Reforming is a path for reelection: German Chancellor Angela Merkel privatized, deregulated, capitalized. She did not reflate nor accepted deficits : she reduced taxes. For sure, there are some lessons to learn for France.
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WP 2013-05. Executive Summary Although it is generally agreed that government size has a negative impact on economic growth, it is also manifest that the intensity of this causal relationship…
“A nation with a small but strong government which gives people the space they need”: this what Dutch King Wilhem-Alexander wants for his people. And it has become a domestic policy on September 17th, 2013. The King has a life-time in front of him to consider the social, economic and political evolutions of society. Unlike an elected President, he does not have only a handful of years poisoned by the lurking idea of reelection for another handful of years to propose or back policies. That is why, in this view, the King can speak freely and without pressure of any kind. Thus the Dutch King declared in front of the Parliament that the welfare state was gone, over, finished. This 20th century concept is no longer relevant in our mordern society. John Galt on the throne of the Netherlands? Not yet, but that is a good step forward.
In the two months since we last reported, the media has focussed on the rebound in the EU area, where in the second quarter GDP grew at an annualised rate of 1.1%. The atmosphere has been optimistic, so optimistic, that even the Aug 20 confirmation by Germany’s Finance Minister Schaueble that Greece will default again caused barely a ripple. Even the stock market wobbles over fears of military conflict with Syria were muted (Dow Jones down 4.4% in August). The roundly castigated term “austerity” has appeared only rarely. When it does get a mention it is always used pejoratively, to explain why certain countries continue to have problems. For example, Portugal’s July announcement that it needs to renegotiate its 2011 bailout package is blamed on previously implemented austerity.
While Ireland may exit its bailout program at the end of this year, Greece is far from getting out of it. Around 10 to 11 billion euros ($13.1-14.4 billion) from the second half of 2014 will be needed to keep it going next year and in 2015. This will be the Third Act of the economic tragedy unfolding in Greece. Jeroen Dijsselbloem, Dutch Finance Minister, confirmed to the European Parliament that “as far as the potential need for a third program for Greece is concerned, it’s clear that despite recent progress, Greece’s troubles will not have been completely resolved by 2014”.
This is the transaltion of an article published by Nicolas Lecaussin on August 14th, 2013
What is the common point between Socialists as Claude Bartolone, President of the French National Assembly, Pierre Moscovici, the Finance Minister, MP Jérôme Guedj, Conservatives as Xavier Bertrand, Health minister during the Sarkozy Presidency, Environmentalists as European MP Daniel Cohn-Bendit, Nationalists as Marine Le Pen, President of the National Front and her speaker Florian Philippot, and the leftist review “Marianne”? Well, there are all anti free trade! All of them have found the perfect solution to the devastating economic crisis: more Government intervention, less economic freedom.
This is the translation of an op-ed published by Jean-Philippe Delsol on August 24th, 2013 in the leading French newspaper “Le Figaro”.
In France, during the last 30 years, social spending went from 21% to 33%. It is the sign of an ever growing Big Government that is out of control and unbearable. Thus, as German Chancellor Angela Merkel pointed out, Europe “gathers 7% of the world population, 20% of the production and 50% of social spending”, and France has the spending leadership. According to the OECD, 60% of France’s spending is made in the social sector, i-e 33% of its GDP whereas Germany is spending 26.2% of its GDP in the social sector, the United Kingdom 23.8% and the OCDE average is at 22.1%.
“There will have to be another program in Greece,” German Finance Minister Wolfgang Schäuble said bluntly on August 20th. The two previous bail-outs amounted to about 240 billion euros but that was not enough. According to the International Monetary Fund, one the Troika member, the estimated uncovered funding needed by Greece for 2014-2015 may amount to 10.9 billion euros.
“The youth is the utmost priority of my mandate”. Thus spoke François Hollande on January 23, 2013, when wishing a happy new year 2013. “Happy” may not have been the right term, “subsidized” should have been better. Indeed, when saying that 500 000 young people below 25 years-old do not have a job, that 25% of them are unemployed, the French President does not think that entrepreneurship is the solution. On the contrary, for him the Government must spend more money to help create jobs. And President Hollande is generous with public money: no less than 5 billion euros will be wasted on inefficient job policies!
WP 2013-04. Executive Summary The critical situation of most state-pension schemes plays a key role in explaining the public-finance crises that characterize many West-European countries. Although most observers refrain from…