EC country-specific recommendations Post author By Seamus Coffey Post date May 29, 2013 All the documents for each country can be accessed from here and the general statement from the Commission (“Moving Europe Beyond The Crisis”) is here. Categories In Uncategorized 52 Comments on EC country-specific recommendations ← Why do sovereigns default and why don’t they default more often? → Social Consequences of Austerity Livestream 52 replies on “EC country-specific recommendations” Extend and pretend? “Moving Europe Beyond The Crisis” sounds like what they did with Poland after ww2 IMF data suggests that Irish GDP could grow by 2.2% in 2014. This is superior to the UK, as is the case with a number of other economic fundamentals. Are we being too negative about the situation Ireland is in, and as such excacerbating the situation? @AC Are we being too negative about the situation Ireland is in, There was an accident on the M8 near Cahir and the traffic was diverted onto the old N8. Several people commented that the traffic coming through Kilbehenny was as heavy as pre 2008 bust. Another has commented to me that tail-backs at his first traffic lights are now longer than they used to be. We badly need data on the real economy without the MNC laundering. Depending on anecdotal tales of traffic volume is clutching at straws. @COB Do you trust the IMFs forecasts? Aggregate Irish GDP data is cat_malojohn*! *malojohn from melodion … can be played anyolwaywhichcan. @AC “Do you trust the IMFs forecasts?” A forecast that does not strip out the MNC froth may still be accurate for that economy, but it cannot be accurate for the real economy. In the absence of trustworthy figures on the real economy one is resigned to depending on one’s own observations. Low value, granted, but more valuable than precise measurements of froth. There is a 500 hundred pound gorilla scratching his balls in the corner..stress testicles it’s know as. Jay…sus Jim rewriting history huh! http://www.irishexaminer.com/business/stress-tests-irish-banks-may-need-20bn-capital-232696.html @ Andrew Cochrane The IMF may not trust its own forecasts. There was no real growth in 2012 without the benefit of overseas revenue diversions to Ireland that transmute into fake services exports. http://www.finfacts.ie/irishfinancenews/article_1025752.shtml So fake growth is the basis of forecasts for 2013 onward. The OECD said yesterday: “Exports will remain the main driver of growth, making Ireland’s outlook largely dependent on developments in trading partners.” However, the net exports (difference between exports and imports) balance is relying on a dodgy proposition: more fake services exports that are nor offset totally by charges and royalties within the same calendar year. As for the IMF, Craig Beaumont, the Ireland Mission chief, told me last month that the Troika has requested the CSO to produce accounts scenarios that exclude MNC dominant sectors. They obviously want to see the reality behind the fairytales. …and on the real economy, the Quarterly National Household Survey Quarter 1 2013 will be published today. Be cautious of resultant political spin. There is a margin of error is about 9,000; an anomoly in 2012 resulted in farm employment growing by 7,000; there was a jump in part-time employment and self-employment (the latter is not a positive in a poor environment.) Christian Noyer, head of the Banque de France, sent an annual letter attached to a report on 2012 this week, to the president of the French Republic, the president of the Senate, and the president of the National Assembly. It’s the type of Exocet that Patrick Honohan should be firing from Dame Street: The French economy is facing some exceptional challenges. Growth in 2013 will probably be close to zero for the second consecutive year, well below the level needed to maintain employment.. Billions of human beings now aspire to the level of riches enjoyed by the most developed countries, and this legitimate desire, combined with technological advances, has led to profound shifts in the world’s economic geography and in the conditions of production… The underlying objective is growth. Not just a temporary spurt, sustained artificially by public spending, but strong and lasting growth that creates jobs and is based on the development of modern and competitive production capacity. This kind of growth cannot just be summoned up. It requires a profound change in public policy…The fight against unemployment and reform of the labour market France is one of the biggest spenders on employment policies in the developed world, but it