidad de que a sus hijos no les falta de nada. Tiemblan también por sus avalistas, personas mayores aterradas ante la posibilidad de que puedan perder su piso, el fruto de sus ahorros. Cabe preguntarse si los únicos responsables de esta catástrofe que castiga a las franjas económicamente más débiles de la sociedad son los propios insolventes que, llevados por la ignorancia, la ambición, la ingenuidad, cometieron la osadía de meterse en un piso que no pueden pagar. ¿Ellos solos se lo han buscado o es que ese sueño nacional al que se adhirieron con especial ilusión los inmigrantes, "el sueño español", fue inducido irresponsablemente por la alegría crediticia de estos años atrás, al tiempo que el sobreendeudamiento resultante de la burbuja inmobiliaria, que nadie se atrevió a pinchar, les colocaba inadvertidamente la soga que ha acabado por ahogarles? Es una soga de la que no resulta fácil desprenderse, ya que el embargo de los pisos, que han perdido el valor de años atrás, no colma las reclamaciones bancarias, no libera de la condena de seguir cargando con la losa. "Hemos observado que mujeres que habían encontrado una salida laboral de la prostitución han vuelto a ejercerla porque se les ha taponado esta vía", apuntan, incluso, en el centro de rehabilitación de Las Teresitas, en Madrid. "Trabajaba en una multinacional, pero me quedé con un paro de 600 euros. Me he metido en esto porque no podía pagar las hipotecas y las facturas", afirma una mujer que aparece en los anuncios de contactos, subrayando su condición de española que se estrena en el oficio. "Nos quitaron el piso de Vallecas (Madrid) hace un año, cuando perdí mi trabajo de informático", dice Stalin Pérez, ecuatoriano de origen con más de una década en España. "No pudimos pagar la cuota del crédito hipotecario de 240.000 euros, que subió de golpe de 900 a 1.500 euros, y nos pusieron en la calle con dos niños pequeños. En la subasta, el banco se lo adjudicó en 130.000 porque ahora no hay nadie que puje por un piso en las primeras convocatorias. Después de haberles pagado 27.000 euros del crédito y haberme quedado sin casa, siguen reclamándome una deuda de 140.000, ya que me suman los intereses que han seguido corriendo y las costas del proceso judicial". Stalin y su familia viven ahora de alquiler y él se gana la vida con un pequeño locutorio. "¿Que si estoy bien ahora? Imagínese la felicidad que puedo tener. Estoy incluido en el registro de morosos, Asnef; no tengo derecho a préstamos bancarios ni a tarjetas de crédito; pueden intervenir judicialmente mis ingresos y debo al banco una barbaridad de dinero que no sé cómo voy a pagar y que es una condena de por vida. Ahora mi piso tiene colgado un cartel de Se vende. He llamado y piden por él 190.000". ¿Hacen negocio los bancos con los créditos impagados, como creen muchos de quienes han descubierto que el ideal del piso en propiedad puede trastocarse en maldición? "Lo ultimo que querría tener la banca son inmuebles", indica Encarna Pérez, de la Asociación Española de Banca (AEB). "Le llaman el mal de piedra porque no es su negocio y les obliga a

205 dedicarle muchos recursos y a recortar los resultados. Por cada piso que se queda, la banca tiene que hacer una provisión de fondos por el 10% del valor de tasación, que se convierte en el 20% al año siguiente, además de pagar las cuotas de la comunidad de vecinos, arreglar los desperfectos... En realidad, tratan de quitarse los inmuebles de encima como pueden, incluso refinanciando créditos y dando facilidades a sus clientes", subraya. El campo en ruinas de los damnificados está abonado con créditos hipotecarios concedidos por el 100% y hasta el 120% del precio del piso a personas de salarios modestos y situación laboral poco estable que ahora cargan con su error. A estas alturas, parece evidente que parte de las entidades de crédito incurrió en comportamientos excesivamente laxos, poco rigurosos. "Fueron años de gran expansión, con tasa de desempleo y tipos de interés bajos, en los que el mercado tiraba para adelante, pero en España no han existido como producto las hipotecas subprime ni las ninja (concedidas a personas sin ingresos fijos, sin empleo fijo, sin propiedades)", explica Encarna Pérez. A Berta Delicia, una mujer ecuatoriana de 60 años sin patrimonio ni más ingresos que los 700 euros mensuales que gana limpiando portales, y a su entonces marido, trabajador no cualificado, la banca les dio un crédito de 240.000 euros. Como no podía pagar, menos todavía tras el divorcio, Berta recurrió a las financieras y terminó hundiéndose más y más en un pantano de deudas. Fue la intervención judicial precisamente y la actitud de los acreedores que aceptaron el piso en dación (entrega del piso a cambio de anular la deuda hipotecaria pendiente) la que le sacó del atolladero cuando estaba a punto de perder la salud. "Acabo de regresar de la región rumana de Alexandria y he vuelto impresionado por la cantidad de villas y mansiones de dudoso gusto levantadas con créditos de bancos españoles y que ahora están paralizadas, a medio construir, porque, por lo visto, ya no llegan de España las remesas de los inmigrantes", comenta el director y productor de cine Julio Soto. Según el Banco de España, el crédito hipotecario considerado moroso o dudoso (tres meses consecutivos de impago), que no cesa de aumentar, alcanzó en septiembre último los 18.209 millones de euros de un volumen total de 609.395 millones. Subsumida en el montante general, la cifra no parece tan enorme, pero es ahí donde se concentra el drama de esas 350.000 familias. En las conversaciones con los "ahorcados por la hipoteca", título que da nombre a una de las asociaciones de afectados, circula la idea, lacerante como un puñal, de que todo el mundo (bancos, inmobiliarias, tasadores, notarios...) ha ganado a su costa. "Todos ganaban con nuestra desgracia", dirán en Madrid o Barcelona Estefanía Portaña, Segundo Zapata, Erick Jativa... ¿Estamos ante un equívoco inducido por el mercado o ante un ejercicio de ingenuidad por parte de gentes ambiciosas e incautas que pensaron que tener una vivienda en propiedad en España estaba al alcance de todo el mundo? La inmensa mayoría de esta legión de perdedores carece, desde luego, del conocimiento, experiencia y los reflejos mostrados por el presidente de la CEOE, Gerardo Díaz Ferrán, cuando, a propósito de los vuelos suspendidos por su compañía aérea Air Comet y de los miles de viajeros perjudicados, dijo aquello de que él "nunca habría elegido Air Comet para volar a ningún sitio". Ada Colau, abogada de la Plataforma de Afectados por la Hipoteca en Cataluña, que reclama la dación, sostiene que la combinación fatal de boom inmobiliario, sobreendeudamiento e insolvencia familiar fue favorecida por la concesión casi indiscriminada de créditos hipotecarios y por la ausencia de controles públicos y políticas dirigidas a garantizar un alquiler accesible y estable. Pocas voces cualificadas salieron entonces a denunciar los excesos, y las que lo hicieron quedaron ahogadas en la alegre cacofonía general del "corre ahora lo que puedas y no pienses en mañana". Ocurrió, incluso, pese a la crítica a los

206 préstamos hipotecarios a 40 y 50 años que el entonces ministro de Economía Pedro Solbes vertió en la Universidad Menéndez Pelayo, de Santander. Sus palabras fueron contestadas y cayeron en saco roto. "Tengo 49 años y una hipoteca a 40 años que vencerá cuando, seguramente, yo ya estaré muerta", comenta Edurne, educadora social en Girona. "Firmé la hipoteca hace cuatro años, a medias con mi compañero, pero me la quedé al completo cuando él se marchó, y aunque hasta ahora he pagado los ochocientos y pico mensuales, ya no puedo más. Llevo dos años intentando vender la casa, y ahora lo que quiero es que el banco se quede con ella a cambio de liquidarme la deuda: 140.000 euros de un crédito total de 145.000", dice. Edurne no lo tendrá fácil porque los bancos acreedores sólo aceptan la dación muy excepcionalmente y en casos de insolvencia manifiesta. "Después de tantas angustias, he decidido que se acabó el miedo, que hagan conmigo lo que quieran, no voy a seguir viviendo en la miseria para poder pagarles". "Tenemos que salir a manifestarnos a la calle con nuestros hijos", lanza Segundo Zapata, ecuatoriano con una fecha de desahucio del pasado día 11. El techo se le ha caído encima a Ailín García, de 29 años, divorciada, madre de tres hijos, el último de los cuales acaba de nacer con insuficiencia respiratoria. Ha perdido la casa de renta antigua por la que pagaba 380 euros al mes en Barcelona porque su ex marido no le avisó de que había dejado de abonar el alquiler. Está aterrada, más que desesperada. "Cuando me enteré, intenté subrogar el alquiler a mi nombre y pagar los meses atrasados, pero la casera no me dejó. Supongo que prefiere contratos a precios actualizados". Dice que el juicio y la sentencia han sido rapidísimos y que en la vista ni ella ni su abogada pudieron prácticamente abrir la boca. Ailín ha experimentado la celeridad del procedimiento establecido en la Ley de Alquiler, conocida por los damnificados como "desahucio exprés", que facilita y agiliza el proceso de desalojo en caso de impago. Concebida con el propósito de ampliar el raquítico mercado de alquiler en nuestro país -uno de los puntos débiles del problema-, la ley parece estar dando sus resultados: los hogares en alquiler pasaron de ser el 11% al 13% en 2008, y el precio del alquiler no ha subido prácticamente en los últimos meses, según el Instituto Nacional de Estadística, aunque sacrifica por igual al insolvente honesto y al aprovechado. El desahucio de Ailín García lleva la fecha del 15 de abril, y ella dice que no tiene alternativa, que sus ingresos -los 600 euros que le pasa su marido por el cuidado de los hijos y los 410 del PIRMI, la ayuda de la Generalitat- no le permiten pagar un alquiler a precios de mercado. "Trabajaba en una frutería y decidí ponerme por mi cuenta, pero fue un negocio desastroso y ya no tengo nada. De la noche a la mañana me veo debajo del puente con un recién nacido y dos niñas de ocho y cinco años a las que hasta ahora no les ha faltado de nada. La alternativa es que los cuatro nos metamos de realquilados en una habitación o me vuelva a Cuba como me dice la asistente social. ¿A Cuba?, pero si yo salí de allí a los 18 años y España es ya mi país", dice, envuelta en lágrimas. Sin red familiar y con menos recursos, parece claro que el mal de piedra está castigando proporcionalmente más a los inmigrantes. "Calculo que el 60% de los casos que veo en mi juzgado corresponden a inmigrantes", apunta el juez instructor de uno de los juzgados madrileños que ejecutan las hipotecas impagadas. Según su experiencia, en buena parte de los casos los bancos se quedan con los inmuebles por el 50% del valor de tasación. Dice que el procedimiento judicial es una apisonadora que apenas contempla la pregunta retórica de si el ejecutable ha pagado o no. Ante esa apisonadora trituradora de ambiciones, sueños e ilusiones desfilan a diario, perdedores con fecha de desahucio y futuro sombrío. http://www.elpais.com/articulo/reportajes/Candidatos/desahucio/elpepueco/20100404elpdmgrep_1/Tes

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TRIBUNA: NICOLAS BERGGRUEN / NATHAN GARDELS Las líneas de falla de la democracia NICOLAS BERGGRUEN / NATHAN GARDELS 04/04/2010 La interdependencia es el motor de la convergencia tectónica entre Oriente y Occidente

China está quizá más abierta a reformas políticas de base que EE UU China inventó la primera imprenta en 598 y publicó el primer periódico impreso en plancha xilográfica, Kaiyuan Za Bao, en 713 en Pekín. Sin embargo, en 2010, quiere poner obstáculos a la innovación en tecnología de la información que encabeza Google. Para evitar la censura, Google ha trasladado su motor de búsqueda a Hong Kong y es posible que se vaya por completo de China después de que unos piratas, ocultos en las profundidades de la burocracia comunista -a fin de que ésta pueda afirmar que no sabe nada del asunto-, violaran los sistemas patentados de la compañía y localizaran las comunicaciones por correo electrónico entre disidentes chinos con el propósito de seguir la pista a sus redes sociales. No hay duda de que está fraguándose un choque entre la ruidosa batalla campal de Internet y la tradicional tendencia confuciana de China al orden, el respeto a la autoridad y una idea conformista de la armonía social. Mientras intentan buscar el equilibrio en una relación en la que China sigue dependiendo en gran medida de que Estados Unidos consuma sus exportaciones y Estados Unidos sigue dependiendo en gran parte de que China compre deuda del Tesoro estadounidense, estos dos socios tan estrechamente enlazados en época de prosperidad no tienen más remedio que intensificar sus intercambios en los próximos años. Cuando, inevitablemente, las placas de la geocivilización choquen una contra otra y generen temblores, ¿será posible que se produzca el equivalente cultural a una subducción? ¿Será posible que, por ejemplo, se extienda hacia Oriente un mayor aprecio a la libertad de expresión y hacia Occidente un mayor aprecio a la idea de gobernar teniendo en cuenta el interés común y la perspectiva a largo plazo? Por supuesto, hay mucha historia cultural por detrás de la interdependencia actual que contribuye a la velocidad de convergencia tectónica. El antiguo periodo chino de los "Reinos combatientes" acabó con un compromiso de lograr la integridad y la estabilidad territorial que, a su vez, derivó en la atención moderna al control político y la armonía social. El camino hacia la paz tras las guerras de religión en Occidente desembocó en los ideales opuestos: tolerancia y diversidad. En la tradición de Confucio, China se ha apoyado en la ética - incluidas las obligaciones del gobernante hacia los gobernados- y la educación para que sus instituciones fueran siempre sensibles, justas y honradas. Occidente se ha basado en los controles que proporciona la democracia. No obstante, como propone el filósofo político Daniel A. Bell, es posible ver ciertos puntos comunes en las líneas de falla. Aunque a los occidentales nos pueda parecer ilógico, China está quizá más abierta a reformas políticas fundamentalesque Estados Unidos. Dado que, en este país, el imperio de la ley se basa en la idea de que el Estado está limitado por una serie de leyes preexistentes que son soberanas, cualquier sugerencia de modificar la Constitución es anatema.

208 En China, por el contrario, algunos intelectuales destacan que, según la teoría del Partido Comunista, el sistema actual es la "fase primaria del socialismo", es decir, que es una etapa de transición hacia una forma superior de socialismo. Cuando se extienda la prosperidad, la base económica cambiará, por lo que la superestructura legal y política también debe cambiar. Eso ha hecho que algunos estudiosos confucianos contemporáneos aleguen que las nuevas instituciones para la etapa superior de desarrollo deberán diseñarse a partir de las fuentes de legitimidad propias de la experiencia china: el conocimiento meritocrático de la clase dirigente, el pueblo y la tradición. Bell, que es profesor en la Universidad Tsinghua de Pekín, ha llevado estas ideas más allá. Propone una cámara alta meritocrática cuyos miembros sean escogidos no mediante una elección sino mediante un examen, una asamblea democrática nacional, electa, que asesore a la cámara alta sobre sus "preferencias", elecciones directas hasta las instancias provinciales y libertad de prensa. El "líder simbólico del Estado" saldría elegido entre los miembros más notables de la cámara meritocrática. Esta formulación y otras similares -sobre las que está en marcha un rico debate hoy en toda China- se atienen a la idea confuciana del Gobierno meritocrático mitigado por la responsabilidad ante el pueblo, pero no totalmente dominado por ella. Da la impresión de que es precisamente el tipo de modernización política, nada occidental, que vamos a ver en China a medida que adopte su propia forma de democracia. China necesita a toda costa un sistema de responsabilidad de ese tipo para acabar con la arbitrariedad, la corrupción y el amiguismo que han acompañado a la primera etapa del socialismo. Pero además, parece que la estrategia propuesta por Bell tendría más probabilidades de mantener la estabilidad que la democracia parlamentaria occidental, por lo que sería un cambio de rumbo aceptable para China. Lo paradójico es que, mientras los intelectuales chinos tratan de ampliar la responsabilidad democrática a medida que los pobres adquieren más educación y prosperidad, Estados Unidos tiene el problema contrario: la excesiva atención a lo inmediato por parte de los ciudadanos de las prósperas democracias de consumo perjudica la sostenibilidad a largo plazo. Por consiguiente, si la innovación institucional en China podría tener como centro una cámara legislativa elegida y verdaderamente dotada de poder, aunque vigilada, a Estados Unidos le vendría bien una deliberación a largo plazo como la que ofrecen órganos del tipo de una cámara alta meritocrática y una entidad con la responsabilidad de asegurar la continuidad de Gobierno, que constituye un símbolo unificador en una sociedad cada vez más variada. Durante la primera corriente de globalización, a principios del siglo XX, Sun Yat Sen intentó fundir las instituciones de la democracia occidental con la meritocracia confuciana. Tal vez hoy, cuando el "ascenso de los demás" está desafiando el dominio de Occidente, la imaginación política pueda abrirse otra vez a ideas nuevas. En esta ocasión no se tratará sólo de que las ideas occidentales vayan hacia Oriente, sino también de que las ideas orientales vayan hacia Occidente. Traducción de María Luisa Rodríguez Tapia http://www.elpais.com/articulo/opinion/lineas/falla/democracia/elpepuopi/20100404elpepiopi _4/Tes

