2012/11/15

21. Economist Carmen Guisan in New York Times. Room for Debate: Austerity Policies are not working in Europe, 12th November of 2012.

 
 An interesting debate about Euro and EU economic policies appears at the NY Times Foro "Room for Debate".
Contributions by





Aristides N. Hatzis, University of Athens
John Cotter, University College Dublin
Veronique de Rugy, George Mason University
 
 Contribution by Maria-Carmen Guisan to NY Times Foro 2012:
 

 



Austerity Measures Are Not Working

Loans from countries with a trade surplus, like Germany, to countries with trade deficits, like Spain, are necessary to keep the E.U. functioning.
 
E.U. policies should address increasing development throughout the entire E.U. instead of pushing excessive austerity, which only results in stagnation and recession. The E.U. should foster industrial development particularly in countries with low levels of industrial value-added per capita, and avoid the industrial stagnation that the E.U. has experienced over the last seven years (2005-2012). Such policies would improve the quality of life in every country and increase German sales.
 
LINKS TO Maria-Carmen Guisan contributions to OTHER INTERESTING DEBATES ON EUROPEAN ECONOMY
 
Year 2012: Friends of Europe.





The Future of Europe - European Policy Summit, Roundtable  11/10/2012

 
 There was also direct input from Europe's citizens through Debating Europe, our online platform that enables citizens to talk directly to decisionmakers. Please find below questions from EU citizens that were put to the roundtable during the debates.

Session I - Questions from Christos and Remi via Debating Europe:
Session I - Questions from Lluis and Rui via Debating Europe:
 
 
 
Session II - Questions from Maria Carmen and Pedro via Debating Europe:
Session III - Questions from Karsten and Martin via Debating Europe:
Video of Maria-Carmen Guisan in the Debate of FRIENDS OF EUROPE



Also at: http://vimeo.com/51444369

Year 2013: Maria Carmen Guisan about Chipre: Voice of Galicia/Voz de Galicia 22nd March of 2013. Article in Spanish at the journal Website
Article in English here:
Europe must solve the Cyprus problem without taxing bank deposits
It is not good news that the European Union, with the banking crisis in a small country like Cyprus, revealed an overreaction of immediate discipline that induces fear for the confiscation of part of bank deposits in the country, since apart from the damage to Cyprus citizens therefore causes concern in other countries may fear similar measures.
The alarmist language (rescue, insolvency, sequestration, etc.) With which EU currently deal with the financial problems of the European Union, is absurd and exaggerated. Much of the EU countries, including Cyprus and Spain which have a very similar per capita production, are well above world average income and therefore have a reasonable ability to deal with their problems without resorting to such language or excessive austerity measures. Almost 5 billion people in the world have a per capita income that is less than 1/3 of which are Cyprus and Spain, and do not reach the 1 billion those developed countries with  an income per capita above these two countries, therefore adopt standard measures that can solve the problems effectively and without twitching.
Retrieves the confidence of depositors in savings banks is very important to overcome this economic crisis, so taxing savings is a totally undesirable measure that generate uncertainty about the integrity of bank deposits.
Solving the problem of Cyprus banking, which accounts for less than 0.2 per cent of the European economy, does not seem to be a task too complicated, so the EU bodies should be able to adopt normal measures, postponed reasonable periods, without aggressive interventions which generate fears for citizens. If the cause of the banking problems of Cyprus comes from its exposure to Greek bonds devalued, it is clear that is not the fault of its citizens but of poor design of European regulations concerning the safety of bonds of its member countries.

The costs of resolving a problem of insufficient financial capacity must be allocated appropriately, and in reasonable time, among the actors that have generated this lack of capacity. The part that has to be assumed by all the citizens of a country should be integrated into the general tax policy principles of equity and  moderation, and not applied in an arbitrary and unfair way to savings depositors.
The dream of a united Europe to cooperate amicably for the economic development of their countries appears, every day, more broken. It seems advisable that the policies of the European Union should be more prudent and effective measures to overcome the crisis, instead of causing concern and distrust of citizens.
Source: Maria-Carmen Guisan. Professor of Economics. Voz de Galicia 22nd March 2013.