still has one of the highest levels of unemployment, particularly among the younger population. …despite the fact that German GDP contracted almost twice as much as in France in 2009, German unemployment remained stable while around 500,000 jobs were destroyed in France. It is easier to bounce back from partial unemployment and a temporary reduction in working hours when the economy improves, than from job cuts which are often irreversible. France has partially made up for its lag in introducing effective benefit systems for compensating partial unemployment. But our economy and workers have paid a steep price for the choices made in the past, to the detriment of labour market flexibility. http://www.banque-france.fr/fileadmin/user_upload/banque_de_france/publications/RA-2012-lettre-EN.pdf On the real economy, the report this week that Michael Noonan is going to have a stringent new economic plan to replace the Troika bailout programme, was both good and bad news. It could have some good points in it. However, the bad news is that €1.4 million has been provided in the 2013 estimates to draft the 7-year plan aimed at growing the economy. How many consultants did TK Whitaker hire in 1957/58? In the public interest there is a serious need for a warts and all plan, not another insider consultancy group opining about developing export markets when the individuals have never sold a bean! Remember 3 years ago?: up to 235,000 net high tech jobs could be created in Ireland by 2010 to exceed the number in Silicon Valley — self-delusion is a kind term for these fantasists. I have outlined some of the realities here…but I’m working on a 20-year plan! http://www.finfacts.ie/irishfinancenews/article_1026027.shtml There is no inevitability for France or Ireland that the peak living standards of the boom can be scaled again in the next 20 years. Objectives: Immediate strengthening and comprehensive overhaul of the banking sector; Ambitious fiscal adjustment to restore fiscal sustainability, correction of excessive deficit by 2015; Growth-enhancing reforms, in particular on the labour market, to allow a return to a robust and sustainable growth. The first has been completed (ie: a successful failure). Next! The second will guarantee ungrowth. Next! The third is pure, unadulterated social and economic, hubric sh*te! “There is no inevitability for France or Ireland that the peak living standards of the boom can be scaled again in the next 20 years.” Its inevitable that they will not. Consider: The current total global production of liquid fossil fuels is sufficient to give each person 2 litres each, per day. 2 l/p/d provides you the equivalent of Irish economic activity in the early 1950s! And some of you want Chindia (where average daily consumption is slightly over 1 l/p/d) – to keep ‘growing’! ‘Cause when Chindia ‘grows’, we all grow. God preserve us! If Chindia manages to sustain its current growth trends – which it will not, then it would be scheduled (by 2020 – 2022) to consume the entire (like all, as in 100%) of the available global exports of liquid fossil fuels. Won’t happen. So, what will? Please go figure about this aggregate economic ‘growth’ crap. A few ‘dead-cat bounces’? Sure:but that’s it. Hi folks, since I often feel a little bewildered, when I read statements and recommendations about my own Germany, by European Commision, the OECD, the IMF, but being deeply aware of that I have most likely also some significant home bias, I also wonder, how serious I take there recommendations for other countries. Given, that many of you also have substantial knowledge of Germany, I would be very interested what you make of the assessment of Germany in these recommendations. Especially from those, like DOCM and Shay, who have larger disagreements : -) So I would like those to go first, and Michael Hennigan and John Gallagher going a little later? I believe that could be pretty fruitful for us all. Maybe just somewhat guided by the criteria: – How important is what – How far is it their (EC, IMF, OECD) or your business (triggering vice versa, how far I / Germany should dish out recommendations for you) – How much do you trust their prediction powers? http://www.imf.org/external/np/sec/pn/2006/pn0688.htm was the first IMF thing, I found for pre 2008 for Ireland @John Gallagher/Michael Hennigan Shush….your scaring the bloody horses. Meanwhile bond yields are heading upwards with US 10 yr hitting 2.33% yesterday. Shure it won’t be long before equivalent Irish are on a par with US TReasuries. fiat, http://finance.yahoo.com/q?s=%5ETNX says 2.12 http://www.bloomberg.com/markets/ says 2.13 you scared me into looking up a second source @ Michael “There is a margin of error of about 9,000 Is it only 9000? I was reading there recently about the US non farm payroll numbers and apparently they can be all over the place and it takes ages to get a decent read even though the market have moved on long since. Re TK whitaker and consultants His 1958 paper “Economic Development” opened with an observation. “The greatest fault lies in pursuing a policy after it has proven to be unsuitable or ineffective”. But consultants don’t look at things in the same way @seafóid <TK Whitaker’s 1958 paper> “Economic Development” “The greatest fault lies in pursuing a policy after it has proven to be unsuitable or ineffective”. A hit, a very palpable hit. Expect no acknowledgement. The general consensus outside the European kool-aid Community seems to be that the Commission’s country specific recommendations boil down to “Just keep doing what you are doing with strong determination until it has a different effect to the one it is having”. Willful ignorance and fanaticism dressed up as far sightedness. One of the clearest lessons from the European component of the global crisis is that the upper levels of the various European institutions have political power without any popular political accountability. There is no way to unseat Olli Rehn and he has to be one of the main reasons the crisis has dragged on. @Fiatluxjnr the ducking an weaving over the stress tests is somewhat amusing,from the safety of a few thousand miles.But the mortgage and NPL issues are not going away you know… @hi francis,just reading this but im probably not best to comment in too much detail on Ireland and forecasting/crystal ball gazing….as i only visit it-great graphs here quite a good read. Forecasts by various agencies are simply guides or sign posts,lots work done on IMF ‘bias’ is it political etc.The second link is somewhat amusing. http://www.forfas.ie/media/300513-Irelands_Competitiveness_Performance_2013-Publication.pdf http://www.zerohedge.com/news/2013-04-16/most-disturbing-chart-todays-imf-outlook-revision Guardian’s latest catch up piece on the Great European War against Demand. Eurozone retreats from austerity – but only as far as ‘austerity lite’ Jonathan Portes is unconvinced that there has been a sea change. “What we have in the eurozone now is austerity lite. What they are doing is better than it was but it is not nearly good enough. Intellectually they just don’t get it.“ @ francis First a word of appreciation for bringing a wider German perspective to this blog. The bodies you mention, in my opinion, are like a referee in an unruly boxing match trying to avoid being hit accidentally by one or other of the protagonists i.e. the latter are not paying a blind bit of attention to the referee’s admonishments to stop hitting below the belt. Hollande has already, by way of example, said that it is for France to decide what is to be done. Germany is not any better. http://www.spiegel.de/wirtschaft/kommentar-warum-deutschland-kein-vorbild-in-der-eu-ist-a-902541.html Politicians react to political pressure, not advice from international bodies. It seems to me that it is currently pushing them in the right direction. @DOCM i hope francis has not usurped your role in promoting a ‘wider german perspective’ 🙂 here’s the Barroso press conf. as most people im sure are aware there are none for Ireland ! @ john gallaher @DOCM tks for that a bit below the belt…..the spiegel link was good. here’s decent summary-very little coverage or reporting stateside. http://euobserver.com/economic/120295 FA have an interesting piece too,h/t to MH he linked an article one time,I signed up and get the emails alerts/updates its a decent mag. http://www.foreignaffairs.com/articles/139410/marci-shore/the-banality-of-merkel @ john gallaher The point that I was making is that the Commission under Barroso has little or no leverage. It cannot fill the vacuum of political leadership at a European level. How it is to be filled, I do not know. Assuming nothing untoward happens, the answer will not even be vaguely discernible until after the outcome of the German federal elections is known. Merkel’s popularity nationally is not matched by any real electoral success. As the Der Spiegel blog contributor points out, the current coalition has taken no real initiatives. The likelihood of a return of the grand coalition of her first administration (CDU/CSU and SPD) is high. This would probably be the most desirable outcome as, despite the dismissive comments of Hollande, other French