209 Los desequilibrios europeos Alemania aprieta a la zona euro El gigante europeo impone austeridad, pero depende del consumo de sus socios El FMI, la OCDE y la UE piden a Merkel que reduzca su superávit comercial El crecimiento alemán hasta 2007 se cimentó en los flujos exteriores Los países que han mantenido a flote a Berlín están ahora muy endeudados

Alemania recela de la idea de crear un gobierno económico europeo ANDREU MISSÉ - Bruselas - 04/04/2010

De izquierda a derecha, los mandatarios de Reino Unido (Gordon Brown), Alemania (Angela Merkel), Francia (Nicolas Sarkozy) e Italia (Silvio Berlusconi), en febrero de 2009. / reuters La inflexibilidad que ha exhibido Alemania en la gestión de la crisis griega ha acabado revolviéndose contra sí misma. El desequilibrio fiscal de Grecia, mal que bien resuelto, ha eclipsado otro desequilibrio que emerge cada día con más fuerza: el desafío que supone el mantenimiento del fuerte superávit exterior de Alemania a costa de sus socios de la zona euro. La inflexibilidad que ha exhibido Alemania en la gestión de la crisis griega ha acabado revolviéndose contra sí misma. El desequilibrio fiscal de Grecia, mal que bien resuelto, ha eclipsado otro desequilibrio que emerge cada día con más fuerza: el desafío que supone el mantenimiento del fuerte superávit exterior de Alemania a costa de sus socios de la zona euro. El motor económico europeo predica austeridad al resto, pero basa su éxito en el consumo de otros países, que lo convierten en un gigante exportador. Numerosos analistas consideran insostenibles estos desfases -Alemania vende al exterior mucho más de lo que compra porque su consumo interno es débil-, que impiden reactivar el crecimiento de la economía y del empleo. Las principales instituciones, desde el Fondo Monetario Internacional (FMI), la Organización para la Cooperación y el Desarrollo Económico (OCDE) o la Comisión Europea, piden a Alemania que corrija su desequilibrio exterior pero la canciller Angela Merkel se resiste. El modelo de moderación salarial y bajo

210 consumo en su país, compensado por el mayor gasto de sus socios, ya no puede seguir. La crisis ha sobreendeudado a muchos países rebajando seriamente su capacidad de compra. La crisis de las llamadas "divergencias de competitividad y los desequilibrios macroeconómicos" adquirió una nueva dimensión el pasado 15 de marzo con las manifestaciones de la ministra francesa de Finanzas, Christine Lagarde, al diario Financial Times, cuando reconoció que Alemania había hecho "una labor increíble" en la moderación de los costes laborales unitarios. Pero al mismo tiempo advertía: "No estoy segura de que esto sea un modelo viable a largo plazo". Lo cierto es que el superávit alemán por cuenta corriente es impresionante. En 2009 ascendió a 125.150 millones de euros, el 5% del producto interior bruto (PIB). En términos absolutos es el segundo más grande del mundo después de China, pero en términos relativos, es decir, en relación con su PIB, es incluso mayor que el de ese país. Philipe Whyte, investigador superior del Centre for European Reform (CER), señala que durante la última década Alemania y otros países registraron un fuerte excedente exterior, pero que sufrieron al mismo tiempo una débil demanda interna. En su opinión, si Alemania "hubiera sido una economía cerrada habría tenido una prolongada depresión". Whyte sostiene que "Alemania ha sido salvada por el derroche de los extranjeros" y recuerda que entre 1999 y 2007, el 70% del crecimiento de su PIB fue debido a las exportaciones netas. Pero advierte de que "los extranjeros que le han mantenido a flote están ahora atascados por la deuda". Whyte desmonta uno de los tópicos más extendidos al rechazar la idea de que "los superávit por cuenta corriente son un reflejo de la competitividad de una economía". En su opinión, el error está en considerar los países como si fueran empresas. Recuerda que "una de las economías más productivas del mundo, Estados Unidos, registra un gran déficit externo mientras que algunas de las más disfuncionales y menos productivas, como Rusia y la República Democrática del Congo, tienen superávit". Este economista, experto en política monetaria y fiscal, censura la estrategia de Berlín, que urge a que "los países del déficit se conviertan en más alemanes". Pero avisa de que "ésta es una misión imposible si Alemania no deja de ser tan alemana". La cuestión está en cómo estimular la demanda interna en el país que debería ser la locomotora de la Unión. "Lo que más me preocupa", asegura Whyte, "es la extendida tendencia en Alemania a creer que los políticos no pueden hacer nada por esto". Simon Tilford, economista jefe del CER, advierte de que "si el modelo de crecimiento alemán fuera exportado al conjunto de la zona euro (o al resto del mundo), el resultado sería empobrecer a tu vecino con recortes salariales y una depresión mundial". Precisamente sobre esta idea el profesor Costas Lapavitsas, del Research on Money and Finance (RMF), censura el deficiente funcionamiento de la unión monetaria. Su tesis es que "la unión monetaria ha eliminado o limitado la libertad de establecer la política fiscal o monetaria forzando que la presión del ajuste se haya realizado sobre el mercado de trabajo". En su opinión, los países de la eurozona, dirigidos por la política de la UE, "han comenzado una carrera cuesta abajo fomentando la flexibilidad laboral, la contención salarial y el empleo a tiempo parcial". Lapavitsas ilustra con numerosos datos que Alemania sólo ha ganado competitividad dentro de la zona euro "por la única razón de que ha sido capaz de apretar a sus trabajadores más duramente". Su idea esencial es "que la eurozona debería transformar el euro para servir a los intereses de la clase trabajadora a través de la política fiscal, una ampliación del presupuesto y salarios mínimos. Queda por ver si esto es factible. Es posible que, en la práctica, la eurozona se rompa y los países periféricos sigan caminos separados".

211 Este experto subraya que "una política de aumento sostenido de los salarios sería buena para Alemania, que ha congelado los salarios nominales durante 15 años". Ello "estimularía la demanda y reduciría su superávit con los países periféricos". Y recuerda que "los salarios reales en España también han sido congelados durante este periodo". Y asegura que España sufrió también una productividad extremadamente baja, por lo que recomienda "un aumento de los salarios reales pero también de la productividad". En este sentido, señala que congelando o bajando los salarios reales durante la última década, España tampoco ha mejorado su competitividad. Una política de austeridad y recortes salariales probablemente exacerbaría la recesión e incluso contribuiría a aumentar el desempleo. Tilford señala que para que la eurozona se mantenga estable, además del rigor en las normas fiscales, son necesarias otras tres cosas: "Los Estados miembros de la UE del sur deben estimular el crecimiento de su productividad; los del norte, especialmente Alemania, deben reforzar su demanda interna y reducir su superávit por cuenta corriente y debería haber una mayor integración institucional". Si las probabilidades de que Alemania modifique su política exportadora son prácticamente nulas, peor es su disposición para impulsar la coordinación económica, con independencia de que se le llame gobierno económico o gobernanza económica. http://pdf.elpais.com/archivo/pdf/20100404elpepi_22_23.pdf

212 Los desequilibrios europeos España pierde competitividad por los precios y los salarios Las exportaciones de servicios comienzan a despegar A. M. - Bruselas - 04/04/2010 El fuerte deterioro de la construcción en España ha agudizado el debate sobre la capacidad de los sectores productivos para competir en el exterior. Durante la última década, la pérdida de competitividad respecto a la zona euro se ha acentuado. El fuerte deterioro de la construcción en España ha agudizado el debate sobre la capacidad de los sectores productivos para competir en el exterior. Durante la última década, la pérdida de competitividad respecto a la zona euro se ha acentuado. Frente a la UE, la pérdida ha oscilado desde un 4,3% si se tienen en cuenta los precios a la exportación a un 12,4% si se toman como referencia los costes laborales. Los expertos coinciden en que España tiene un problema de "altos costes laborales relativos". Sin embargo, el salario real para el trabajador sigue siendo uno de los más bajos de Europa. A pesar de la difícil coyuntura, aparecen signos positivos como la mejora en las exportaciones y la ganancia de cuota de mercado. Si se compara con los países de la OCDE (las 30 economías más desarrolladas), las pérdidas de competitividad son mayores: desde el 7,5% por precios de exportación hasta el 28% por costes laborales unitarios en manufacturas. Un reciente estudio, Dos crisis, dos respuestas, elaborado por los investigadores de Bruegel Benedicta Marzinotto y André Sapir y el director de este centro de estudios, Jean Pisani-Ferri, sostiene que mientras que "España fue fiscalmente virtuosa hasta la crisis, sus problemas son sobre todo de competitividad, originados por el boom del crédito nacional y las consecuencias de la relación entre precios y salarios". Marzinotto considera que "la receta no consiste en una reducción generalizada de los salarios, sino en asegurar que los aumentos de sueldo reflejan ganancias de productividad". En su opinión, ello requiere "un cambio en el proceso de negociación colectiva, actualmente muy centralizada". El problema es que "los salarios se deciden en el sector industrial o en la región y son aplicados a todas las empresas, lo que implica que salarios relativamente altos pueden ser impuestos a empresas con baja productividad", lo que puede crear inflación y deteriorar la competitividad de la economía. Marzinotto sugiere que España podría aplicar algún mecanismo de control salarial similar al que funciona en Bélgica. En 1996, el Parlamento belga aprobó una ley para mantener la evolución de los salarios en línea con sus principales socios comerciales, para preservar la competitividad. Cada dos años, el Consejo Económico Central Belga publica un informe sobre los márgenes de aumento de los salarios nominales según la evolución prevista en Alemania, Francia y Holanda. El dato es considerado "indicativo" por los interlocutores sociales para decidir los aumentos salariales. La economista advierte, no obstante, que dado que su máxima recomendación es descentralizar la negociación colectiva, España necesitaría reforzar un sistema de dos niveles, que tuviera en cuenta la evolución salarial en otros países y la local. La dificultad de España para abordar esa materia es que mientras los costes laborales unitarios han subido más que en Italia o Alemania, pero menos que en Grecia, Portugal e Irlanda, la

213 productividad y el sueldo real del trabajador son más bajos que en esos cinco países, según el estudio de Research Money Finance, un grupo de análisis político y económico. Con independencia del debate salarial, las exportaciones de servicios, más allá del turismo, han iniciado un cierto despegue, hasta representar el 4,6% del PIB. Los avances más notables se han registrado en servicios a las empresas, financieros y de seguros. En exportaciones de bienes, España ha aumentado ligeramente su participación desde su cuota del 1,73% en 2000 hasta el 1,77% en 2009, pese a la entrada de potentes competidores internacionales como China, India y Brasil. En el reparto, Alemania ha seguido ganando mercado (del 8,4% al 9%). Sin embargo, Francia e Italia han perdido terreno y sobre todo Reino Unido, que en la última década ha descendido desde el 4,3% al 2,9%. En el mismo periodo China prácticamente ha doblado su cuota, hasta el 11,9%. A pesar de la drástica reducción experimentada desde el 9,6% en 2008 al 5,1% en 2009, el déficit exterior sigue siendo un problema serio para la economía española. Los analistas consideran relevante distinguir si el endeudamiento exterior se destina a gastos corrientes o inversión. En este sentido, la inversión en España sin tener en cuenta la vivienda, en relación con el PIB, fue superior a la de Alemania, Italia, Grecia, Portugal e Irlanda. http://pdf.elpais.com/archivo/pdf/20100404elpepi_23.pdf

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XAVIER VIDAL-FOLCH Para entender a los alemanes XAVIER VIDAL-FOLCH 01/04/2010 En la crisis griega y del euro, por vez primera Angela Merkel se amparó en su Tribunal Constitucional (con sede en Karlsruhe) para no apoyar una solución comunitaria. Si se quiere, dijo, un Fondo Monetario Europeo (FME), como su ministro de Hacienda Wolfgang Schäuble, antes debe reformarse el Tratado de Lisboa. ¿Llevaba razón? Karlsruhe ha dictado tres sentencias europeas muy nacionalistas en las que se alza a sumo intérprete del derecho europeo en su país, frente al Tribunal de Luxemburgo. En las tres acota la dinámica expansiva del derecho común, busca un papel "esencial" al declinante Estado- nación y enfatiza el control del Parlamento doméstico sobre las normas y actuaciones de la Unión. En la sentencia sobre el Tratado de Maastricht (12-10-1993) los magistrados chapucean, al tratar a la UE ya de "unión de Estados soberanos", ya de "asociación de Estados", "comunidad interestatal", "comunidad de Estados", "confederación" o "federación". Tanta imprecisión para una conclusión, que la UE no es "un único Estado". De ahí se deriva la preocupación porque la soberanía estatal "no se vacíe de contenido" al transferirlo para arriba. De forma que el Tratado no reconoce a Bruselas "una competencia en materia de competencias": la facultad de decidir en qué ámbitos intervendrá y cómo. Y que el principio básico de "subsidiariedad" se destina a "garantizar la identidad nacional de los Estados miembros y a mantener sus competencias", una lectura sesgada pues protege sólo hacia abajo y no, también, hacia arriba. Karslruhe aprobó Maastricht, pero le puso acritud, una enorme cantidad de peros potenciales: pero no lo validaría si desvirtuase la posibilidad de una "democracia viva" en Alemania; pero su desarrollo es función de los Estados y no de la Unión; pero la unión económica, aunque deseable para completar la monetaria, debería pasar de nuevo por las capitales; pero incluso los pasos previstos al milímetro para llegar al euro no son automáticos; pero Alemania siempre puede salirse de la Unión... Lo que quedó de esa sentencia fue una amenaza restrictiva. Que aumentó con la dictada el 31 de marzo de 1998 para enjuiciar el acceso de Alemania a la tercera fase del euro. Su texto apenas le añade el refuerzo del papel de las dos cámaras nacionales ante las decisiones europeas: deben "ser tenidas en cuenta" por el Gobierno federal. La tercera sentencia, sobre el Tratado de Lisboa (30 de junio de 2009), retorna a la defensa del "inviolable núcleo esencial de la identidad" alemana, cuantificable según si conserva o no "un espacio suficiente" para determinar las condiciones de vida de sus ciudadanos. Y mensurable (párrafo 249) a través de si, entre otras, se conserva la competencia sobre un ámbito suficiente de "los ingresos y los gastos, incluyendo el endeudamiento". Todo eso pespuntea una Alemania ensimismada, fatigada de Europa. Pero hay más, y más decisivo para el caso de la crisis de Grecia y del euro. Al hablar de presupuestos, la sentencia (párrafo 256) rechaza una eventual decisión en la que se comunitarice "en lo fundamental la determinación de la clase e importe de los impuestos que afectan a los ciudadanos" y deje a Berlín sin "espacios de discrecionalidad política suficientes con respecto a ingresos y gastos"

215 (275). De manera que, sensu contrario, valida una decisión presupuestaria que no afecte a esos temas. Por ejemplo, la decisión de crear un FME con el presupuesto común. O la de otorgar un préstamo comunitario por 30.000 millones de euros, pues la cuota alemana del mismo serían unos 6.000 millones, que a todas luces no afectan "en lo fundamental" al bolsillo alemán.

