Forget Italy: Fiscal union is unlikely to mend the euro’s defective heart February 27, 2013 WHEN the European Central Bank announced last year that it would do “whatever it takes” to save the euro, many assumed the crisis was over. This week’s Italian election has already shown that an unexpected event could easily throw off balance Europe’s preferred solution. But there is a more important issue at stake. The Eurozone [...]
The end of too big to fail is fast approaching but there is more left to be done February 27, 2013 I AM a supporter of free enterprise, yet I represent an industry that has been the biggest recipient of a state bail-out in British history. It is something that critics of banks have never ceased to remind me. “Tell me,” said an old colleague, “why the banks’ profits are privatised, but their losses are nationalised”. [...]
Bank of Dave Two: How one man took on the FSA and won February 27, 2013 I NEVER wanted to be a banker. But back in 2008, my minibus company in Burnley had a problem. My customers were coming to me for new buses, and needed finance to buy them – as they had done for 20 years. As soon as the credit crunch hit, however, the banks suddenly stopped lending [...]
Letters to the Editor February 27, 2013 Negative interest [Re: Negative interest rates are the last thing the economy needs, yesterday] Driving down the nominal interest rate below zero (and the suggestion that Britain will see further quantitative easing) shows just how strongly the Bank of England supports the UK’s debt economy. The whole system encourages consumers to borrow money and penalises anyone [...]
Nightmare for Brussels as Italians vote to reject austerity consensus February 26, 2013 AS FAR as nightmare results go, if you sit in Brussels, Berlin or Frankfurt, the Italian elections could not have delivered a worse outcome. A fresh dose of uncertainty has been injected into the Eurozone. Although Pier Luigi Bersani, the centre-left coalition leader, won by a slim margin in the lower house, none of the [...]
Why even Keynes would be concerned about the risks of further stimulus February 26, 2013 AGAINST THE GRAIN THE loss of the AAA credit rating on UK government bonds has intensified the demands for a Plan B. So-called Keynesians are demanding an increase in both public spending and the public sector deficit. But what might the late great economist John Maynard Keynes himself have said about the current situation? Lacking [...]
The West has failed to adapt to China’s huge savings glut February 26, 2013 AS RECENTLY as 1990, the Chinese saved $153bn (£101bn) a year and accounted for less than 1 per cent of global savings. This year, they will save $4.5 trillion and account for 25 per cent. Over the last eight years, China has leapt from holding a tenth of the world’s savings to a quarter. My [...]
Letters to the Editor February 26, 2013 Italy votes [Re: Study Italy’s election: It is the shape of things to come in the UK, yesterday] A very good column. Economic failure will always be accompanied by political upheaval. I don’t think Italy’s result is worrying, however. Democracy is never worrying, except to those to whom it poses a threat. And at least the [...]
Simpler energy tariffs will worsen fuel poverty and harm innovation February 25, 2013 DAVID CAMERON has backed proposals by the regulator Ofgem to simplify energy tariffs. Under the new scheme, suppliers will be restricted to offering no more than four tariffs for each type of fuel, and customers will be put on their supplier’s lowest variable rate unless they choose otherwise. But will these proposals help customers with [...]
Misguided calls for further stimulus misunderstand Britain’s downgrade February 25, 2013 FRONTLINE ECONOMICS BRITAIN’S downgrade became inevitable on 29 November 2011. Before then, the chancellor was committed to eliminating the structural deficit within five years, and to getting net debt as a proportion of GDP falling by 2015. But new forecasts, presented on that day’s Autumn Statement, indicated that he wouldn’t achieve the first target on [...]