ministers are saying that France will meet her commitments. @DOCM you just had the ‘two pack ‘ as a fan of six packs have say was a little disappointed… http://europa.eu/rapid/press-release_MEMO-13-457_en.htm Regarding the elections i keep an eye on them but no expert,tend to agree a grand coalition appears most likely-possibly another 5% here. Barstool time-enjoyed the exchange as always. http://www.reuters.com/article/2013/05/30/us-germany-antieuro-party-idUSBRE94T07U20130530 Der Dumme Pakt……says FAZ: http://www.faz.net/aktuell/wirtschaft/europas-schuldenkrise/eu-stabilitaetspakt-der-dumme-pakt-12198396.html Since the outbreak of the debt crisis 3 years ago, there has been: „Sixpack“, „Twopack“, Fiskal pact und „Euro-Plus-Pact“. The rules are more complicated than heretofore and although they were suppose to be ‘tougher’ they leave scope for political decisions in individual cases The StabilityPact doesn’t work: It was always an illusion that EU Member States would be bound by debt limitations. @ seafóid I will get back to you on the QNHS as I have asked the CSO for clarifications on a number of issues. Apart from the big jump in Ag/forestry jobs, the jump in self-employment by over 15,000 is an interesting result. As most of the additional jobs in the year are part-time, a person who is unemployed but is trying to start his/her own venture, could be classified as being in a new job but without new income. @ John Gallaher/Dorothy Jones The various packs IMHO are not exactly window-dressing but are very close to it. The FAZ is right with regard to them, especially in its criticism of their technical complexity accessible only to experts, the people Europe leads least at this juncture. As to the AfD, its leader, one such expert, is now, apparently, against the euro but for its retention (!). In short, the ordinary punter in Germany is fully aware of (i) the advantages of the euro for Germany and (ii) its irreversible nature, short of a general European economic calamity. What is needed is the one thing that Merkel/Schaeuble have least prepared their electorate for i.e. a full banking union. The debate has been bowdlerised and reduced in the popular mind to one about “our money” when not a single cent has yet been paid in hard cash (apart from the capital put up for the ESM for which Ireland, of course, has had to borrow its share). They are now hoist with their own petard at precisely the wrong moment in their electoral campaign. cf. his comment by Lorenzo Bini-Smaghi (ousted from his job on the Executive Board of the ECB to make way for Mario Draghi). http://blogs.ft.com/the-a-list/2013/05/30/bank-capital-is-europes-big-problem/ To my non-expert eye, he is right in his view. The question is whether there will be a change of direction after the German elections. For “leads” read “needs”. (Spellcheckers!). @ john gallaher/Dorothy Jones FYI http://www.irishtimes.com/news/world/europe/hollande-and-merkel-agree-to-mobilise-6bn-to-spend-on-unemployed-youth-1.1412409 “When Mrs Merkel referred to “François Mitterrand” instead of “François Hollande”, there was much laughter in the room, the only moment of levity at the 50-minute press conference.” Freudian or deliberate slip? One way or the other, a question of a slow bicycle race between the two leaders. (It took Mitterand two years to see the light). Merkel also seems to suggest that a poverty level job is better than no job. Hi DOCM, in a certain way your Spiegel link actually describes, what I see as a significant problem in Germany: Endless unspecific nagging. At one point he complains about “Reformstau” = no reforms, in another place “ständig neue, unsinnige Spielereien” = too many unnecessary reforms. Sounds like he just doesn’t get majorities for the changes he wants. He complains about that we don’t do more than balance the budget, should we go on a savings trip now? , when most outside Germany ask for more stimulus, more consumption, to somehow trickle down into the other countries? After his vague points, just tax system, some vague improvement of the service sector, immigration polices he puts question marks himself, because, I mean, please, what specifically? Basically every time I ask for specifics, it comes to: NO, this we will not do, because it is not good. What I believe to see more and more, that critics more or less contradict themselves within the same paragraph, critizing unspecifically from the left and the right. Barroso waxing over the “Ehegatten Splitting”. My understanding is that France does a lot more to lower the tax burden on families. But I don’t think many here