El de Merkel era un obstáculo político disfrazado con falsa coartada jurídica. http://www.elpais.com/articulo/economia/entender/alemanes/elpepueco/20100401elpepieco_2 /Tes

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TRIBUNA: TIMOTHY GARTON ASH Se para el motor alemán y Europa se estanca El 80º cumpleaños de Helmut Kohl, el 'canciller de la unidad alemana', es una ocasión para reflexionar sobre los paradójicos resultados de su legado europeo: la unión económica no facilitó la integración política TIMOTHY GARTON ASH 02/04/2010 Este Sábado de Pascua, Helmut Kohl, el canciller de la unidad alemana, cumplirá 80 años. Para conmemorar la ocasión, la canciller Angela Merkel y muchas otras figuras alemanas pronunciarán bellas palabras de homenaje al viejo rey Kohl; pero la estrategia actual de su país respecto a Europa, sobre todo respecto a la atribulada eurozona, corre peligro de desmantelar su legado. Si nos preguntamos por qué hoy está tambaleándose el proyecto europeo, una de las principales razones es que el motor alemán se ha parado. Y si nos preguntamos por qué ha sucedido eso, la respuesta es: porque Alemania se ha convertido en un país "normal", como Francia y Gran Bretaña. Si es que se nos puede considerar normales, claro está. Siguiendo las huellas de su mentor, Konrad Adenauer, Kohl insistió siempre en que la unidad alemana y la unidad europea eran "dos caras de la misma moneda". Una moneda que acabó siendo el euro. Kohl, como la mayoría de sus predecesores, estaba empeñado en la integración europea por dos motivos: porque, debido a su experiencia personal durante la guerra, creía en ella, y porque comprendía que era buena para los intereses nacionales de Alemania. Garantizar a los países vecinos que Alemania había cambiado y estaba completamente dispuesta a integrarse en Europa era la única forma de aspirar a conseguir su objetivo nacional: su reunificación libre y pacífica. Y así fue. Cuando surgió la inesperada oportunidad en 1989, Kohl la aprovechó sin dudarlo un instante; y toda Europa salió beneficiada. No podríamos tener una Europa libre y completa sin una Alemania libre y completa en su centro. Por eso he colgado un mensaje de felicitación de cumpleaños en una página web creada con ese fin por el partido -a veces agradecido y a veces no- de Kohl (http://www.helmut- kohl.cdu.de/). Independientemente de que Kohl haya sido un gran hombre o no, sí hizo una gran obra, y la historia le recordará por ella. Entre los demás personajes que figuran como autores de felicitaciones en esa página web está Konrad Adenauer. Llama un poco la atención, salvo para quienes crean en el espiritismo, puesto que Adenauer murió en 1967; pero supongo que es uno de los nietos del gran canciller, que también se llama Konrad y es notario en Colonia. Una de las consecuencias más trascendentales de la política de dos vías de Kohl fue que Alemania renunció a su amado marco por el euro. Tal vez ése era el objetivo de Kohl en cualquier caso, pero, al examinar con detalle los documentos históricos relacionados con la unificación alemana, queda claro que se comprometió explícitamente a ello para vencer la hostilidad de Mitterrand a la unificación. "La mitad de Alemania para contentar a Kohl, el marco para contentar a Mitterrand", era una frase ingeniosa que corría en aquel tiempo. Después, Kohl utilizó la inmensa autoridad de la que disfrutaba en su país para impulsar el euro pese a la resistencia o la falta de entusiasmo de la mayoría de sus compatriotas.

217 Muchos economistas advirtieron que no era posible tener una unión monetaria duradera sin una política fiscal única o al menos más coordinada, que impusiera la misma disciplina a todos los Estados miembros, además de la posibilidad de hacer transferencias importantes a las zonas de la unión que estuvieran pasándolo peor. Es algo que nunca se hizo, aunque Kohl confiaba en lograrlo. Igual que en las etapas anteriores de la Unión Europea, se suponía que la integración económica debía servir de catalizador para la integración política. La eurozona iba a ser el centro magnético de la unificación política. Sin embargo, en lo que se convirtió fue en un gran mercado para las exportaciones alemanas. Así que, en un magnífico ejemplo de la ley de las consecuencias imprevistas, aunque no hubo los beneficios políticos que se esperaban, sí unos beneficios económicos que no se esperaban tanto. Pero los fallos fundamentales del diseño de la unión monetaria europea no desaparecieron. Y este año han vuelto a aparecer, en forma de némesis griega. Si fuera canciller hoy, Kohl seguramente habría reaccionado yendo un poco más allá: poniendo la política de la unidad europea a largo plazo por encima del coste inmediato, pero también avanzando hacia una unión fiscal -y, por extensión, política- más fuerte. Lo que ocurre es que, mientras tanto, Alemania ha cambiado. Antes de la unificación, era un país que quería ser supereuropeo, por razones de memoria personal, idealismo y un sentido de la responsabilidad histórica, pero también necesitaba serlo por su propio interés nacional. Después de la unificación, cuando se transformó en un país, por fin, plenamente independiente y soberano, esa necesidad se desvaneció. A partir de ese momento, todo pasó a depender del puro deseo, de la voluntad. Los estudiosos de Alemania observaron con interés para descubrir si iba a mantener el excepcional compromiso europeo de la República Federal desde Adenauer hasta Kohl. ¿O acaso se convertiría en una Nación-Estado más "normal", como Francia y Gran Bretaña, pendiente de sus intereses nacionales, partidaria de emplear los cauces europeos cuando le conviniera pero con sus propias condiciones, incluso a expensas de otros cuando le pareciera necesario? La relación especial que estableció con Rusia, incluido el acuerdo bilateral para cubrir sus necesidades energéticas, indicó con claridad hacia dónde se inclinaba la Alemania unificada. Ahora, su reacción ante la primera crisis histórica de la eurozona confirma esa conclusión. Algunos critican y responsabilizan personalmente a Merkel por esta situación. El ex ministro de Exteriores Joschka Fischer dice que la que en otro tiempo era Señora Europa parece haberse convertido en Frau Germania. Desde luego, esta "canciller del centro", precavida y aficionada a los consensos, carece de la audacia estratégica de un Adenauer o un Kohl; pero ni siquiera un líder más valiente podría hacer gran cosa cuando tiene a la opinión nacional en contra. Y, desde los estridentes titulares del diario sensacionalista Bild hasta las decisiones a regañadientes del Tribunal Constitucional alemán, es indudable que los alemanes no están dispuestos a hacer más sacrificios por "Europa". Si pudieran, seguramente preferirían que les devolvieran el marco. O, a falta de eso, un pequeño nordo (o quizás neuro) sólido y firme con los países del norte de Europa, y dejar a los irresponsables países del sur que se las arreglaran con un sudo (o pseudo) más débil (el mérito de haber acuñado estos términos corresponde al ex jefe de Barclays Martin Taylor). Las ramificaciones económicas son complejas e inciertas, pero es posible que esta primavera represente el principio del fin de la eurozona; el paso definitivo y más audaz del europeísmo alemán de posguerra. Quiero decir sin reservas que los británicos y los franceses son los que tienen menos derecho a quejarse de que los alemanes empiecen a comportarse como ellos. Sería pura hipocresía. Es una lástima que pase, porque, a largo plazo, los intereses de británicos, franceses, alemanes y

218 todos los demás europeos exigen que nos pongamos de acuerdo en un mundo de nuevos gigantes como China, pero los alemanes tienen perfecto derecho moral a ser tan miopes y tener tanta estrechez de miras como nosotros. Por tanto, en vez de quejarme, tomo nota de una última ironía. Hace 20 años, los conservadores euroescépticos británicos se alarmaron ante la perspectiva de que una Alemania unida nos impusiera un Superestado federal europeo. Algunos llegaron a gritar: "¡Un Cuarto Reich!". Hoy, mientras los conservadores euroescépticos británicos se aproximan de nuevo al poder, podemos ver que el resultado imprevisto de la unificación alemana ha sido, en realidad, la aparición de una Europa más británica: con una ampliación espectacular hacia el este, más intergubernamental que federal, y con una Alemania que se dedica a defender tranquilamente sus intereses nacionales a su manera, como Gran Bretaña y Francia. La verdad es que quien debería colgar un mensaje de agradecimiento en la página web del 80º cumpleaños de Kohl es Margaret Thatcher. Otra cosa es si al viejo estadista le gustaría esa felicitación. http://www.elpais.com/articulo/opinion/motor/aleman/Europa/estanca/elpepiopi/20100402elp epiopi_13/Tes

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Vuelven las ventas sobre plano Los precios de vivienda libre son ahora un 25% más baratos que en 2007.- Las promotoras con suelo pagado reinician la actividad con menos márgenes de beneficios y valores ajustados JUAN CARLOS MARTÍNEZ 01/04/2010 Después de dos años de sequía en la construcción de viviendas y con todas las cautelas del mundo, algunas empresas inmobiliarias han decidido que ya es hora de poner en valor los miles de metros cuadrados de suelo que acumulan en sus carteras.Y lo hacen con ajustes de precios que oscilan entre el 20% y el 35% respecto a los máximos registrados a finales de 2007, cuando estalló la crisis. Y en zonas donde la demanda es alta y el stock de viviendas llave en mano no resulta muy significativo. Recuperan así términos tan olvidados entre los profesionales del sector, como ventas sobre plano o reservas. A lo grande, como en los mejores años del boom, lo hace Pryconsa, que lleva un mes comercializando dos nuevas promociones en Madrid. Se trata de 113 pisos en el distrito de San Blas. Unos, en la calle de Miguel Yuste con vuelta a la de Isaac Ramos, dentro del reconvertido polígono de Julián Camarillo. Los otros, en el barrio de Las Rosas, junto al estadio de La Peineta. "Desde septiembre del año pasado hemos notado un punto de inflexión. Se ve que la situación ha mejorado, que la gente se está moviendo. Ahora se trata de saber lo que el cliente está dispuesto a pagar en cada sitio", comenta Manuel González, director de marketing de la promotora madrileña. "Tenemos los terrenos pagados. Podíamos haber pedido financiación, pero preferimos no meternos en locuras", asegura González en relación a los 10,9 millones de euros que, en octubre de 2007, les costó el solar adquirido al Ayuntamiento de Madrid en Miguel Yuste. Las condiciones de esta adquisición han permitido a la inmobiliaria ajustar el precio final, modificar el proyecto original y obtener beneficios. "No con los márgenes de antes, pero saldrá rentable si vendemos a estos precios", corrobora. Hace dos años, cuando se hizo el lanzamiento de esta promoción, se ofertaban 71 viviendas de uno y dos dormitorios, con el metro construido a 4.500 euros. Ahora serán 52 viviendas de dos y tres dormitorios y otras seis de un dormitorio, reservadas para alquilar, tras un acuerdo firmado con la Comunidad de Madrid, con una rebaja del 22%, hasta los 3.500 euros. Por el precio de un dormitorio dan dos "Al bajar los precios, algunos clientes tienen capacidad para adquirir una vivienda más grande que hace dos años. El que antes tenía recursos para comprar un piso de un dormitorio, ahora con el mismo esfuerzo puede llegar al de dos, y al que sólo le alcanzaba para uno de dos se aventura con el de tres", sostiene González, quien asegura que tanto en Miguel Yuste como en Las Rosas ya se han señalizado las primeras operaciones. Además de estas dos promociones, esta inmobiliaria tiene previsto iniciar en breve otras actuaciones en Carabanchel y Colmenar Viejo, el pueblo de la sierra madrileña donde, según su directivo, incluso se han subido ligeramente los precios en el último semestre. La política de Pryconsa para proceder a ese ajuste y ganar dinero no es muy común entre la mayoría de los promotores. Muchos siguen intentando pagar los préstamos que firmaron entre 2006 y 2007 para comprar terrenos a precios estratosféricos. Daban por hecho que la demanda

220 iba a seguir comprando pisos a precios cada vez más caros. Durante el periodo más alto de la burbuja inmobiliaria se llegaron a pagar más de 3.000 euros de repercusión sobre el metro edificable, lo que obligaba a poner el precio final construido por encima de los 5.000 euros. Estos precios han quedado desfasados, muy por encima de lo que el comprador de hoy está dispuesto a pagar. Estos terrenos no tienen salida en este momento, salvo en los activos de las entidades crediticias. Quienes sí tienen todo el margen para ajustar los precios y garantizar la financiación de los compradores son los bancos y las cajas de ahorro, que también han decidido embarcarse en la promoción de obra nueva. La inmobiliaria del Banco Santander, Altamira, acaba de abrir un espacio en su portal para informar de promociones que prevé desarrollar a corto plazo si cuenta con demanda suficiente. Se trata de 93 pisos en el conjunto residencial Los Sueños del nuevo barrio Fuente Lucha, en Alcobendas (Madrid), que representan la primera actuación impulsada por la inmobiliaria del banco presidido por Emilio Botín. Hay más iniciativas en distintas fases. Tardarán en iniciarse las viviendas sobre la parcela de Alcalá de Henares que ocuparon durante años los laboratorios Liade. Un ámbito de 68.681 metros cuadrados que todavía debe urbanizarse antes de dar paso a 600 viviendas y 761 plazas de garaje. "Ya hemos iniciado el vaciado de la parcela", asegura una de las comerciales de Alcobendas. En los dos primeros días se habían apuntado 60 personas a la promoción. No todas comprarán, pero sí representa un número significativo para pulsar al mercado. Al estar en fase de precomercialización, Altamira firmará contratos con un abono de 1.000 euros que garantice al cliente la elección preferente de la vivienda. El siguiente paso será el pago de 4.000 euros por la reserva, que se hará efectiva antes del próximo 30 julio. Y a partir de esa fecha, pagos mensuales hasta cubrir el 10% del precio total antes de la entrega de llaves, prevista para el primer trimestre de 2013. Junto al monte de El Pardo En esta promoción de Alcobendas, situada entre el casco urbano y el monte de El Pardo, los precios son un 33% más baratos de los que hace dos años pusieron, en el mismo barrio de Fuente Lucha, promotoras como Urbasevi, Láudea o la concursada Habitat en el lanzamiento de las primeras promociones. A una media de 3.000 euros, y con plaza de garaje y trastero incluidos, los pisos de uno a tres dormitorios, de 50 a 100 metros, oscilan entre 152.000 y 300.000 euros. Quien sí tiene ya previsto iniciar el próximo verano una promoción en la misma zona de Alcobendas (en Sueños esquina al paseo de Fuente Lucha) es la inmobiliaria Delta. Con precios que parten también de 3.000 euros el metro construido. Se trata de las 91 viviendas de la segunda fase del edificio Aldora, en régimen de comunidad de bienes. La primera fase, toda vendida, ya está iniciada. De la tercera ya ha comenzado la prerreserva. Quedan disponibles un piso de dos dormitorios, con 79 metros, por 245.000 euros, un ático de 114 metros y 11 de terraza, por 381.000 euros, y 34 viviendas en planta, todas de tres dormitorios, entre 322.000 y 368.000 euros. En el precio se incluye la plaza de garaje, trastero y gastos de escritura. No es la única comunidad de propietarios abierta por Delta en Madrid. En Valdebernardo, junto al parque Fauna, sólo quedan cuatro de las 82 viviendas que empezarán a construirse en septiembre. Y anuncia la próxima formación de otras en Tres Cantos, Torrelodones y San Sebastián de los Reyes.

221 Estas señales de reactivación reaparecen tras un año, 2009, en el que se tocó fondo. Se iniciaron 80.000 viviendas libres, 88% menos que en 2006 (665.000) y la mitad de las iniciadas en 1992 y 1993, durante la anterior crisis. En Cantabria, durante el primer trimestre de ese año, se inició sólo una vivienda, y siete en Cádiz entre noviembre y diciembre. Noviembre fue el peor mes. En todo el país se iniciaron 4.198 viviendas libres. En el litoral valenciano y Murcia, muy activo en los años de bonanza, se iniciaron 66. En Madrid, el peor mes ha sido diciembre pasado, con tan sólo 130, un 72% menos que el mismo mes de 2008, con la crisis en pleno apogeo. http://www.elpais.com/articulo/economia/Vuelven/ventas/plano/elpepueco/20100401elpepuec o_5/Tes

La construcción de viviendas ha caído el 79% desde la crisis EL PAÍS - Madrid - 26/03/2010 Los promotores iniciaron más de 762.000 viviendas en 2006, en el momento álgido del boom. La caída libre de las nuevas construcciones llegó el año pasado hasta las 159.284, el número más bajo en décadas. El desplome de 2009 superó el 51%, aún mayor que el experimentado en 2008, del 47%. Desde que empezó la crisis, en 2007, la iniciación de viviendas ha caído un 79,1%. Otro de los efectos de la debacle inmobiliaria es la mayor importancia relativa de las viviendas de protección oficial. De representar una parte mínima de la construcción, han pasado a igualar en la práctica el volumen de nuevos pisos del mercado libre. Así, el año pasado se iniciaron 80.230 viviendas libres y 79.054 protegidas. http://www.elpais.com/articulo/economia/construccion/viviendas/ha/caido/79/crisis/elpepueco /20100326elpepieco_11/Tes

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Fall in German jobless points to recovery By Stanley Pignal in Brussels Published: March 31 2010 12:12 | Last updated: March 31 2010 12:12 German unemployment fell unexpectedly in March, recording its biggest drop in nearly two years, adding to signs of a broad-based recovery in Europe’s largest economy, although separate eurozone data, also released on Wednesday, painted a more nuanced picture. The seasonally adjusted jobless rate fell 0.1 per cent to 8 per cent, according to the Federal Labour Agency, defying economists’ expectations of a rise. Alphaville: The eurozone’s gone double-digit - Mar-31 Why Germany can’t be a model for the eurozone - Mar-30 Germany to trim spending as orders grow - Mar-05 ‘Services’ wins place at centre of industry - Mar-24 The data add to a stream of economic indicators across the eurozone – from surveys of purchasing managers to consumer polls – that have pointed to a more sustained recovery than had been expected even some weeks ago. Ken Wattret, economist at BNP Paribas, said: “The figures went way beyond our expectations and continue the recent stream of robust data.” Germany's unemployment rate has been contained by the extensive use of short-time work schemes, known as Kurtzarbeit, where companies are given incentives not to lay off workers during the downturn. "There remains a risk of renewed increases in unemployment later this year as the government’s Kurzarbeit subsidies expire for many workers," warned Jennifer McKeown at Capital Economics. For the 16 countries that use the euro, data for February also out Wednesday showed unemployment across the block creeping up to 10 per cent, or 0.1 points, its highest level in 12 years. Meanwhile, inflation in the eurozone jumped to 1.5 per cent year-on-year in March, up from 0.9 per cent in February and its highest level since December 2008, also according to the European Union's statistical arm. It is not the first time that the double-digit jobless rate threshold has been breached, although later revisions have pushed the figure back below the psychological barrier. Unemployment is a lagging indicator, and most economists are expecting it to peak some time this year, perhaps at 10.5 per cent. But the three-month pause at 9.9 per cent had prompted some observers to hope the recovery might push the figure down sooner than in previous downturns. Fifteen of the 16 users of the single currency had either stable or rising joblessness, with Slovenia the outlier. Spain topped the table with 19 per cent unemployment (up 0.1 per cent), with the Netherlands once against at the other end with 4 per cent of the potential workforce inactive (also up 0.1 per cent).