 
Other selected articles on criticisms to EU excessive austerity policies:

The Guardian:

Europe's austerity: big worries, small thinking

Plan A is now acknowledged to be a failure; yet it remains the default option, just extended far into the future


http://www.guardian.co.uk/commentisfree/2013/may/29/europes-austerity-big-worries-editorial

NY times Paul Krugman on 15h April of 2012:

Europe’s Economic Suicide


 


 

2012/08/21

20. Industrial Production and economic crisis in the European Union, year 2012

    Note: Blog of the Euro-American Association of Economic Development Studies

Graph of IPI in EU15 2012: This graph shows the variation of IPI (Industrial Production Index) of 15 European Union countries (EU15) during the period 2005-2012. The country codes are as follows: Belgium (Be), Denmark (dk), Germany (Dk), Ireland (Ie), Greece (Gr), Spain (Es), France (Fr), Italy (It), Luxembourg (Lu), Netherlands (Nl), Austria (At), Portugal (Pt), Finland (Fi), Sweden (Se), United Kingdom (Uk).
We notice that in 9 countries there has been a decrease of IPI (in 6 cases between 10% and 20%, and a lower decrease in the other 3 cases), while in only 6 cases there has been an increase (in 3 cases between 10% and 20%, with the remaining 3 countries with lower increase).
Austria has been the country with the highest increase and Greece the country with the higher decrease.
In EU27 IPI stays around 99% in the first semester of 2012 in comparison with the value of 100 in the base year 2005, what means a clear stagnation of industrial production.
Failure of EU industrial policy: In general we notice a failure of EU industrial policy, with a lack of support to industrial development that is in the center of the economic crisis of many European countries.

2012/04/02

19. Economic Development, Industry and Production by Sector in American Countries, 1980-2010


Production by sector in American Countries: 1980-2010

Economic development and real production per capita, and by sector, for the period 1980-1999 in American countries is analysed in two articles by M.C. Guisan and E.Aguayo, free downloadable at the journal Website:
Those articles published in the journal Applied Econometrics and International Development show an estimated average annual increase of real Value-Added per head of 1.20%.

Regarding the period 2000-2010 the average annual increase has been lower, around 0.69%, in a set of 22 American countries.

Regarding production by sector, with data calculated from World Bank Indicators, we find the following diferences, between both periods of time,  in rates of annual increase of real Value-added per head, in a set of 22 American countries:

Agriculture: a light increase, from 0.80% for 1980-1999 to 0.96% for 2000-2010
 Industry and Building: a decrease, from 1.62% for 1980-1999 to -0.71 for 2000-2010
 Services: a light increase, from 1.07% for 1980-1999 to 1.11% for 2000-2010
Total: a decrease, from 1.20% for 1980-1999 to 0.69% for 2000-2010

Importanc of Industry and its effects on Services: We  emphasize that the positive evolution of Services depends, at a great extent, on the positive evolution of industry. Industrial stagnation or decline leads to limitations in the capacity of expansion of services, and to generate negative effects due to strong external trade deficits.

    Although some countries have experienced a positive evolution of industrial production per head, the average of 22 American countries has decreased. Industrial development should be improved in American countries given its positive direct and indirect effects on economic development. 

   Regarding industrail development, among 22 American countries in year 2010. we find, in Dollars at 2000 prices and exchange rates:

1)  First group: the highest values of industrial value-added per head in Industry correspond to the USA, Canada, Trinidad and Tobago, with more than 6000 Dollars of year 2000 per capita.
2) A second group, within 2000 and 3000 Dollars of year 2000 per capita, includes: Argentina, Uruguay and Venezuela.
3) A third group within 1000 and 2000 Dollars  of year 2000 per capita consiste of: Brazil, Chile, Costa Rica and México
4) Between 500 and 1000 Dollars of year 2000 per head: Colombia, Dominican Republic, Ecuador, El Salvador, Jamaica, Panama and Peru.
5) Below 500 Dollars of year 2000 per capita: Bolivia, Guatemala, Honduras, Nicaragua and Paraguay.

This set of 22 countries consists of all American countries with more than one million population in year 2010, but two countries without available data for sectoral value-added at the source of data (World Development Indicators of World Bank on line on 3rd April of 2012).

In the cases of Cuba and Haiti, without available data at the WDI search on 3rd April 2012, we find that, accordingly to other sources, Cuba would be included in the third group, with around 1038 Dollars of industrial real value-added per capita, and Haiti would be included in group 5, below 500 Dollars per capita.