in this blog are that interested going into details. The head of the Italian Employer association put a full page advertisement in some German newspaper, critizing us in one sentence for not financing reunification with substantially more debt, and in the very next sentence, that we scratched the 3% limit in the early noughties, when things didn’t go exactly to plan. Hääägh? If people have specific proposals for changes, I am happy to discuss them, But those German nagging nabobs of negativity are getting a tiny little bit on my nerves. I brought the recommendations for Germany only up in this way, to see, if there is something one of you might want to bring up, and tried to carefully avoid any biasing from my side. Because my impression is, that a lot of those folks like IMF, OECD, EU Commission are just running down some boilerplates of international average and some of their home bias, and that in many cases there is very little thought behind it. Which then makes me also more careful about what they say about other countries is really making that much sense. Asmussen says it increasingly clearly, we now understand the IMF framework and experiences good enough, to do it ourselves, the IMF has no significant fresh money left to be of any relevance anymore, and maybe we should now get slowly rid of some outside cook to many to stir the pot. I see this point KISS: Keep it simple, stupid as pretty relevant, that the normal people can understand it, and that there is least some rationality in public discussions. I don’t think anybody had any illusions, that one will scare people, who permanently cannot balance a 5% deficit into compliance with a 0.1% fine. But it serves the purpose to get on their nerves, constantly, and possibly justify more drastic actions, only after many violations. Not getting overly pious, It took us also from about 1996 to 2003 to accept, that we had to give up some things. I am pretty confident, that those hopes outside Germany, that we open our wallet after the elections, in a big way, is just a mirage. http://ec.europa.eu/europe2020/pdf/themes/34_public_administration.pdf Information here was interesting to me, not so much in what it said but moreso in the gaps that it identifies in Irish data. @DJ ta for that link,word of warning Dorothy has an almost uncanny ability to predict the score in football games do not take any bets … @DOCM this view is probably a bit unpopular on here but…. “Either way, it is hard to see how core euro-zone politicians can ask their voters to assume responsibility for these bad debts, largely the result of reckless domestic booms, when local politicians have consistently avoided taking responsibility for clearing up the mess themselves. For better or worse, the fundamental political unit of the euro zone remains the nation state and any solutions to legacy debts—as opposed to constitutional innovations to prevent future crises—must work with the grain of existing institutional arrangements.” http://online.wsj.com/article/SB10001424127887323855804578507072754151176.html @George very interesting link,just having a look now,the lack of info on the horridly expensieve and inefficient irish legal system-pg 6,7,8, is curious-no data available indeed…..wonder why ! @ john gallaher This has been my view from the start. However, there is, what can be best described in the terms used by Colm McCarthy, the fact of “taking one for the team” i.e. adopting certain approaches in relation to senior bondholders, i.e.absolving them of any losses, on the insistence of the ECB in the broader interest of the stability of the euro. The question is one of allocation of the resultant losses. As Merkel, at one stage, conceded that Ireland was a “special case”, I think there is a rather inchoate general appreciation of this fact. The question is whether the easing of loan terms for Ireland already meet the resulting obligation. Were it not for the parlous state of the banks elsewhere in the EA, the answer would probably be yes. Given this fact, however, there is another tide to be caught IMHO. @ john gallaher The WSJ, as usual, is more on the ball than the combined journalistic talents of the entire European press corps. http://online.wsj.com/article/SB10001424127887323728204578515501321397738.html @ francis In answer to your question! http://www.bundeskanzlerin.de/Content/DE/Pressemitteilungen/BPA/2013/05/2013-05-30-dt-frz-erklaerung.html DOCM, while I am wondering what question I had towards that link …. the text is at least a lot more to my liking : – specific points – clear dates – conditions , like what other