223 A breakdown of the inflation figure will not be available for another fortnight, but the unexpected jump in the headline rate will be noted by the European Central Bank in Frankfurt. Its policy of keeping interest rates low – and indications it will keep them there for the foreseeable future – is partly premised on inflation staying at or below its 2 per cent target. But Marco Valli at UniCredit research said that one-off factors such as the price of fresh food during the cold spell and rising energy costs were likely to have influenced the figures. "We think the ECB won’t be overly impressed by the data," he said. Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. http://www.ft.com/cms/s/0/64369220-3cae-11df-89ca-00144feabdc0.html The eurozone’s gone double-digit on unemployment Posted by Izabella Kaminska on Mar 31 10:57. As Reuters reported on Wednesday: The euro zone’s 10 percent jobless rate in February was the highest since August 1998 and in line with market expectations. A month earlier unemployment was at 9.9 percent. The figure pointed to only subdued recovery from the worst economic crisis in decades, with high unemployment curbing consumer spending that is key to reviving economic growth. Sluggish private demand also keeps the lid on price growth. Unemployment in the 27-country European Union bloc, meanwhile, reached 9.6 per cent, up 0.1 per cent from January. The country most responsible for pushing the eurozone into double-digit unemployment territory was Spain, according to Barclays Capital’s James Ashley. As he wrote on Wednesday, Spain’s own unemployment rate has now reached 19 per cent (emphasis ours): The increase in unemployment in February reflects a rise of 28k m/m in Spanish unemployment (the first increase since September, and consistent with our view that part of the apparent improvement in the Spanish data was temporary), along with more modest increases in France (18k m/m), Italy (4k m/m) and Germany (2k m/m). The Spanish unemployment rate has now reached 19.0% (up by 0.1pp from January), although double-digit unemployment rates are now also being recorded in France (10.1%), Portugal (10.3%), and Ireland (13.2%). The Greek unemployment rate had also reached 10.2% by Q4, and although no Greek data for Q1 are available (only published quarterly, with a long lag) it is probable that the Greek rate climbed still higher in Q1. The prospects for in the near-term, meanwhile, don’t look good either, writes Ashley. According to the analyst, the market should expect further increases in the eurozone jobless figure, at least until the end of the first half. After that, though, there could be some stabilisation, he says, because there are signs of a slowdown in the pace of deterioration. Surveys of firms’ hiring intentions are also trending higher. Related links: A UK labour boom (updated) – FT Alphaville Bank of Spain Sees Lower GDP, Bigger Budget Gap Than Government - Bloomberg This entry was posted by Izabella Kaminska on Wednesday, March 31st, 2010 at 10:57 http://ftalphaville.ft.com/blog/2010/03/31/193136/the-eurozones-gone-double-digit-on-unemployment/

224 COLUMNISTS Why Germany cannot be a model for the eurozone By Martin Wolf Published: March 30 2010 22:47 | Last updated: March 30 2010 22:47

“The effort to bind states together may lead, instead, to a huge increase in frictions among them. If so, the event would meet the classical definition of tragedy: hubris (arrogance); Ate (folly); nemesis (destruction).” Thus, in December 1991, did I conclude an article on the rush to monetary union. I am aware of the commitment of Europe’s elite to the success of the European project. But the crisis is profound – for the eurozone, the European Union and the world. As Wolfgang Münchau has pointed out, last week’s European Council was not a solution but a fudge. Martin Wolf: China’s exchange rate concerns us - Dec-08 Martin Wolf: Tax the windfall banking bonuses - Nov-19 Economists’ forum - Oct-01 Blog: Money Supply - Oct-07 Martin Wolf: Victory in the cold war was a start as well as an ending - Nov-10 Martin Wolf: Turner is asking the right questions on finance - Sep-10 The immediate challenge is Greece. On this, the heads of government decided that “as part of a package involving substantial International Monetary Fund financing and a majority of European financing, euro area member states are ready to contribute to co-ordinated bilateral loans”. But, it continued: “Any disbursement ... would be decided by the euro member states by unanimity subject to strong conditionality and based on an assessment by the European Commission and the European Central Bank ... The objective of this mechanism will not be to provide financing at average euro area interest rates, but to set incentives to return to market financing as soon as possible.” Germany, the most powerful eurozone member, got its way. But the outcome was unpopular elsewhere, not least in France, and with the ECB, which does not want the fund to intervene in monetary policy. Nicolas Sarkozy, the French president, must look with horror on intervention by a Washington-based institution headed by Dominique Strauss-Kahn, a heavyweight potential rival for his job. Yet it would be quite wrong to conclude that this is a big victory for the IMF or even for Germany. The outcome looks unworkable.

225 First, would this be an IMF or an EU programme? What happens if the IMF disagrees with the Commission? Such disagreement seems likely. The fiscal tightening agreed by Greece, of 10 per cent of gross domestic product over three years, looks impossible, given the absence of monetary policy or exchange rate flexibility. Maybe no programme would succeed given the unfavourable initial conditions. Second, what are the chances that the eurozone would act unanimously in support of an IMF programme? Finally, why should the envisaged “help” help? Greece’s immediate problem is the high interest rates it is paying (see chart). To offer liquidity at a penal rate, when Greece has no access to the market, would worsen its solvency problem. Moreover, by the time this assistance were offered, it would be far too late. So far, so bad. It is when one looks at the big challenges that things look truly frightening. One worry is the unwillingness to accept default. More important, Germany’s views on how the eurozone should work are wrong. Herman Van Rompuy, president of the European Council, stated after the meeting that “we hope it will reassure all the holders of Greek bonds that the eurozone will never let Greece fail”. Only two ways of meeting this commitment exist: either members write blank cheques in favour of one another or they take over the public finances – and so the government – of errant members. Germany would never permit the former; but politics would never permit the latter, particularly in the big countries. Thus, Mr Van Rompuy’s statement looks absurd. Now turn to the bigger point. Last week’s statement also argued that “the current situation demonstrates the need to strengthen and complement the existing framework to ensure fiscal sustainability in the eurozone and enhance its capacity to act in times of crises. For the future, surveillance of economic and budgetary risks, and the instruments for their prevention, including the excessive deficit procedure, must be strengthened.” The ruling idea here is that the weakening of fiscal positions in peripheral countries reflects a lack of fiscal discipline. That is true of Greece and, to a lesser extent, Portugal. But Ireland and Spain had what seemed to be rock-solid fiscal positions (see charts). Their weakness lay in private sector financial deficits. It was only when the private sector corrected after the crisis that the fiscal deficit exploded. Since the problem was in the private, not the public sector, monitoring must also focus on the private not just the public sector. Yet the asset bubbles and private sector credit expansions in the periphery were also the mirror image of the absence of growth in real demand in the core (see chart). This was how the ECB’s monetary policy produced a more or less adequate rate of expansion of overall eurozone demand. So, as soon as we ask what was the underlying cause of the fiscal catastrophes of today, we must realise that they were ultimately the result of reliance on an accommodative monetary policy, employed to offset the feeble growth of demand in the eurozone’s core and, above all, in Germany. Such a discussion of internal eurozone demand and imbalances is not one German policymakers wish to have. So long as that is the case, the prospect for the “improved economic co-ordination” mentioned in the Council statement is nil. Worse, Germany does wish to see a sharp move by its partners towards smaller fiscal deficits. The eurozone, the world’s second largest economy, would then be on its way to being a big Germany, with chronically weak internal demand. Germany and other similar economies might find a way out through increased exports to emerging countries. For its structurally weaker partners –

226 especially those burdened by uncompetitive costs – the result would be years of stagnation, at best. Is this to be the vaunted “stability”? The project of monetary union confronts a huge challenge. It has no easy way of resolving the Greek crisis. But the bigger issue is that the eurozone will not work as Germany wishes. As I have argued previously, the eurozone can become Germanic only by exporting huge excess supply or pushing large parts of the eurozone economy into prolonged slump, or, more likely, both. Germany could be Germany because others were not. If the eurozone itself became Germany, I cannot see how it would work. Evidently, Germany can get its way in the short run, but it cannot make the eurozone succeed in the way it desires. Huge fiscal deficits are a symptom of the crisis, not a cause. Is there a satisfactory way out of the dilemma? Not so far as I can see. That is really frightening. [email protected] http://www.ft.com/cms/s/0/d598e6fc-3c2c-11df-b40c-00144feabdc0.html

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30.03.2010 Greece raises €5bn at 5.9% - the deal had no effect on the market rate

The Wall Street Journal reports that Greece paid a stiff premium to raise €5bn on Monday, signalling that the EU announcement last week of a possible rescue package has done little to lower the troubled country's high cost of borrowing. Compared with Greece's two previous bond issues in 2010, demand was relatively subdued. Greece is paying a coupon of 5.9% on the new bond, 3.34 percentage points above what Germany pays to borrow money. The new €5 billion bond issue means Greece has now sold about €20 billion of bonds, or 43% of its 2010 target. (The “backstop” confidence trick is already backfiring. Several politicians have expressed the hope that the backstop bailout arrangement would persuade the market to offer lower rates, but this could only ever succeed if the markets had some clarity on the likely interest rate of the backstop, and a firm political commitment for a bail-out at that rate. The German propaganda has been that those interest rates would be close to market rates. But since the market always supplies finance at market rates, the only conceivable circumstance of a Greek bailout would be a situation in which the markets would offer Greece finance, say at 6% or thereabouts, but the Greek government refused to take it, or were unable to service the debts. But in that case, the German “backstop” would be worthless. The market are beginning are beginning to realise that the backstop is not an actual guarantee)

Gideon Rachman on the pending end of the euro area Gideon Rachman of the FT has been what we would consider a moderate eurosceptic, and it is no surprise that the euro crisis is capturing his attention. In his latest column, he made compared the euro area to the film The Big Fat Greek Wedding. He makes one important point about the politics of it, with which we agree. The EU is in the process of wasting a crisis:

228 “When the euro was launched, leading German politicians used to argue, with evident relish, that monetary union would eventually require political union. The Greek crisis was precisely the sort of event that was expected to force the pace. But, faced with a defining crisis, Ms Merkel’s government is avoiding airy talk of political union – preferring instead to force harsh economic medicine down the throats of the reluctant Greeks.” We see it exactly like this. Monetary union has been an imperfect project all along. This imperfection is not Ms Merkel fault. But now comes the existential crisis, and the political reaction is to refuse to fix the system. Auerback’s conspiracy theory We are not usually friends of conspiracy theories, in view of our experience, but any rational explanation of last week’s European Council agreement would have to come to the conclusion that Germany wants to drive the euro area into the ground – having now found a suitable vehicle. “...it finally gave Berlin the leverage to fully impose its version of hair shirt economics on those allegedly lazy southern Mediterranean scroungers. Left conveniently unstated is the idea that the longer the PIIGS are forced to wallow in stagnant growth, the more persistent will be the very budget deficits and the larger the public debt to GDP ratios for which they are now being punished. It’s akin to someone having a high temperature because he/she is suffering from influenza and therefore denying that person medicine on those grounds. Trying to work against the automatic stabilizers with austerity programs will be futile unless you start dismantling some of the automatic capacity, which gives rise to these stabilizers.” Strauss-Kahn does not accept any EU leadership This is going to be interesting – and another signs of the incredible incompetence of European leaders. When they decided the formula of burden sharing with the IMF, but with EU leadership, they forgot to clear this with the IMF beforehand. Oooops. “...If, and it’s a big if, Greece asks for support, we will provide support for Greece as one of our members, as we do with any other member,” Bloomberg quotes Strauss-Kahn. “it will be an IMF program decided by the IMF as it happens with each and every country. The IMF will define the conditionality, as we do with any country.” So from his point of view, Greece is another Rumania of Hungary (or more likely another Latvia). Ireland’s ‘bad bank’ starts operating NAMA, Ireland’s “bad bank”, starts its operations today with €81bn in bad property loans left over from the financial crisis and is set to reveal larger-than-expected “haircuts”on €17bn of loans, the FT reports. The announcement will have direct implications for the level of capital the banks will need in the future. Irish bank shares fell sharply on Monday amid fears that the new financial requirements could prove crippling. http://www.eurointelligence.com/article.581+M515c56e88ec.0.html#

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Ireland to launch €81bn bad loan bank By John Murray Brown in Dublin Published: March 29 2010 21:09 | Last updated: March 30 2010 09:38 Ireland will on Tuesday begin operating a new “bad bank” to house €81bn in bad property loans left over from the financial crisis and set out new capital requirements that are expected to see the further nationalisation of its banking sector. Irish bank shares fell sharply on Monday amid fears that the new financial requirements could prove crippling. Doubts cloud Ireland bank reform - Mar-29 Irish unions agree to link pay to efficiency - Mar-30 In depth: European banks - Dec-21 Ireland's woes deepen as GDP shrinks further - Mar-26 Wolfgang Münchau: Gaps in the euro ‘league’ - Mar-21 Investors snap up Irish bonds - Mar-17 The National Asset Management Agency, the government’s so-called bad bank, is set to reveal larger-than-expected “haircuts”, or discounts, on €17bn of loans extended to Ireland’s top 10 biggest property developers – the first tranche of loans to be taken off the banks’ books. The announcement will have direct implications for the level of capital the banks will need in the future – and will in turn determine the extent of any increased government shareholding the banks may need to maintain regulatory capital levels. Shares in Allied Irish Banks, Ireland’s second-largest bank, lost almost 20 per cent amid investor fears that Dublin could end up owning as much as 70 per cent of it after losses are crystallised on loans transferred to the government’s bad bank. Also hit hard were shares in Bank of Ireland, the country’s largest bank. Its shares closed down 10.4 per cent as investors speculated that Dublin could take up to a 40 per cent stake. The bad bank’s role is to purge the banking sector of €81bn worth of loans – or about a fifth of total loans – extended during the boom years to Ireland’s leading property tycoons, who are now facing ruin. Brian Lenihan, the finance minister, and Matthew Elderfield, the financial regulator, will set capital adequacy rules for the banks once the state has taken over their most impaired property loans. Banks are expected to have to increase their tier one equity – the strongest type of capital buffer – to about 7 per cent, far higher than current levels. In total it is estimated that the banks will need €16bn in fresh capital. If much of this is provided by the government this could have implications for Ireland’s sovereign risk profile. The plan is the centrepiece of Ireland’s rescue of its shattered economy, and follows the revealing in December of severe public sector pay cuts, which helped restore investor confidence in Brian Cowen’s Fianna Fáil-led coalition government. Like Greece, Portugal and Spain, Ireland is facing a sovereign debt crisis, triggered by investor concerns over the hole in its public finances. At 11.7 per cent of gross domestic product in 2009, the budget deficit is the second largest in the eurozone after Greece.

