When President Holland was elected in the summer, he suggested that Europe would turn against austerity and promote economic recovery as the most important objective. However, despite his early promises, the French budget is strongly deflationary. Given the state of the current French and Eurozone economy, this budget is likely to push France into prolonged …
How much fiscal adjustment (austerity) have Eurozone economies pursued? Underlying Primary Budget Balance in selected Eurozone economies 2009 2010 2011 2012 2013 France -4.3 -3.4 -1.5 -0.5 1.3 Italy 0.3 1.4 1.6 4.5 6.2 Germany 0.8 -0.1 1.0 0.9 1.1 Greece -10.1 -4.2 0.4 3.2 5.5 Ireland -7.1 -4.7 -2.7 -0.8 0.9 Portugal -5.9 -5.1 …
Readers Question I’m currently looking at stagflation in the mid-1970s in the UK, and the policies the then-Government undertook to solve the economic crisis. Was the Government right to widen the budget deficit 1974-5 in order to stimulate demand, or should it have run less expansionary policies to temper the effect of rising prices? Basically, …
Italy has struggled to reduce national debt as a % of GDP since government debt has risen to over 100% of GDP in the late 1980s National Debt Italy Italy has the second highest public sector debt in Europe, after Greece. The IMF predict public sector debt of 123.4 % of GDP in 2012. By …
France national debt has increased significantly over the past two decades. In 1985, government debt was 37.9% of their GDP. French national debt is now 85% of GDP. In Q4 2011, French debt is currently 1717 bn Euro Source: INSEE – general government debt according to Maastricht criteria. Up to Q4 2011 Public sector debt …
Readers Question: Why is the current recession in Europe so bad? The recession in the Eurozone is one of the deepest recessions on record. For example, Greece are expecting 2013 to be the sixth consecutive year in recession (with on and off quarters of recovery)- this is one of the longest recession on record. Output …
Readers Question: There just seems to be many paradoxical actions taking place in markets and economies at the moment. How do we explain? Paradoxes of UK economy Low interest rates have not increased spending / economic growth Despite recession, inflation has been above target. Despite recession and depreciation of Pound, current account deficit increased in …
What are the Global Imbalances? US ran a large and persistent current account deficit (imports higher than exports) of up to 6.5% of GDP in 2006 Diagram of Current Account Surplus / Deficit in US and rest of world source: (1) 2. China ran a large current account surplus, accumulated foreign reserves, kept Yuan undervalued …