players involved – and often refering to more specific plans with clear names, and authors / owners But, of course, as for any summit, it still contains lots of vague girlandes. As long as I get enough from the above, thats fine with me. @ francis The WSJ covers the most central points. In the good old days i.e. those of the DM, the imbalances between countries would have been dealt with long ago, probably by way of a DM “revaluation” to hide the fact that it was, in reality, a French devaluation. With a single currency, only the real exchange rates i.e. the level of costs in the various economies, can be adjusted. Whether this is a desirable situation or not is beside the point. It is the one with which the politicians are confronted. By way of example, the comparative level of wages is, of course, a key consideration. The French SMIC provides a firm floor in France. http://www.insee.fr/fr/themes/tableau.asp?ref_id=NATnon04145 Such a floor simply does not exist in Germany. It seems the two major players are willing to do something to correct the situation, Germany on a sectoral but all-embracing basis. “Wir schlagen auch vor, die Einführung von Mindestlohnuntergrenzen zu prüfen, die national zu definieren sind und die einen hohen Beschäftigungsstand und faire Löhne garantieren würden – wobei die Wahl zwischen Gesetzgebung und Tarifvereinbarungen besteht.” The indispensable Franco-German motor while not exactly running at full throttle has, at least, sputtered back into life. @DOCM tks for links,what team would that be now? You regulate it you own it…downside risk too… But that’s a very unpopular view…. @DJ-hey Dorothy why not provide a link to that site where you provide great articles from the German papers,you not charging yet I hope ? @ john gallaher That is the question! I think that, if it exists, it is a bit of a moving target. @ francis FYI http://blogs.ft.com/brusselsblog/2013/05/did-berlin-throw-dijsselbloem-under-the-bus/ Power politics is a tough business! ‘Sie Funktionieren alle nicht – weil niemand den Mut hat, wirklich zu helfen’ They all don’t work, bucause noone has the courage to actually help Ex-Chancellor Hemut Schmidt, 94, on the ESM mechanisms [Handelsblatt 130531] @ John, DOCM Some of the following will sound like a laundry list of trivialities, but Shay not knowing about plebiscites in Germany, and you DOCM with this “Mercantilism” made me aware, that we probably should spell them out more often, to discover, hey, what might have been true 40 years ago (Ireland poor, and Greece dirt poor) is not really true anymore. I smiled when I saw you citing the German version, because I only read the English version, having in mind, that I might want to cite here : – ) Soo, here it goes: Jobs like this Eurogroup Chief go most the times not to somebody French or German, and with all the effects of that historic French/German tandem. Because otherwise other folks would complain all the time, that he/she plays to the advantage of those large players. I see France and Germany like this old couple, who decide to stay together, until the kids are out of school, then until they finished education, and then some other reason. They haven’t been in bed together for a very long time, but separation is always somehow not a good idea right now : – ) That Dijsselbloem will not lose his day job and salary over this. And he really wasted no time to produce is first gaffe with the “template” word. These things also happen, if people work too often too long hours, especially in the night. For normal people there are work protection rules, some ways to accommodate in large companies / government. But our family minister Schröder (not related to the former chancellor) is now also dropping out, to take more care of her kid. To work overnight, and still keep your nerves, and not using loose words, is an important requirement for politicians from a certain level on. Paying one or a few more salaries does not really cost that much, and to have somebody doing this EuroGroup job all his time, and hopefully more removed from his national interest, looks more important now. On the one side, the Cyprus events made clear, that time a government can blackmail the EuroArea (EA) with simple non compliance, like the Greek government did so many times, that this will not work anymore. On the other hand, the Anna Karenina principle (Happy families are all alike; every unhappy family is unhappy in its own way) applies here as well. Most of the Cyprus problem was specific to Cyprus, the Russian connection, huge amount of money sloshing around, and depositing them