230 However, Ireland has already taken decisive action with a fiscal tightening since late 2008 of 6 per cent of GDP. Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. http://www.ft.com/cms/s/0/880ec946-3b6a-11df-b622-00144feabdc0.html

30.03.2010 Smoke and mirrors in Brussels By: Wolfgang Münchau

Another knife-edge summit in Brussels, another late-night agreement, followed by self- congratulatory poses from European leaders: the “emergency funding agreement” for Greece sounded like a significant deal on Thursday night. But then you wake on Friday morning, examine the details and realise it was mostly smoke and mirrors. They had you fooled for a minute. The aspect that puzzled me most was the announcement that a rescue would come in the form of a loan at market interest rates. This surely must imply that the market would not be willing to lend money to Greece at market interest rates. That is an absurd proposition. In fact, it is hard to imagine even a hypothetical scenario in which the European Union would disburse the emergency aid. Greece would have to be cut off from the capital markets; in such a situation it is difficult to imagine that a loan from the EU – at prohibitively high interest rates – would solve any problems. Judging from some of the comments from Greece, I suspect the big idea is to try to get by without help, using the promise of an emergency fund as a psychological support for the market. This is a dangerous confidence trick. It will backfire, perhaps not right away, but at some point. It was no surprise that Standard & Poor’s, the rating agency, concluded that its rating of Greek government debt would be unaffected by the deal. The Greek problem is not simply access to capital – which has not been a problem during its crisis so far – but the interest rates the country has to pay for its debt, which are too high given the likely trajectory of its economy. The Greek government recently announced an austerity package that aims to shave 4 percentage points off the deficit-to-gross domestic product ratio. This will result in a deep and probably long recession. When a country adopts an austerity package of such magnitude it needs some form of relief, simply to make it through the recession. This would normally come either through devaluation or from a low- interest loan, usually from the International Monetary Fund, or ideally both. Greece will have

231 neither. Under these circumstances there may come a point when the Greek government concludes that default is the financially superior option, especially since 70 per cent of Greek debt is held by foreigners. If they are smart, they will take the EU money and then default. In any case, default is still the true backstop, not the emergency loan. Bond market investors should be well aware of that. The agreement, and the way it was struck, raises plenty of questions about the governance of the eurozone, and the readiness of its political leadership to support it in the long run. As the French economist Agnès Bénassy-Quéré has noted: the combination of no bail-out, no default and no debt monetisation is logically inconsistent. Hence a conditional resolution system is needed. A package of loans at market rates, in which 16 prime ministers or heads of state have a veto, is not going to resolve this fundamental conflict. The Greeks had better make sure they do not get cut off a week before the next German state elections. The EU did not strike this particular deal because anybody believed it would constitute an ideal crisis resolution mechanism, but because it was an expedient compromise between two conflicting positions. The priorities for Angela Merkel, German chancellor, were to ensure strict compliance with the “no bail-out” rule and a veto over the disbursement of emergency aid. Berlin does not want to pay a cent. The priority of the European Central Bank has been to reduce the role of the IMF. The reason is that this would give the IMF an undue influence over the economic policies of the eurozone, and might challenge independence of the ECB. The only logical way to accommodate both positions was to concoct an ingenious mechanism so restrictive that it is unlikely ever to be invoked. This agreement does not solve the problems of Greece, or any other country in trouble. But it solves the problems of Ms Merkel and, at least partially, those of the ECB. At no point during the summit did EU leaders even contemplate the idea of trying to solve the double threat that hangs over the future of the eurozone – the lack of an effective resolution regime and the problem of the eurozone’s internal imbalances. In the meantime, we are still asking the same uncomfortable questions as we did last week. Is the Greek austerity plan realistic? Will Greece be able to pull through? What happens if Portugal gets into difficulty? What about Spain? What about Italy? Is there an agenda to deal with current account imbalances? Will Germany ever accept any responsibility for the cohesion of the eurozone, other than expecting others to converge with Germany? All the questions are still out there, unanswered. I must admit that the late-night meetings, the dramatic announcement of an agreement, and the press conferences by European leaders are highly effective tools to impress the outside world. Ms Merkel in particular is a very persuasive politician. But the politics of smoke and mirrors cannot fool all the people all of the time. This will not end well. http://www.ft.com/comment/columnists/wolfgangmunchau

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March 29, 2010 OP-ED COLUMNIST Punks and Plutocrats By PAUL KRUGMAN Health reform is the law of the land. Next up: financial reform. But will it happen? The White House is optimistic, because it believes that Republicans won’t want to be cast as allies of Wall Street. I’m not so sure. The key question is how many senators believe that they can get away with claiming that war is peace, slavery is freedom, and regulating big banks is doing those big banks a favor. Some background: we used to have a workable system for avoiding financial crises, resting on a combination of government guarantees and regulation. On one side, bank deposits were insured, preventing a recurrence of the immense bank runs that were a central cause of the Great Depression. On the other side, banks were tightly regulated, so that they didn’t take advantage of government guarantees by running excessive risks. From 1980 or so onward, however, that system gradually broke down, partly because of bank deregulation, but mainly because of the rise of “shadow banking”: institutions and practices — like financing long-term investments with overnight borrowing — that recreated the risks of old-fashioned banking but weren’t covered either by guarantees or by regulation. The result, by 2007, was a financial system as vulnerable to severe crisis as the system of 1930. And the crisis came. Now what? We have already, in effect, recreated New Deal-type guarantees: as the financial system plunged into crisis, the government stepped in to rescue troubled financial companies, so as to avoid a complete collapse. And you should bear in mind that the biggest bailouts took place under a conservative Republican administration, which claimed to believe deeply in free markets. There’s every reason to believe that this will be the rule from now on: when push comes to shove, no matter who is in power, the financial sector will be bailed out. In effect, debts of shadow banks, like deposits at conventional banks, now have a government guarantee. The only question now is whether the financial industry will pay a price for this privilege, whether Wall Street will be obliged to behave responsibly in return for government backing. And who could be against that? Well, how about John Boehner, the House minority leader? Recently Mr. Boehner gave a talk to bankers in which he encouraged them to balk efforts by Congress to impose stricter regulation. “Don’t let those little punk staffers take advantage of you, and stand up for yourselves,” he urged — where by “taking advantage” he meant imposing some conditions on the industry in return for government backing. Barney Frank, the chairman of the House Financial Services Committee, promptly had “Little Punk Staffer” buttons made up and distributed to Congressional aides. But Mr. Boehner isn’t the problem: Mr. Frank has already shepherded fairly strong financial reform through the House. Instead, the question is what will happen in the Senate.

233 In the Senate, the legislation on the table was crafted by Senator Chris Dodd of Connecticut. It’s significantly weaker than the Frank bill, and needs to be made stronger, a topic I’ll discuss in future columns. But no bill will become law if Senate Republicans stand in the way of reform. But won’t opponents of reform fear being cast as allies of the bad guys (which they are)? Maybe not. Back in January, Frank Luntz, the G.O.P. strategist, circulated a memo on how to oppose financial reform. His key idea was that Republicans should claim that up is down — that reform legislation is a “big bank bailout bill,” rather than a set of restrictions on the banks. Sure enough, a few days ago Senator Richard Shelby of Alabama, in a letter attacking the Dodd bill, claimed that an essential part of reform — tougher oversight of large, systemically important financial companies — is actually a bailout, because “The market will view these firms as being ‘too big to fail’ and implicitly backed by the government.” Um, senator, the market already views those firms as having implicit government backing, because they do: whatever people like Mr. Shelby may say now, in any future crisis those firms will be rescued, whichever party is in power. The only question is whether we’re going to regulate bankers so that they don’t abuse the privilege of government backing. And it’s that regulation — not future bailouts — that reform opponents are trying to block. So it’s the punks versus the plutocrats — those who want to rein in runaway banks, and bankers who want the freedom to put the economy at risk, freedom enhanced by the knowledge that taxpayers will bail them out in a crisis. Whatever they say, the fact is that people like Mr. Shelby are on the side of the plutocrats; the American people should be on the side of the punks, who are trying to protect their interests. http://www.nytimes.com/2010/03/29/opinion/29krugman.html?th&emc=th

March 30, 2010, 11:31 am Disappointing Roach I really don’t know what to say about Steve Roach’s column on China today. It doesn’t sound as if he’s read anything those of us calling for a tough stand on the renminbi have written. The whole thing is laid out as if China critics were focused on the US-China bilateral imbalance, when I’ve made it very clear that this is not at all the right thing to focus on: Fourth, it’s a mistake to focus only on direct China versus America competition. In many cases, Chinese exports compete with those of other developing nations. If the renminbi rises, those nations would become more competitive – and would also find their currencies appreciating against the dollar, offering new channels for onshoring. This may sound speculative, but it isn’t: remember, if China ends its artificial export of capital, that has to show up in trade flows one way or another. And his insistence that changing the value of the renminbi wouldn’t change overall balances, because these reflect savings, seems to me to imply both that he subscribes to the doctrine of immaculate transfer and that he’s oblivious to the fact that the world is both deeply underemployed and in a liquidity trap. I’m not necessarily right about China. You can argue, for example, that the dangers of confrontation outweigh the potential gains. But this issue deserves more than misrepresenting the views of the renminbi hawks and rolling out old macroeconomic fallacies.

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Blaming China will not solve America’s problem By Stephen Roach Published: March 29 2010 20:33 | Last updated: March 29 2010 20:33 America’s fixation on the “China problem” is now boiling over. From Google to the renminbi, China is being blamed for all that ails the US. Unfortunately, this reflects a potentially lethal combination of political scapegoating and bad economics. The political pressures are grounded in the angst of American workers. After more than a decade of stagnant real compensation and, more recently, a sharp upsurge in unemployment, US labour is being squeezed as never before. Understandably, voters want answers. It is all because of the trade deficit, they are told – a visible manifestation of a major loss of production to foreign competition. With China and its so-called manipulated currency having accounted for fully 39 per cent of the US trade deficit in 2008-09, Washington maintains that American workers can only benefit if it gets tough with Beijing. China warned of growing ‘land loan’ threat - Mar-28 China fund celebrates at conference - Mar-28 Opinion: China’s time for lying low has ended - Mar-28 Washington’s tricky debate over renminbi - Mar-28 Editorial: China’s moral hazard - Mar-02 China tells banks to halt lending - Jan-20 However appealing this argument may seem, it is premised on bad economics. In 2008-09, the US had trade deficits with more than 90 countries. That means it has a multilateral trade deficit. Yet aided and abetted by some of America’s most renowned economists, Washington now advocates a bilateral fix – either a sharp revaluation of the renminbi or broad-based tariffs on Chinese imports. A bilateral remedy for a multilateral problem is like rearranging the deckchairs on the Titanic. Unless the problems that have given rise to the multilateral trade deficit are addressed, bilateral intervention would simply shift the Chinese portion of America’s international imbalance to someone else. That “someone” would most likely be a higher-cost producer – in effect, squeezing the purchasing power of hard-pressed US consumers. The US would be far better served if it faced up to why it is confronted with a massive multilateral trade deficit. America’s core economic problem is saving, not China. In 2009, the broadest measure of domestic US saving – the net national saving rate – fell to a record low of -2.5 per cent of national income. That means America must import surplus saving from abroad to fund its future growth – and run current account and trade deficits to attract the foreign capital. Thus, for a savings-short economy, there is no escaping large multilateral trade imbalances. Yes, China is the biggest piece of America’s multilateral trade deficit. But that is because high-cost US companies are turning to China as a low-cost offshore efficiency solution. It also reflects the preferences of US consumers for low-cost and increasingly high-quality

235 goods made in China. In other words, savings-short America is actually quite fortunate to have China as a large trading partner. No, China is hardly perfect. Like the US, it, too, has a large imbalance with the rest of the world – namely, an outsize current account surplus. Just as responsible global citizenship requires America to address its savings deficiency, the world has every reason to expect the same from China in reducing its surplus saving. But these adjustments must be framed in the multilateral context in which the imbalances exist. Just as China is one of more than 90 countries with which America runs trade deficits, US-China trade now represents only 12 per cent of total Chinese trade. It is wrong to fixate on a bilateral solution between these two nations to address their multilateral imbalances. Yet some of America’s most prominent economists are claiming that a revaluation of the renminbi vis-à-vis the dollar would not only create more than 1m jobs in the US but that it would inject new vigour into an otherwise anaemic global recovery. Economists should know better. Changes in relative prices are the ultimate zero-sum game – they re-slice the pie rather than expand or shrink it. Currency, or relative price, adjustments between any two nations are not a panacea for structural imbalances in the global economy. What is needed, instead, is a shift in the mix of global saving. Specifically, America needs deficit reduction and an increase in personal saving, while China needs to stimulate internal private consumption. Washington’s scapegoating of China could take the world to the brink of a very slippery slope. It would not be the first time that political denial was premised on bad economics. But the consequences of such a blunder – trade frictions and protectionism – would make the crisis of 2008-09 look like child’s play. The writer is chairman of Morgan Stanley Asia and author of The Next Asia http://www.ft.com/cms/s/0/d5d309ec-3b5d-11df-b622-00144feabdc0.html

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29.03.2010 Greece to test markets this week

The FT reports that Greece is planning a €5bn bond issue to test – and reassure – financial markets that it in a position to raise finance all by itself. The FT reports from Athens that Greek bankers hoped that the package, in combination with the ECB’s decision to prolong re- finance operations, would ease the pain, and help it allow to raise €5bn this week. Finance minister George Papacontantinou subsequently denied the story, and said that no decision had been taken. The Greeks are not so much concerned that they won’t raise the money, but the costs may be prohibitively high. Bloomberg quotes the head of the Greek debt agency that the country would need to raise €15bn by the end of May (we have previously heard higher figures). The country faces €12bn debt repayments in April, with €8.2bn of five-year bonds and €3.9bn of bills maturing that month. It must repay €8.5bn of 10-year bonds in May. The article quotes investors as saying that uncertainty remains, and that it is not clear that Greece will be able to raise money at the rates it wants. The article also quotes Erik Nielsen of Goldman as saying that Greece will end up receiving some €25bn over the next 18 month, with the IMF share €10bn.

IMF to take lead if Greece fails to seek finance The FT has more details on the mechanics of the package to Greece. If Greece is cut off from capital markets, it will be the IMF which will take the lead, to be followed by a second and third tranche from the EU – even though the conditions of the loan would be decided jointly by EU and IMF. The reason is that most EU government cannot simply disburse money, but need parliamentary approval before disbursing the loans. The article quoted a European official as saying that the conditionality would be on the lines agreed for Latvia, Hungary and Romania. The article also says the European Commission would be making a proposal for enhanced co-ordination of economic policy by the end of May, to serve as a basis “for joint

237 taskforce reflection”.

Wolfgang Munchau on why the EU deal has resolved nothing It was presented as big agreement, and it succeeded politically. But Wolfgang Munchau writes that this is not a sustainable crisis resolution policy. Lending to Greece at prohibitively high interest rates – which is what this agreement logically implies – is not a true backstop. Default still is – and at those conditions the point will come when Greece will find it financial more attractive default, perhaps after taking EU money, than to go through a programme which cannot succeed. The problem for Greece is that its economy is in far too weak a position to sustain such a massive fiscal retrenchment. It would require at the very least cheap brdiging loans to the tide the country over.

Kathimerini on why the EU deal has resolved nothing Vassilis Zira, of Kathimerini, has listed the many grey areas in the agreement, which includes every almost every detail, such as the amount of the loan, the duration, the interest rate, terms and conditions. He said the text was worded so that everybody was happy. He notes that the Germans said that they will only pay in the case of bankruptcy (i.e. post default?)

Edward Hugh on why the EU deal has resolved nothing Edward Hugh makes an interesting additional point about the difference in loan rates between the IMF and the EU. If the EU loan were as low as the IMF loan, euro area countries like Spain would complaint, as they would be paying higher rates. But if the IMF loan rate is signficantly cheaper than that of the EU, non-EU emerging market countries will complain as the IMF would be subsidising Europe.

A voice from conservative Germany Writing in Frankfurter Allgemeine Zeitung Lueder Gerken, a conservative economist, argued that Germany’s exports surplus has nothing to do with the Greek crisis. Greece has benefits from Germany’s savings surplus, which has been rechanneled into the whole of the EU. The problem with Greece is that unlike other EU countries it has not used the capital imports for investment for consumptions.

Why leaving the euro is impossible Colm McCarthy of the Irish economy blog says leaving the euro is going to be a lot more complicated than people think. “For Greece (or any other fiscally-challenged member) to ‘leave the Euro’ involves the launch of a new curreny. From scratch. People talk as if the drachma lives on, cryogenically preserved in some icy Limbo for Currencies.

So the Greek government could thaw it out overnight, at some devalued exchange rate, and Bob’s your Uncle. This is moonshine. The Eurozone is not a fixed-exchange rate system, it’s a common currency area. The drachma has been abolished. This parrot is deceased.” If Greece left the euro, it would end up like euroised Montenegro, with the exception that, unlike Montenegro, it would have an unloved domestic currency, the new Drachma. The euro will continue to be the currency of choice.

238 Spain is delighted about the Euribor It’s Monday, and while others newspapers report the footscores, Spanish newspapers report the Euribor rates – which in Spain form the basis for the majority of mortgages. The three- month Euribor, the most important for the Spanish housing sector, has fallen from a peak of 5.4% in 2008 to 1.215% in March this year, which provides significant comfort to Spanish mortgage holders, many of whom must now in negative equity territory after the fall in their house prices. http://www.eurointelligence.com/article.581+M5dc560e48c4.0.html#

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Mercado inmobiliario La promoción de pisos muestra los primeros síntomas de reactivación Las empresas prefieren construir viviendas a mantener solares vacíos - El acceso a la financiación supone aún el gran freno de las inmobiliarias LUIS DONCEL - Madrid - 29/03/2010 El año pasado fue el más desastroso que recuerdan los promotores inmobiliarios, que han tenido que acostumbrarse a base de golpes a ver cómo se desplomaban sus indicadores de actividad. Los arquitectos concedieron 110.862 visados para viviendas en 2009, un 56% menos que el año anterior. El año pasado fue el más desastroso que recuerdan los promotores inmobiliarios, que han tenido que acostumbrarse a base de golpes a ver cómo se desplomaban sus indicadores de actividad. Los arquitectos concedieron 110.862 visados para viviendas en 2009, un 56% menos que el año anterior. Peor aún: esta es, de lejos, la cifra más baja del último medio siglo. Pero algunos empresarios vislumbran por fin algún dato positivo. Una luz todavía muy tenue, pero a la que se han agarrado para comenzar nuevas promociones, una palabra hasta hace poco tabú en el sector del ladrillo. La promotora del Santander ultima una decena de proyectos, seis de ellos ya muy avanzados. Afirma, otros tantos. Realia ha localizado suelo para comenzar dos promociones. Vallehermoso, del grupo Sacyr, se plantea ponerse manos a la obra. Y el empresario Joaquín Rivero, ex presidente de Metrovacesa y de la francesa Gecina, ha vuelto a España para empezar desde cero en un negocio en el que fue uno de sus príncipes. Rivero, a través de su pequeña inmobiliaria Bami, espera promover antes de verano una decena larga de proyectos. 500 ó 600 viviendas en total. La pregunta del millón es quién en su sano juicio va a construir en un país en el que, según las distintas estimaciones, sobra un millón de viviendas. Pero este stock está muy mal distribuido. Abundan pisos en zonas en las que es muy posible que nunca nadie vaya a querer comprar, y comienza a escasear en lugares muy determinados, en los que no parece tan descabellado poner ladrillos. Los más negativos -o quizá realistas- se explican esta incipiente reactivación únicamente como la respuesta a una situación muy complicada: "El mercado de la promoción está muy mal, pero es que el del suelo está infinitamente peor", dice el experto José Barta. Las compraventas de suelo están prácticamente congeladas, y los empresarios prefieren construir casas a tener paralizado un activo que cada vez pesa más en las cuentas de las inmobiliarias. "Tratan de convertir algo que ahora es totalmente ilíquido, el suelo, en algo un poco más líquido, los pisos. No es algo masivo, pero algunos están dando el paso. Sobre todo, las entidades financieras, que quieren mover suelos que se han quedado por impagos", explica Mikel Echavarren, consejero delegado de Irea. "El Banco de España da un mejor tratamiento a las provisiones que hay que dotar por una vivienda en construcción que por un suelo paralizado", añade. Pero el objetivo no es sólo quitarse suelo de encima. Algunos indicadores empiezan a dejar de dar malas noticias. Las hipotecas crecieron en enero un 2% respecto al mismo mes del año

240 pasado, al igual que las compraventas de pisos. Y los precios llevan ya dos años acumulando caídas. La política es vender cuanto antes, aunque sea más barato. Ya lo dijo la pasada semana el presidente de Realia, Miguel Bayón: "Las empresas sensatas que quieren seguir vivas han reducido sus precios al menos un 25%". Todos estos factores, junto con unos tipos de interés en mínimos históricos, están animando algo el sector. "Vamos a iniciar promociones en Sevilla y Valencia de unas 160 viviendas en total. Hemos visto que hay demanda potencial de compradores si obtienen financiación y no queremos perder el tren cuando el mercado residencial se reactive del todo", explican en Realia. Porque si hay un factor del que se sigue quejando el sector es de que la financiación sigue sin llegar para todo lo que huela a promoción. "Podríamos estar iniciando 100.000 viviendas más al año si nos dieran créditos", dice Pedro Pérez, portavoz del G-14, el lobby que aglutina a las grandes promotoras. Por ello, las primeras en lanzarse son las empresas respaldadas por una entidad financiera, -Altamira Real State, del Santander, tantea 10 proyectos, de los que seis ya están muy avanzados- o las que se inventan ideas imaginativas. Este es el caso de Afirma. La antigua Astroc, que ejemplificó el auge y caída del boom inmobiliario, se ha sacado de la manga Quabit, que planea construir a la vuelta de Semana Santa más de mil viviendas. El secreto para que una empresa como Afirma, que en los dos últimos años no ha iniciado ni una sola promoción, se lance ahora radica en la financiación. Lo hará a través de cooperativas, por lo que no tiene que poner ni un euro de su caja. Las casas se levantarán en solares de la propia empresa u otros que compren a buen precio a las entidades financieras, deseosas de deshacerse de un producto que se ha devaluado tanto tras la explosión de la burbuja. http://www.elpais.com/articulo/economia/promocion/pisos/muestra/primeros/sintomas/reactiv acion/elpepueco/20100329elpepieco_2/Tes

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La función pública en Europa España esquiva los recortes salariales a los funcionarios en la Unión Europea España se ha quedado al margen del resto de los países de la UE en materia de moderación salarial entre los funcionarios. Grecia suprimirá las pagas extras, Reino Unido reducirá los salarios a los empleados públicos con rentas más altas, Portugal congelará la nómina a los funcionarios y Alemania moderará las elevadas subidas de sueldos. En paralelo, los salarios públicos en España crecerán este año un 0,3%.

Pese a las alzas de los últimos años, el sueldo de los empleados públicos en España es un 40% inferior a los del sector privado Carlos Molina - Madrid - 29/03/2010 En el plan de austeridad enviado a Bruselas para reconducir el déficit, el Ejecutivo español se compromete a recortar un 4% el gasto de personal. Una importante parte de esa partida procederá de los funcionarios a través de las limitaciones establecidas en la tasa de reposición del empleo público, que en ningún caso podrá superar el 10% (sólo se incorporará un funcionario por cada diez que se jubilen) y a la congelación de la oferta de empleo público. Los sindicatos, sin embargo, ya han expresado su descontento ante la posibilidad de que no se repongan los puestos que queden vacantes en sectores considerados estratégicos y cuya tasa de reposición no iba a ser limitada, tal y como se firmó en el acuerdo entre los sindicatos de la función pública y el Ejecutivos suscrito en septiembre. El texto fijaba que la reposición se realizaría de forma íntegra en colectivos como fuerzas y cuerpos de seguridad, personal sanitario o educativos o plantillas de ayuntamientos con menos de 50.000 habitantes. Al final esas salvedades se han eliminado y los sindicatos han alertado sobre la posibilidad de que haya una atención deficiente en servicios básicos que son atendidos por empleados públicos. La subida pactada del 0,3% anual para este año deja a España a contracorriente frente al resto de países europeos que, castigados por el excesivo endeudamiento y el frenazo en la actividad, han optado por establecer ajustes entre las remuneraciones de los funcionarios. El caso más paradigmático es el de Grecia, con un derrumbe económico que ha obligado a un fuerte plan de ajuste. Una de las primeras medidas incluidas en el mismo ha sido el recorte de salarios a los funcionarios, que caerán de media un 30% como consecuencia de la supresión de las pagas extraordinarias. En lo que va de año ya se han producido dos huelgas generales convocadas por los sindicatos de funcionarios, ante el descontento de más de un millón de empleados públicos, que suponen el 22,3% de la población ocupada. En otros países, como Reino Unido y Portugal, han optado por la moderación salarial ante el ahorro que se generará para las arcas públicas. En el caso del Reino Unido, el Ejecutivo ha anunciado la congelación de salarios para los funcionarios con los ingresos más elevados y de los médicos de familias y dentistas que trabajan para la Seguridad Social, a través del cual prevé ahorrar 3.000 millones de libras (3.630 millones de euros) al año. Alemania modera los salarios El Ejecutivo portugués ha ido un poco más allá y ha decidido congelar los sueldos de los funcionarios. El ministro de Economía, Fernando Teixeira, ya ha advertido que esa moderación también se extenderá a los trabajadores de las empresas públicas y que no puede

242 asumir en este momento el compromiso de equiparar la evolución de los salarios con la inflación para los próximos años. Otro ejemplo que ilustra el cambio de dirección se ha producido en Alemania, que ha moderado las fuertes subidas salariales pactadas en los últimos ejercicios, que se elevaban por encima del 6% en tasa interanual. El alza salarial pactada para el sector privado se limitó a un 2,2% en 2009, según un estudio realizado por la consultora Watson Wyatt, tan sólo por encima por Suiza, Luxemburgo y Dinamarca. Y la tendencia se ha prolongado a lo largo de este año, en el que los sindicatos han firmado un acuerdo que regula los sueldos de dos millones de funcionarios (más de un 30% del total) para los tres próximos años. La subida pactada para este ejercicio se queda en un 1,2% y se reduce al 0,6% en 2011 y al 0,5% en 2012. El problema del sector público en España no es de dimensión. En España hay 2,6 millones de funcionarios, lo que supone un 14% del total de los ocupados. Entre los países similares en términos económicos, sólo Portugal está por debajo (un 13,1%), mientras que el resto está por encima, especialmente Suecia (34%), Bélgica (32,8%), Francia (29,1%) y Finlandia (26,4%) Por lo tanto, el problema se ciñe más bien a las fuertes subidas salariales que se han acumulado en los últimos ejercicios y a las duplicidades existentes en las distintas administraciones. Los incrementos de sueldos, sin embargo, no han posibilitado un acercamiento entre los salarios privados y públicos, ya que según el último informe del Banco de España, los primeros siguen distanciando en un 40% a los segundos. Esa brecha también se explica por las dos congelaciones de sueldo que sufrieron los funcionarios en 1994 y 1997, que no afectaron al sector privado. En los últimos diez años, las subidas salariales pactadas en el sector público nunca han sido superiores al 2% y en general siempre se han situado por debajo de la inflación. Sin embargo, a ese incremento pactado había que sumarle posteriormente los complementos de productividad, antigüedad y las pagas extraordinarias fijadas por las distintas administraciones. En 2009, el alza era del 2% y la que finalmente se produjo fue del 3,875%. Esa desviación de 1,8 puntos obedecía a tres conceptos: un punto a las pagas extraordinarias, medio punto al fondo de pensiones y tres décimas a la ocupación de puestos vacantes. Ese aumento multiplicó por cinco el incremento de la inflación (0,8%) y superó en 1,5 puntos el fijado para el sector privado. La plantilla del Estado cae un 25% La progresiva descentralización de la estructura territorial ha provocado un adelgazamiento paulatino del número de trabajadores dependientes de la Administración General. En 2001 había 760.193 empleados públicos a cargo del Estado, distribuidos entre la Administración central (434.538), las Fuerzas y Cuerpos de Seguridad del Estado (120.776), las Fuerzas Armadas (117.276), la Administración de Justicia (30.007) y los organismos públicos y entidades públicas empresariales (57.596). Diez años después, el número de empleados vinculados a la Administración General del Estado ha caído un 25%, hasta situarse en 576.197 trabajadores. El principal retroceso se ha producido en el caso de los trabajadores de la Administración Central, que prácticamente se han reducido a la mitad (239.865), seguidos por la Administración de Justicia y las entidades públicas, con un retroceso de 7.000 trabajadores respectivamente. En el lado contrario se sitúan los empleados de las Fuerzas y Cuerpos de Seguridad del Estado, que han crecido en 15.000 efectivos en el mismo periodo. 400.000 empleos autonómicos más El descenso en el número de trabajadores públicos que ha experimentado la Administración central ha sido más que absorbido por las comunidades autónomas.

243 De hecho, el total de empleados públicos ha crecido un 31% en diez años y se situó en julio de 2009 en 1,34 millones de trabajadores, una cifra superior al resultado de sumar los funcionarios de la administración general y la local. Si el análisis se circunscribe a comunidades autónomas destaca el fuerte incremento experimentado por el empleo público en cuatro regiones (Andalucía, Cataluña, Madrid y Comunidad Valenciana). Entre las cuatro aglutinan al 50% de los funcionarios vinculados a las administraciones autonómicas. La que más tiene es Andalucía, con 257.234, seguida por Cataluña (163. 804) y Madrid (161.884). Uno de cada cuatro empleados públicos de las autonomías corresponde a la categoría de otro personal, en el que están encuadrados los trabajadores de confianza y los asesores personales. De ellos, más de la mitad son empleados contratados para las instituciones ligadas al Sistema Nacional de Salud. Fuerte aumento en municipios El número de trabajadores ligados a la administración local también ha experimentado un crecimiento pronunciado en los últimos diez años (90.000 empleados más), aunque este incremento ha sido mucho más significativo en el caso del personal laboral (personal que en virtud de un trabajo presta un servicio remunerado a la administración pública). De los 627.092 trabajadores vinculados a las administraciones locales (ayuntamientos, diputaciones o cabildos), tan sólo una tercera parte corresponde a funcionarios de carrera. Los dos tercios restantes pertenecen a las categorías de personal contratado y de confianza (44.898 trabajadores). En el desglose por comunidades autónomas, destaca Andalucía, con 130.415 empleados, lo que supone el 20% del total. Por provincias sobresale el caso de Sevilla, con 30.793 trabajadores, una cifra superior al total registrado en regiones como Aragón, Navarra, Cantabria, Extremadura, Galicia o el País Vasco. http://www.cincodias.com/articulo/economia/Espana-esquiva-recortes-salariales- funcionarios-Union-Europea/20100329cdscdieco_1/cdseco/?view=print

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Greenspan Takes Issue With Yellen on Fed’s Role in House Bubble By Rich Miller and Josh Zumbrun

March 27 (Bloomberg) -- Alan Greenspan disputed suggestions by his former central bank colleague and current San Francisco Federal Reserve Bank President Janet Yellen that the Fed could have headed off the housing bubble by raising interest rates. “The general notion the Fed was propagator of the bubble by monetary policy does not hold up to the evidence,” the former Fed chairman said in an interview on Bloomberg Television’s “Political Capital With Al Hunt” airing this weekend. Yellen, who served as a governor on the Washington-based Fed board from 1994 to 1997 when Greenspan was at the helm, told a conference last June that “higher short-term interest rates probably would have restrained the demand for housing” and “slowed the pace of house price increases” before the bubble burst in 2006. Greenspan, who presented a paper on the financial crisis to a Brookings Institution conference in Washington earlier this month, said that the rise in house prices was fed by low long- term interest rates on Treasury securities and home loans that stayed down even as the Fed began tightening credit in 2004. “We ran into what we called the conundrum,” he said. “For decades, every time the Fed raised its short-term rates, the 10-year note, which is really a proxy for mortgage rates, the yield went up with it. This time it did not.” Behind the low level of long-term rates: a global savings glut as China, Russia and other emerging market economies earned more money on exports than they could easily invest. Those “massive changes and flows of fund” kept long rates low and pushed up house prices “across the globe,” Greenspan said. More Devastating The former Fed chairman called the financial crisis “a once-in-a-century event” whose consequences proved far more devastating than had been widely expected. “We all misjudged the risks involved,” he said. “Everybody missed it -- academia, the Federal Reserve, all regulators.”

245 The solution is for financial institutions to hold much more capital than they have in the past, so that they can draw on that money in times of crisis, according to Greenspan. Without adequate capital, any attempt at financial reform is likely to fail, he added. “I think we’re making this issue much too complex,” he said. “If you have adequate capital requirements, it almost doesn’t matter what else you do with regulation.” Greenspan also said the recent rise in Treasury yields represents a “canary in the mine” that may signal further gains in interest rates. Higher yields reflect investor concerns over “this huge overhang of federal debt which we have never seen before.” Capital Investment “I’m very much concerned about the fiscal situation,” said Greenspan, 84, who headed the central bank from 1987 to 2006. An increase in long-term interest rates “will make the housing recovery very difficult to implement and put a dampening on capital investment as well.” The yield on 10-year Treasury notes was 3.85 percent late yesterday in New York, up from 3.69 percent at the end of last week. The U.S. budget deficit reached a record $1.4 trillion for the fiscal year that ended Sept. 30 amid falling tax revenue from the recession, a bailout of the banking and auto industries, and the $787 billion economic stimulus package. Greenspan in 2001 supported the first round of tax cuts under President George W. Bush. At the time, the federal government operated with a surplus, and Greenspan told Congress he didn’t think the cuts would lead to a deficit. ‘Noticeable Good’ He told the Senate Budget Committee on Jan. 25, 2001, that “having a tax cut in place may, in fact, do noticeable good.” The next year he said it would be unwise to unwind the tax cut. As deficits returned, he became an opponent of further tax cuts, telling Congress in 2003 that “fiscal stimulus is premature.” In yesterday’s interview, the former Fed chairman said the U.S. economic recovery has been driven “to a very large extent” by a resurgence of stock prices. The Standard & Poor’s 500 Index has jumped 72 percent since its low on March 9, 2009. “You can see the whole blossoming of finance,” Greenspan said. “As these stock prices have gone up, debt became far more valuable, and you can see this huge issuance, especially of junk bonds.” A continued rally in share prices could help sustain the expansion, Greenspan said. Still, the unemployment rate could remain “not terribly far from where it is” at 9.7 percent as people re-enter the labor force to take advantage of job openings in a growing economy. --Craig Torres in Washington contributed to this story. Editors: Christopher Wellisz, Brendan Murray http://www.bloomberg.com/apps/news?pid=20601068&sid=a2REwRrZXTzk

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MARCH 27, 2006

NEWS: ANALYSIS & COMMENTARY How Rising Wages Are Changing The Game In China

A labor shortage has pay soaring. That is sure to send ripples around the globe.