in Greek government bonds was certainly not good risk management. Ireland is unique with the demographics, the dependence on the MNC business, that Irish and other folks can change much easier in and out is opportunity and limitation. Your net salaries for the upper 10 % must be competitive with the larger world. Spain did a gigantic overbuild, and imported 15% population in 7 years, and some pretty interesting mindsets like this Andalusian governor seizing houses by decree. Gulp. Portugal seems to have problems with the general education level and that their location is at finis terra, not very suitable to be connected to the supply chain networks in the center of Europe. And that means, that often solutions have to be adapted to the special situation, and not just dealt with template. You are all “children with special needs” : – ) I hope that you don’t take offense with this wording : – ) It is also clear now, that we will have much larger income differences in Europe for a long time, than most of us thought 20 years ago. I have here especially all the Balkan countries in mind. And that our rules in Europe have to reflect that, and have to be robust towards that. A lot of people in other EU countries see minimum wages as a central tool to provide “social protection. Many here not, and see this more as an infringement on the right of the tariff partners to settle those questions. Especially when I look at the US, the non-German country, I am most familiar with, I worked there for some years and studied their system, I don’t, e.g. http://conversableeconomist.blogspot.de/2013/05/some-international-minimum-wage.html. I remember this 1996 “End of the Welfare State, as we know it”, with some spelled out limit of 5 years in life, to be on government support, and I did ask around: and what happens then, if somebody runs out of that, but doesn’t find work. Would they let people starve and die from cold? The German approach is to provide some guaranteed social minimum (Hartz IV), which amounts to some 27 k Euro for the typical family of 4, and this provides also indirectly some floor to for what wages people are willing to work for. Does anybody know, how this works out now in practice in the US? There should be a substantial number of people, who have run out of their 5 years by now. It irks me somewhat, if folks, with a very limited knowledge of our complete system, constantly come with this attitude that their way to regulate these things is the better one, and derogatively label Germany as “neoliberal”, when I see, that our system takes actually a more honest and principled way, and takes better care of those at the very bottom end. And I am also pretty robust now, when people try to put me into a morally inferior position because of things 60 or more years ago, and especially from countries which did not even participate in WWII. On the specific wordings of the wsj article from john, and DOCM’s minimum wage, I actually do not see that much change to the prior position of Germany, but lots of potential that everybody can read them their way : -) Dorothy , your reference is a little too cryptic @hi francis,no one is starving in the US just a bit work shy! However,these graphs are difficult to ignore the initiatives announced in the DOCM link-I read the English too-are to be welcomed. “Youth unemployment is bad for all the obvious reasons, including the big loss to future productivity and earnings. But Europe’s youth unemployment is strange, because we’ve never seen a generation *this educated* also be this unemployed. Nearly 40 percent of Spain’s 20-and early-30-somethings are college educated. In Greece, it’s 30 percent. Europe’s crisis — clearly worsened by its austerity obsession — is an absurd waste of the most educated generation in the continent’s history.” http://www.theatlantic.com/business/archive/2013/05/europes-record-youth-unemployment-the-scariest-graph-in-the-world-just-got-scarier/276423/ Update on the ’96 change. http://www.manzellareport.com/index.php/u-s/656-how-to-kill-the-u-s-welfare-state well, that Cato guy in the manzella report also shapes the data his way. I doubt that a welfare family of 3 gets 60 k : – ) The guy avoids to put together what is really paid per capita. And to make that association “welfare industry is expensive. Social Security” I find pretty misleading. But what happened to this 5 year limit, just somehow disappeared ? or ? minimum wage in the US is 7.25 $. With a “fair value” of about 1.25 that would be 5.8 Euro, and it doesnt include health benefits. Just a few comments to the Atlantic article, he