For years, Yongjin Group has earned a decent profit selling lamps and furniture to the likes of Wal-Mart (WMT ), Home Depot (HD ), Target (TGT ), and Pottery Barn. But lately the company has seen its margins shrink to 5% -- half what Yongjin made when it opened its factory in the steamy southern Chinese city of Dongguan 14 years ago. Why? Labor shortages are forcing the company to boost wages. Last year salaries surged 40%, to an average of $160 a month, and Yongjin still can't find enough workers. "This business needs a lot of labor," says President Sam Lin. "This is a very tough challenge." Some 1,500 miles northeast, in the city of Suzhou, Emerson Climate Technologies Co. is facing similar woes. The maker of air conditioner compressors has seen turnover for some jobs hit 20% annually, and Emerson General Manager David Warth says it's all he can do to keep his 800 employees from jumping ship to Samsung, Siemens (SI ), Nokia (NOK ), and other multinationals that are now operating in the tech manufacturing hub. "It has gotten to the point that we are just swapping folks and raising salaries," says Warth. Wait a minute. Doesn't China have an inexhaustible supply of cheap labor? Not any longer. From the textile and toy factories of the south to the corporate headquarters and research labs in Beijing and Shanghai, the No. 1 challenge today is finding and keeping good workers. Turnover in some low-tech industries approaches 50%, according to the Institute of Contemporary Observation, a Shenzhen labor research group. Guangdong Province says it has 2.5 million jobs that remain unfilled, while Jiangsu, Zhejiang, and Shandong provinces say they, too, face shortages of qualified workers. "Before, people talked about China's unlimited labor supply," says Zhang Juwei, deputy director of the Institute of Population & Labor Economics at the Chinese Academy of Social Sciences in Beijing. "We should revise that: China is facing a limited supply of labor." Reports of labor shortages first cropped up in late 2004, but companies thought the phenomenon was temporary. Now a surge in both turnover and wage costs is convincing multinationals and their suppliers that the China game is changing permanently. With the gap between wages in China and those elsewhere gradually closing, the pressure to pass price increases on to consumers in the U.S. and other markets will start to build. As Citigroup (C ) noted in a February report: "The continuous growth of labor costs in China, even at a moderate pace...is likely to have implications for inflation worldwide." These factors eventually will force the Chinese to upgrade their entire industrial base to make higher-

247 margin goods. And those bigger paychecks are building a consumer class in China that multinationals want to target. "THERE IS A BREAK POINT" The wage issue has started to affect how companies operate in China. U.S. corporations and their suppliers are starting to rethink where to locate facilities, whether deeper into the interior (where salaries and land values are smaller), or even farther afield, to lower-cost countries such as Vietnam or Indonesia. Already, higher labor costs are beginning to price some manufacturers out of more developed Chinese cities such as Shanghai and Suzhou. "There is a break point where people will say this is too expensive," says Michael Barbalas, general manager at the Suzhou plant of Andrew Corp. (ANDW ), a Westchester (Ill.) maker of wireless networking gear. At his factory, he says, wages have been rising by 10% annually. This is a slow process, to be sure. Imports from the mainland have yet to fuel inflation in the U.S., while improved productivity in China has so far offset higher wages. But economists say those productivity gains are getting harder to find, and manufacturers who are seeing their margins hit, such as Yongjin, can hold out for only so long before they have to try to raise prices.

The pressure has as much to do with skills as it does with numbers. Although the total labor force is about 800 million, relatively few people have the qualifications employers want. For most textile, toy, and tech-assembly jobs, for example, export-oriented manufacturers prefer women from 18 to 25 years old or people with experience operating machinery. "The skills base does not meet the demands of a rapidly growing market," says C.P. Lee, Asia-Pacific human resources chief at Motorola Inc. (MOT ), which has 9,000 employees in China.

As a result, companies across the board are feeling the squeeze. Last year turnover at multinationals in China averaged 14%, up from 11.3% in 2004 and 8.3% in 2001. Salaries jumped by 8.4%, according to human resources consultant Hewitt Associates LLC. And a January report by the American Chamber of Commerce in China found that rising labor costs have pinched margins at 48% of U.S. manufacturers on the mainland. "China runs the risk of losing its advantage" of cheap labor, says Teresa Woodland, an author of the report.

That means managers can no longer simply provide eight-to-a-room dorms and expect laborers to toil 12 hours a day, seven days a week. When 30-year-old He Maofang first arrived in Dongguan in 2000, for instance, "work was hard to find." But now "there are plenty of choices," says He, who started at Yongjin last June. In addition to boosting salaries, Yongjin has upgraded its dormitories and improved the food in the company cafeteria. Despite those efforts, its five factories remain about 10% shy of the 6,000 employees they need.

Many companies are compensating for the shortages by penetrating deeper into China's vast heartland, where wages can be half what they are on the coast. General Motors (GM ), Honda (HMC ), Motorola, and Intel (INTC ), for instance, have all shifted some manufacturing or research to inland locations in recent years, both to tap lower costs and to open up new markets. But a two-year-old effort by the Chinese government to lift rural incomes through tax cuts is keeping some potential factory workers on the farm. So with investment growing in the interior, labor shortages are popping up there, too. "More and more multinationals are looking for opportunities in second-tier cities," boosting salaries there faster than in the traditional manufacturing strongholds farther east, says Jean Lin, head of the compensation practice at Hewitt.

248 BETTER TRAINING The trend goes beyond the factory. Only about 10% of Chinese candidates for jobs in key areas such as finance, accounting, and engineering are qualified to work for a foreign company, estimates consultant McKinsey & Co. While China today has fewer than 5,000 managers with the skills needed by multinationals, 75,000 jobs for such managers are expected to be created over the next five years, McKinsey says. The talent crunch "is the No. 1 constraint on China's growth," says Andrew Grant, McKinsey's China chief. "It will hit earlier and be more powerful than any [other] constraint," such as raw materials shortages. Some U.S. companies in China believe better education and training is the way to stay ahead of the game. Motorola regularly hires graduates straight from school and then trains them at its "Motorola University" in Beijing. Intel Corp., which has invested $1.3 billion in chip assembly, testing, and research and development in China, has backed initiatives that have trained 600,000 teachers there. "It helps contribute to our future workforce," says Intel China President Wee Theng Tan. LOWER ENERGY BILLS Others are doing everything they can to retain employees. St. Louis-based Emerson has introduced flexible work hours at its Suzhou plant for workers with children. It has built a "green" office with solar power, ambitious recycling plans, and chargers for the electric bicycles used by many staffers. And to build loyalty the company holds quarterly parties for the entire staff and organizes free trips to resort areas. "I chose Emerson because it is a well- respected company," says 25-year-old Rocky Lu, who started as a technician at Emerson's Suzhou plant in February. He got a 50% raise from his last job, at a state enterprise, to nearly $400 a month. Emerson is cutting costs elsewhere to ensure that rising wages don't price it out of Suzhou. It has lowered utility bills by raising the thermostat a couple of degrees in the summer and dropping the mercury in the winter while passing out long underwear to keep workers warm. It has added reflective light fixtures that can use lower-wattage bulbs. And it has recently tapped excess heat from its factory to warm dormitory showers. "So far it's an even trade-off" between rising labor costs and efficiency gains, says Emerson manager Warth. "We have to deal with it if we want to remain in business." Beijing realizes that it, too, needs to deal with the issue if it wants to stay in business. So the government is further loosening rules that prevent rural residents from moving to cities to work and is offering tax breaks to overseas Chinese who return to the mainland. The higher education system is also being overhauled to include more practical classes and vocational training in a bid to expand China's skilled workforce by a third, to 8% of the population. China will still be the world's workshop. But the world will need to adjust to the inexorable rise of the workshop's wages. http://www.businessweek.com/magazine/content/06_13/b3977049.htm

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Op-eds3 Obama Trade Initiatives Are a Good Start by C. Fred Bergsten, Peterson Institute for International Economics Op-ed in the Hill March 22, 2010 © The Hill

The Obama administration has now unveiled its first positive trade policy initiatives. One seeks to negotiate a Trans-Pacific Partnership between the United States and key Asian countries. The second aims to double US exports over the next five years. Obama trade policy had previously been deterred by the strong backlash against globalization and especially the divisions within the Democratic Party over "lost jobs" and "runaway plants." Careful studies at our Peterson Institute for International Economics show that the trade globalization of the past 60 years has indeed generated adjustment costs of about $50 billion per year in the United States. This cost is swamped by net gains of over $1 trillion per year to the economy from that globalization, but it underlines that new trade efforts must contribute to US job creation and minimize adverse effects on workers and others.

It would be sheer folly for the United States to remain on the sidelines while the world’s other major traders increasingly discriminate against us. The two Obama initiatives clearly meet those tests. The export effort is obvious: Every $1 billion of foreign sales creates 6,000 to 10,000 high-paying jobs. There are two highly cost- effective methods to expand US exports, neither of which has any budgetary cost and are thus much more attractive than further fiscal stimulus initiatives. The most important by far is to make sure that the exchange rate of the dollar is not overvalued in terms of underlying US competitiveness. Every 1 percent fall in the dollar improves the US trade balance by $20 billion to $25 billion, generating 100,000 to 250,000 jobs. This means assuring the speediest possible rise in the currencies of China and several of its immediate neighbors, which are now undervalued by 25 to 40 percent. This correction alone would cut the US trade deficit by more than $100 billion and create up to 1 million new jobs. Another attractive option is to sharply reduce our own export controls, as the president has begun to do. These measures seek to protect US national security but instead undermine it by boosting our foreign debt and weakening our economy. They largely ignore the ready foreign availability of many products that we continue to restrain, the folly of restricting sales unilaterally in the absence of an effective multilateral regime, and the need to permit trusted countries and foreign nationals to access our products and processes. Without jeopardizing national security, we could readily expand exports by $30 billion to $50 billion annually (and

250 thus create another 200,000 to 500,000 jobs) by substantially liberalizing the export control regime. President Obama's other positive trade initiative, negotiation of a Trans-Pacific Partnership, will protect the United States from increasing foreign discrimination against US exports as Asian countries conclude preferential trade agreements among each other and with the European Union. Pacts are already in place among the 10 countries of Southeast Asia and the three trade powerhouses of Northeast Asia (China, Japan, and Korea). These deals will eventually produce an East Asian free trade that deters at least $25 billion of US exports and compels American firms to service their Asian markets from their Asian—rather than American—factories. The growing links between this Asian bloc and the existing European bloc, via trade deals already being worked out by the European Union with Korea and India, will increase their adverse effects on the United States. The creation of an Asian economic bloc, inevitably dominated by China, could also carry important negative implications for US foreign policy and even national security. It would be sheer folly for the United States to remain on the sidelines while the world's other major traders increasingly discriminate against us. Obama thus seeks to reduce barriers with an initial group of Asia Pacific countries (Vietnam, Singapore, Brunei, Australia, New Zealand), along with two Latin American countries (Chile and Peru), and should make every effort to engage additional important Asians (most promisingly Malaysia, Japan, and Korea) as soon as possible. The administration should complement its two positive initiatives with a third: submission to Congress of the free trade agreements with Korea, Colombia, and Panama (in that order of importance) that were negotiated by the Bush administration. The same overriding consideration applies here as with the Trans-Pacific Partnership: The partner countries are concluding preferential compacts with our chief competitors, including Canada in these cases, that will destroy US jobs unless we implement similar deals. The arguments against all three are bogus: American auto companies will export very few cars to Korea whatever changes could be negotiated in that country's policies, murders of trade unionists in Colombia are reprehensible but have nothing to do with the trade agreement, and Panama's tax policies are likewise unrelated to trade barriers. These agreements represent low-hanging fruit that the administration and Congress should seize to round out a trifecta of trade policies that will create good US jobs and strengthen our economy when we need it most. http://www.piie.com/publications/opeds/print.cfm?researchid=1520&doc=pub

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Op-eds3 How Best to Boost US Exports by C. Fred Bergsten, Peterson Institute for International Economics Op-ed in the Washington Post February 3, 2010 © Washington Post President Obama has smartly suggested that a new export strategy could support 2 million very good American jobs, more than created by his stimulus initiative. The United States already sells about $1.5 trillion worth of goods and services annually to the rest of the world, which creates about 10 million high-paying jobs. Every $1 billion of additional exports will produce about 7,000 very good jobs. Robust export expansion would also reduce our large trade deficits and resultant need to borrow abroad to finance them. Last week the president suggested an ambitious but realistic goal of doubling exports over the next five years. An effective US export strategy must focus on four variables: the exchange rate of the dollar, trade agreements, our own export controls, and tax policy. An effective US export strategy must focus on four variables: the exchange rate of the dollar, trade agreements, our own export controls, and tax policy. First, the exchange rate. This is the most important factor in determining US export competitiveness. Every increase of 1 percent in the dollar, averaged against other major currencies, reduces our exports by about $20 billion annually and destroys about 150,000 jobs. The recurrent overvaluations of the past 30 years, when the dollar became overpriced by 30 to 40 percent, contributed significantly to the decline in manufacturing jobs and was the major cause of the huge current account deficits of most of that period. The policy goal should be a competitive exchange rate that produces a sustainable trade balance, rather than a "strong dollar." This would help both sides of the trade account, strengthening the ability of US firms and workers to compete with imports as well as to export. Fortunately, the decline of the dollar since 2002 has virtually restored equilibrium in its value against most other industrial countries' currencies. We do not want an undervalued rate, but it will be essential to avoid any renewed general rise of the dollar. The remaining large misalignment is the undervaluation of at least 25 percent of China's renminbi and the currencies of several important economies surrounding it (Hong Kong, Malaysia, Singapore, Taiwan). Correction of all the Asian undervaluations would cut the global US deficit by about $100 billion and generate at least 700,000 jobs. If China continues to block any rise of the renminbi, the administration should label it a currency manipulator and escalate pressure, including by taking China to the World Trade Organization. Second, trade agreements. Such agreements increase US imports, but virtually all of them substantially favor the United States in job terms because the partner countries maintain much higher trade barriers than we do. The most obvious cases are the pending free trade agreements with Colombia and Panama, whose sales to the United States are already virtually free of duties but whose own tariffs limit our sales to them. Implementation of the Colombia

252 agreement and the pending pact with Korea would save about 300,000 US jobs, one recent study concluded. The administration should propose that Congress promptly pass all three agreements as part of its new jobs program. More broadly, major countries are busily signing trade agreements that exclude the United States. East Asia's large and rapidly growing countries are creating a regional bloc that will discriminate against our exports and will increasingly force US companies to source their Asian sales from their Asian plants rather than from factories here. The European Union is working out preferential deals with Asian powerhouses, including India and South Korea. Obama has entered into negotiations for a Trans-Pacific Partnership with seven Asia Pacific nations, a group that could shortly expand to include a critical mass of countries in that region and eventually evolve into the Free Trade Area of the Asia Pacific that President George W. Bush proposed in 2006. The administration should aim to conclude these talks when the United States hosts the annual summit of the Asia-Pacific Economic Cooperation forum in 2011. Third, address the disincentives to US exports embodied in our own regulations. Export controls maintained for alleged national security and foreign policy purposes were choking off $25 billion to $40 billion of annual US sales in the early 1990s and might be more substantial today. These restrictions are under review and, consistent with legitimate security concerns, their substantial liberalization should be part of Obama's initiative. Fourth, tax policy. At a minimum, the administration should abandon its plan to increase taxes on the overseas activities of US firms because their foreign investments clearly increase US exports. Several modest tax reforms could enhance our international competitiveness, including to attract direct investment here by foreign companies that would then access many of their global markets from the United States and create jobs here. The administration and Congress must avoid hurting US competitiveness when they inevitably move to raise tax revenue substantially over the next few years to help curb the budget deficit. Increases in corporate income tax rates would jeopardize exports by raising US production costs. By contrast, a value-added tax or national retail sales tax, or better yet a gasoline or carbon tax, could be fully rebated at the border on exports (and imposed at the border on imports) and thus avoid such harm. Positive export and job expansion would be fostered by replacing some or all of our current income tax system with these alternative devices. http://www.piie.com/publications/opeds/print.cfm?researchid=1481&doc=pub

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Research-based policy analysis and commentary from leading economists International trade, offshoring, and US wages Avraham Ebenstein Ann Harrison Margaret McMillan Shannon Phillips 31 August 2009 This column revisits the heated debate over international trade, offshoring, and US wages using new data. It says that increased international exchange with low-income countries has depressed US wages. That effect only arose during the 1990s, suggesting a different conclusion about trade, offshoring, and income inequality than the previous round of debate. Over the last two decades, the US economy experienced a boom in offshoring and a doubling of imports of manufactured goods from low-wage countries. Over this same period, roughly 6 million jobs were lost in manufacturing and income inequality increased sharply. These parallel developments led many critics of globalisation to conclude that “good” manufacturing jobs were being shipped overseas at the expense of the domestic labour force, putting downward pressure on wages of American workers. Concern over these developments led the US Congress to pass the American Jobs Creation Act of 2004. Yet whether these changes in the US labour market are a result of rising import competition or relocation by multinationals to other countries (known as “offshoring”) is not clear. In a recent study prepared for the Brookings Institution, Paul Krugman (2008) claims that we will never know. He asks “How can we quantify the actual effect of rising trade on wages?”, and then answers: “The answer, given the current state of the data, is that we can’t.” Yet Krugman suspects that the dramatic increase in manufactured imports from developing countries since the early 1990s has contributed to increasing income inequality. Earlier studies explained rising inequality as a result of technological change which favours skilled workers, a falling minimum wage, or weaker unions (Autor, Katz and Kearney 2008). Larry Katz and David Autor agree with Krugman, arguing that international trade and offshoring will be increasingly important drivers of wages in the future. They predict that this will be due rapid growth in competition from developing countries (where wages are low) and dramatic reductions in the cost of computer and communications technology. Trends in employment, wages, offshoring, and trade In recent research (Ebenstein, Harrison, McMillan and Phillips 2009), my coauthors and I use new data to confirm that globalisation forces have had a bigger impact on US wages than previously believed. We show that while some US workers have been adversely affected by global competition, others have benefited from these changes. We combine data on individual workers with information on international trade and offshoring to measure globalisation’s impact on US wages and employment. We begin by showing that over the last twenty years, employment in US manufacturing has declined, wage inequality has increased, and the role of international trade has grown. Figure 1 shows the sharp fall in US manufacturing employment between 1979 and 2002. Total manufacturing employment fell from 22 to 17 million during the sample period,

254 with rapid declines at the beginning of the 1980s and in recent years. However, the effects were uneven across different types of workers. For workers without a college degree, there were significant declines in manufacturing employment over the entire period. The opposite was true for workers with a college degree. Within manufacturing, the labour force has become increasingly well educated, as college graduates replaces workers with high school degrees. Figure 1. US manufacturing employment by education level, 1979-2002

Note: Author’s calculations based on the Current Population Survey’s Outgoing Rotation Group, 1979-2002. Figure 2 shows the trends in hourly real wages. While wages fell for the least educated workers, they increased for workers with at least some years of college. The biggest wage gains were for manufacturing workers with an advanced degree. The decline in wages for high school dropouts and the steep wage increases at the upper end of the income distribution indicate a sharp increase in wage inequality. Figure 2. US manufacturing real wages by education level, 1979-2002

Note: Author’s calculations based on the Current Population Survey’s Outgoing Rotation Group, 1979-2002. Earnings weights, equal to the product of CPS sampling weights and hours worked in the prior week, are used in all calculations. Hourly wages are the logarithm of reported hourly earnings for those paid by the hour and the logarithm of usual weekly earnings divided by usual weekly hours. Overtime, tips, and commissions are included in wages, and top-coded wages are imputed by assuming a log-normal

255 distribution for weekly earnings as described by Schmitt (2003). The calculated nominal hourly wage is converted to a real wage using the 2006 CPI and then trimmed to values between $1-100 per hour. We then ask whether falling manufacturing employment and rising wage inequality are related to trends in offshoring activities and international trade. One measure of the increase in offshoring activities for US companies is the number of workers employed “offshore” by US multinationals (firms which account for most of US manufacturing employment). Figure 3 shows that the number of workers employed by US multinationals in low-income countries nearly doubled over the last 25 years, while such employment in high-income countries remained roughly constant. One implication is that any employment costs at home of offshoring activities abroad are likely to be concentrated in low-income countries (a result our research confirms). Figure 3. Domestic and foreign employment US-based multinationals

Note: Author’s calculations based on the most comprehensive data available from firm- level surveys of US direct investment abroad, collected each year by the Bureau of Economic Analysis. We compute number of employees hired abroad by counter by year and aggregate them by World Bank country income classifications. Figure 4 presents a visual summary of increasing international trade for US manufacturing during the sample period. The solid line in Figure 4 plots the ratio of imports to imports plus shipments over time and the dashed line plots the ratio of imports from developing countries to imports plus shipments. Unlike offshoring, the trends in import penetration were already evident throughout the 1980s. Both imports from developed and developing countries increased steadily between 1982 and 2002, with the most dramatic increase occurring for developing countries. Figure 4. Import penetration

256 Note: Data from Bernard, Jensen, and Schott. (2006). We aggregated industry-level data using employment weights calculated from the Current Population Survey’s Outgoing Rotation Group, 1979-2002. Statistical tests for employment impacts of trade and offshoring Next, we statistically test whether trade and offshoring has forced workers out of the manufacturing sector. We find that there has been a big movement of workers out of sectors with a lot of import competition. We also look for the impact of offshoring on US manufacturing employment, finding small effects on employment that depend on the location of offshore activities. A 10 percentage point increase in offshoring to low-wage countries reduces employment in manufacturing by 0.2% while offshoring to high-wage countries increases employment in manufacturing by 0.8%. The beneficial effect of offshoring activities in high-income countries by US firms on their home employment is one of the most surprising findings of the study. The surprising positive effect of offshoring to high income countries on US wages is consistent with some new theories developed by Gene Grossman and Esteban Rossi-Hansberg (2008). They argue that offshoring activities can actually increase wages for workers remaining at home by cutting costs for the companies that employ them. Did the negative effects of international trade and offshoring activities on US wages increase in the 1990s relative to earlier decades? We find that they did, and that the negative impact of offshoring to low-wage countries on both US wages and employment only became important in the 1990s. The wages of older workers appear to have been disproportionately hurt by offshoring activities. Statistical tests for wage effects of trade and offshoring We then test for the impact of competition from international trade and offshoring activities on US manufacturing wages. Because the US labour market is very flexible, we argue that most workers can easily move across different industries. Our results show that there is a lot of movement of workers across different industries in response to competition from imports. This means that there is no visible impact of import competition on wages within highly affected industries since those workers may relocate to another industry. However, it is much more difficult to switch occupations. Consequently, we introduce the concept of an occupation-specific measure of offshoring, import competition, and export activity. Table 1 shows that some occupations experienced enormous increases in exposure to international trade during the sample period. These included shoe machine operators, for whom occupation-specific import penetration increased from 37% in 1983 to 77% in 2002. Table 2 shows those occupations where export activity increased the most. However, many individuals were in occupations where there was no exposure at all. These occupations included teachers, therapists, sales workers, judges, dancers, and many others. Table 1. Exposure to international trade across selected occupations

1983 2002 Tool and die makers 0.097 0.189 Patternmakers, lay-out workers, and cutters 0.092 0.19 Miscellaneous textile machine operators 0071 0192

257 Miscellaneous precision woodworkers 0.061 0.195 Lathe and turning machine set-up operators 0.109 0.197 Precision assemblers, metal 0.084 0.201 Assemblers 0.1 0.203 Tool and die maker apprentices 0.104 0.204 Knitting, looping, taping, and weaving machine operators 0.046 0.205 Production testers 0.072 0.206 Numerical control machine operators 0.103 0.207 Solderers and brazers 0.094 0.218 Electrical and electronic equipment assemblers 0.09 0.219 Textile cutting machine operators 0.085 0.226 Textile sewing machine operators 0.136 0.304 Shoe repairers 0.182 0.379 Shoe machine operators 0.372 0.774 Table 2. Sectors with large increases in export shares 1983 2002 Assemblers 0.091 0.171 Miscellaneous textile machine operators 0.033 0.171 Winding and twisting machine operators 0.037 0.174 Metal plating machine operators 0.084 0.176 Patternmakers and model makers, metal 0.107 0.177 Lathe and turning machine set-up operators 0.089 0.178 Drilling and boring machine operators 0.112 0.184 Tool programmers, numerical control 0.116 0.185 Lathe and turning machine operators 0.112 0.188 Miscellaneous precision workers 0.118 0.191 Tool and die makers 0.097 0.191 Mechanical engineering technicians 0.126 0.193 Production testers 0.108 0.2 Aerospace Engineers 0.18 0.219 Milling and planing machine operators 0.132 0.219 Precision assemblers, metal 0.152 0.223 Knitting, looping, taping, and weaving machine operators 0.027 0.224 Solderers and brazers 0.105 0.225 Numerical control machine operators 0.116 0.23 Tool and die maker apprentices 0.113 0.232 Electrical and electronic equipment assemblers 0.113 0.241 Shoe machine operators 0.023 0.261

258 What we find is that a one percentage point increase in occupation-specific import competition is associated with a 0.25 percentage point decline in real wages. While some occupations have experienced no increase in import competition (such as teachers), import competition in some occupations (such as shoe manufacturing) have increased by as much as 40 percentage points. The contrasting experiences of workers in textiles and apparel-related sectors compared to many service sector employees such as teachers helps to explain why some parts of the US economy have been deeply affected by globalisation while others have not. We also examine the impact of increased offshoring by US multinational firms on wages of workers in the US. We find that when US companies increase their offshoring activities to low-income countries, this hurts US wages, but that more offshoring to high-income countries is associated with an increase in US wages. Policy implications There are several policy implications of this research. • Policies designed to help displaced workers should be targeted at occupations, not industries. Since the research shows that some types of workers, such as those who work in shoe manufacturing, have been disproportionately hurt while other types of workers (such as teachers) have been unaffected, trade adjustment assistance needs to be appropriately targeted. • Policies (such as those proposed by the Obama administration) designed to curb the negative effects of offshoring on US jobs need to distinguish between offshoring to rich and poor countries. Since the negative effects are restricted to lowincome destinations, any policies which discourage offshoring in high-income regions (such as Ireland or France) will have the unintended effect of hurting the very workers they are designed to protect. References Autor, David H., Lawrence F. Katz and Melissa S. Kearney (2008), “Trends in US Wage Inequality: Revising the Revisionists”, Review of Economics and Statistics 90 (May), 300-23. Bernard, Andrew, J. Bradford Jensen and Peter Schott (2006), “Survival of the Best Fit: Exposure to Low-wage Countries and the (uneven) growth of U.S. Manufacturing”, Journal of International Economics 68:219-237. Ebeinstein, Avraham, Ann Harrison, Margaret McMillan and Shannon Phillips (2009), “Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys”, NBER Working Paper 15107, June. Feenstra, Robert (2008), “Ohlin Lectures”, manuscript. Grossman, Gene M. and Esteban Rossi-Hansberg (2008) “Trading Tasks: A Simple Theory of Offshoring”, forthcoming American Economic Review. Krugman, Paul (2008), “Trade and Wages, Reconsidered”, draft for Brookings Papers on Economic Activity, February. Schmitt, John (2003). “Creating a consistent hourly wage series from the Current Population Survey's Outgoing Rotation Group, 1979-2002”.

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259 What are the college grads manufacturing? On August 31st, 2009 Roger.Chittum says: I'm a retired textile company executive, and this all fits with my observations except that I don't see where manufacturing jobs for 1 million college graduates and 1 million more with some college have been created. Clearly, the dot-com boom starting in 1995 shows up, but my impression is they were not traditional manufacturing jobs. Perhaps they were designing and developing new products in a company that was classified as a "manufacturer?" Did your study tell you anything about that? Also, I wonder whether before the dot-com boom the jobs college graduates and some- college workers gained really required post-secondary education or whether there was just a surplus of these workers winning the competitions for new "manufacturing" jobs. One reason to think that is that your charts show the real wages of the workers with college and some college did not advance much during that time. Did your study provide any basis for comment on whether we may have had an "over-educated workforce?"

Avraham Ebenstein Member of the Hebrew University Department of Economics Ann Harrison Professor of Agricultural and Resource Economics at the University of California, Berkeley Margaret McMillan Associate Professor of Economics, Tufts University Shannon Phillips PhD candidate in economics, Boston College http://www.voxeu.org/index.php?q=node/3920

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Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality? Policy Analyses in International Economics 85 Robert Z. Lawrence • January 2008 • 144 pp. ISBN 978-0-88132-414-3 • $19.95 Over the past quarter century, output per worker in the US economy has increased significantly, yet the typical worker has seen only a modest increase in take-home pay while the richest Americans have done exceedingly well. Many link these developments to the expansion of US trade, particularly with developing countries such as India and China. Public opinion polls indicate that there is widespread anxiety about trade among American workers, and politicians are thus expressing increasing skepticism about globalization. But is trade really to blame? In this study, Lawrence explores the links between slow US real wage growth, increased earnings inequality, and trade and concludes that the latter has played only a minor role in growing income inequality and labor-market displacement in the United States. He first deconstructs the reported gap between real blue-collar wages and labor productivity growth over the past quarter century and estimates how much of the gap is due to measurement issues and how much higher these wages might have been had the distribution of income been kept constant. He demonstrates that about 60 percent of that gap reflects measurement issues, in particular, the use of different price deflators for output and real wages and the omission of benefits in take-home pay. He also finds that an additional 10 percent can be ascribed to the relatively rapid acquisition of skills by white-collar workers. However, he concludes that three types of increased inequality do account for about 30 percent of the gap: conventional wage inequality, which reflects an increase in the returns to skills; super rich inequality, which reflects the dramatic increase in wages of the richest Americans; and class inequality, which reflects the rising share of corporate profits in income. Lawrence considers what role trade is likely to have played for each type of inequality. While increased trade with developing countries may have played some part in causing greater inequality in the 1980s, over the past decade the impact of such trade on inequality has been too small to show up in the wage data. To be sure, since 1990, powerful globalization forces have been operating that might have been expected to increase wage inequality. Not only have imports from developing countries increased dramatically but the relative prices of manufactured goods from these countries have declined steadily. Yet the big surprise is that wages of the least-skilled Americans—the lowest 10 percent—have kept pace with the median and, since 1999, while real wage growth in general has been sluggish, most US relative wage and compensation measures indicate little evidence of increased inequality. This is true whether workers are distinguished by skill, education, unionization, occupation, or major sectors. Lawrence points out that some of the goods that the United States imports, even from developing countries, are quite sophisticated and produced in the United States through skill- intensive and automated methods. Though it may cause displacement and could put downward pressure on wages generally, this import competition does not increase wage

261 inequality. A more benign view is that a significant amount of what America imports today is no longer produced domestically. Thus declining import prices simply yield consumer benefits but do not exert downward pressure on US wages nor cause dislocation of US workers. The recent increase in US inequality, therefore, has little to do with global forces that might especially affect unskilled workers—namely, immigration and expanded trade with developing countries. Instead, the sources of increased inequality have been the increased share of profits in income, much of which could be cyclical, and the rising share of the super rich—a development in which trade is likely to have played only a small role. Since 2000, labor’s income share has fallen as wage increases have failed to match productivity growth almost across the entire spectrum of education levels. This decline could, in principle, be the result of increased trade pressures such as offshoring, which raises profits and reduces wages in part through affecting labor’s bargaining power. But there are reasons to be skeptical. First, the low labor income share in 2006 was actually similar to that in 1997, suggesting a strong cyclical component in recent performance. Second, while it is plausible that labor’s bargaining power and labor rents could be reduced by the ability to offshore, there was no such decline in labor share over either the 1980s or 1990s. Third, if offshoring to developing countries were the major driver of labor’s depressed share, the fall would be especially apparent in tradable goods, but recent profit growth has not been especially concentrated in manufacturing. Indeed, it has been concentrated in financial corporations. In fact, between 2000 and 2005, the share of compensation in manufacturing (or traded goods) did not decline more rapidly than in the rest of private industry, and manufacturing compensation has actually increased relatively more rapidly than compensation in general. Similarly, offshoring of services, for example, to India, has actually been much smaller than public headlines suggest and too small to account for the pervasive slow real wage growth since 2000. Trade also does not appear to be a disproportionately important driver of the growing share of income earned by the super rich. To be sure, globalization has played some role in increasing the size of relevant markets and thus incomes of CEOs, sports stars, entertainers, and software producers. But remarkably, the share of total US profits earned abroad by US multinationals has remained fairly constant. Far more important sources of this inequality are technological changes, institutional developments such as financial deregulation, modifications in US corporate governance practices, and rising asset markets, most of which have domestic origins. The study does not dispute the importance of growing US inequality and the need for policies to deal with it. But Lawrence provides compelling evidence that those seeking to give trade a prominent role in the explanation are looking in the wrong place. The minor role of trade suggests that any policy that focuses narrowly on trade to deal with wage inequality and job loss is likely to be ineffective. Instead, policymakers should (a) use the tax system to improve income distribution and (b) implement adjustment policies to deal more generally with worker and community dislocation. To preview the book, visit http://bookstore.petersoninstitute.org/book-store/4143.html. To learn more about Robert Z Lawrence, visit: http://www.petersoninstitute.org/publications/author_bio.cfm?author_id=133. http://www.piie.com/publications/briefs/lawrence4143.pdf

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