points out that “Last year, the EU’s youth unemployment ratio was 9.7 percent”, one has to be careful with rate and ratio. With the 26 Mio NEETs, he obviously screws up something. Does he mean the whole world, or all unemployed, or …. ? e.g. http://jobmarketmonitor.com/2012/12/09/europe-neet-7-5-million-young-people-aged-15-24-and-an-additional-6-5-million-young-people-aged-25-29-were-excluded-from-the-labour-market-and-education-in-europe/ When the US and Germany have only 25% with College education, what are those 40% in Spain doing, raking up tuition debt for “something with media” and then go back to there home village and do something useful and sell sausage? Are Spanish girls more clever than german or americans? For a while we also followed the argument, that people can pay tuition fees easily later on, just that this becomes a problem for the 30%, who dont succeed. Bavaria is the last to scrap the fees this year, after enough signatures for a plebiscite were collected : – ) We have soo much rain here, soo long, And Bayern München is probably getting the 3rd cup this year, that would be a first. In general, I find the ILO to be a useful source of more comparable data, and http://www.ilo.org/global/research/global-reports/global-employment-trends/youth/2012/WCMS_180871/lang–en/index.htm looks a little different to how this stuff is now typically displayed. @francis that 60,000 includes cost providing health care to work shy people- but I hear its pretty awful:) Here one side this argument-keep in mind I’m having bit of fun here by the way! http://m.weeklystandard.com/blogs/over-60000-welfare-spentper-household-poverty_657889.html Then you have the bleeding hearts at the WP! http://m.washingtonpost.com/blogs/fact-checker/post/a-misleading-chart-on-welfare-spending/2013/02/20/1b40bcde-7ba4-11e2-82e8-61a46c2cde3d_blog.html There is lots academic research/papers on this keeping it light… John, I certainly have no beef with you : – ) I just pointed out the problems in the first links, because I somehow get more and more the feeling, that a lot of the problems in many countries have significantly to do with creative accounting, and that then the left and the right are not discussing on the same page, something I do not feel for my place. With the “work shy” I also heard that they have still difficulties to find people to operate CNC machines, like lathes, not undemanding, and sometimes one gets a little grease under the finger nails. During my military draft time I actually did some evening programs with metal machines and acounting, because I liked it. Bayern made their 2nd goal, just on target :- ) The Steuerle (sounds like suebian: little taxman : -) graph (in the WP link) looks pretty reasonable, and I would say this is within 15% uncertainty the same we do. That gives a pretty good overview. Thank you ! You might find this interesting as well: http://qz.com/85017/college-in-sweden-is-free-but-students-still-have-a-ton-of-debt-how-can-that-be/ Hi francis,we are miles and miles off tread,I would enjoy a exchange about work shyness and welfare but…..it’s Saturday afternoon cold beer awaits. From what bits pieces I know this chap is very good. Great exchange as always. http://en.wikipedia.org/wiki/Alberto_Alesina 1. Alesina, I think he is in general a good and interesting guy. I read the 2009 paper more than a year ago, and it was like meeeh. Normally I say if Krugman/ deLong / Roubini, and all their acolytes, say something, probably the opposite is true, like correlation minus 0.8. I read the wiki, I read the vicious Paul Krugman http://www.nybooks.com/articles/archives/2013/jun/06/how-case-austerity-has-crumbled/?pagination=false I analyzed the 2009 paper again in a little detail, and it is shit. To justify this harsh verdict: What Alesina seems to be completely missing, is that we are not looking for some small year-to-year adjustments to minor problems, but that deep slumps are a multi (10 – 20 year) event, for which proper remedy programs are also multi-year, carefully planned and executed plans. I resorted the tables with the notifiers: .+ Fiscal Stimuli .- Fiscal adjustments .* Expansionary Fiscal Stimuli ./ Expansionary Fiscal Adjustments .s Successful Fiscal Adjustments And then I looked at the outcome, and compared to what I know, where were crucial points for what nation, and I kept the table here as a signal for just that I spent some effort on this, and the outcome is, That this Alesina 2009 paper is some truly Enron/Madoff perfect shit. Nothing fits. probably a good point to end this here now for today. Comments are closed.