Berlin Eyeing Early Launch of Permanent Bailout Mechanism

The European Stability Mechanism, the permanent bailout fund for the euro zone, may be introduced sooner than planned, SPIEGEL has learned. According to the German finance ministry, led by Wolfgang Schäuble, the government in Berlin is considering launching the ESM next year, rather than waiting until 2013. If all participating parliaments have ratified the agreement for the new international financial institution, it makes sense for them to start their work immediately, according to the ministry. (source: Der Spiegel – 26/09/2011)

An expedited start would have a number of advantages; above all, future calls for collateral in return for aid, as Finland is currently demanding from Greece, would be unnecessary. The ESM will have capital of 80 billion euros (107.4 billion dollars) paid up-front at its disposal to serve as collateral. In the meantime, a solution for the Finns’ controversial demand for security could be on the horizon. They will get their security, but only if they pay their share of the ESM capital, amounting to almost €1.5 billion ($2 billion ) in one go. This possibility would be made available to all the other participating countries as well. No one in Berlin, however, expects anyone to emulate the Finns. Most countries, including Germany, will pay their contributions to the ESM in five equal annual instalments, as originally planned.

Separately, Chancellor Angela Merkel (CDU) appeared on German TV on Sunday night to reassure the public over the euro crisis and defend her government’s course of action. Speaking on public TV station ARD, she insisted that a Greek default was not an option. It would destroy investor confidence in the euro zone and might spark contagion like that experienced after the bankruptcy of Lehman Brothers in 2008, she argued. “We need to take steps we can control,” Merkel said, drawing a parallel between the Greek situation and that of Lehman Brothers, whose bankruptcy helped trigger the global financial crisis. “What we can’t do is destroy the confidence of all investors mid-course and get a situation where they say that if we’ve done it for Greece, we will also do it for Spain, for Belgium, or any other country. Then not a single person would put their money in Europe anymore.” The main thrust of her hour-long appearance opposite talk show host Günther Jauch was simple: The situation is serious but under control. Athens must enforce its reforms; otherwise there will be no more aid. But removing Greece from the euro is not an option. She said there was no alternative to reforming the European Financial Stability Facility (EFSF), the temporary bailout fund, and that the ESM, which is set to supersede the EFSF and make state insolvencies possible, was equally essential. In future there must be a better mechanism for sanctions against countries which cannot maintain stability. And for European financial and economic policy: Yes to better coordination, no to a common financial government.

Merkel said she was confident the law will be passed, and that she did not regard it as essential that her center-right coalition musters its own absolute majority. Opposition parties have said they will back the law, so it is virtually certain to go through. But a failure by Merkel to rally enough of her own coalition MPs to secure an own majority, which would in effect make her reliant on opposition votes, would be seen as a major blow to her authority. In recent weeks, some two dozen MPs from her conservatives and their junior coalition partner, the pro-business FDP, have threatened not to back the law. Her coalition has a 19-seat majority in the Bundestag lower house of parliament. Radical steps such a as a debt haircut for Greece or a return to the deutschmark for Germany were ruled out by Merkel. A debt haircut may sound easy, Merkel said, but it could cause a massive loss of investor confidence across the entire euro zone, with incalculable consequences. And a return to the deutschmark would make German exports too expensive. Merkel, however, referred specifically to the importance of establishing the possibility for an orderly state bankruptcy in the ESM. “I am convinced we need that.”

While German Central Bank Opposed to Merkel’s Euro Course: http://www.spiegel.de/international/europe/0,1518,788352,00.html

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América Latina y el Caribe capean volatilidad mundial

América Latina sigue enfrentando relativamente bien los problemas que aquejan a la economía mundial, comentó el presidente del Banco Interamericano de Desarrollo, Luis Alberto Moreno, en una reunión de presidentes de Bancos Centrales y Ministros de Finanzas. En declaraciones a los miembros del Grupo de los 30, Moreno dijo: “De hecho, para muchos países, el entorno externo ha sido relativamente positivo, y la región ha logrado avances significativos y fundamentales. Sin embargo, la región está en condiciones de avanzar aún más”. (Fuente: BID – 26/09/2011)

El progreso ha sido desparejo, pues los países exportadores netos de materias primas a los emergentes, capaces de atraer inversiones extranjeras, han superado con amplitud a sus pares regionales.‪ Más allá de su desempeño actual, los gobiernos latinoamericanos y caribeños necesitan formular políticas para mitigar riesgos que se avizoran en la economía global. Entre los temas que reclaman atención, Moreno mencionó la necesidad de prevenir el contagio financiero en los sistemas bancarios. Asimismo, amortiguar los efectos de la caída de precios de productos de exportación, contener las presiones inflacionarias y enfrentar los problemas estructurales que suelen pasarse por alto por atender a las preocupaciones de corto plazo. Moreno hizo estos comentarios en una reunión del Grupo de los 30 que congregó a presidentes de bancos centrales, ministros de finanzas y directivos de instituciones financieras internacionales con el propósito de discutir las perspectivas económicas y financieras mundiales.

Formalmente conocido como Grupo Consultivo sobre Asuntos Económicos y Monetarios Internacionales, el G30 está compuesto por destacadas figuras de los sectores público y privado. En sus reuniones, miembros e invitados examinan temas difíciles, discuten opciones de políticas y analizan el posible impacto de su aplicación. El evento, celebrado al margen de la reunión de otoño de las Asambleas de Gobernadores del Fondo Monetario Internacional y el Banco Mundial, fue encabezado por el presidente del G30, Jacob A. Frenkel, ex gobernador del Banco de Israel. El presidente de la Reserva Federal, Ben S. Bernanke; el presidente del Banco Central Europeo, Jean-Claude Trichet; el gobernador del Banco de Japón, Masaaki Shirakawa, y el viceprimer ministro y ministro de Finanzas de Singapur, Tharman Shanmugaratnam, también discutieron los actuales retos económicos mundiales. Los presidentes del Banco de Canadá, Mark Carney,y Stefan Ingves, del Banco Central de Suecia -quien preside a su vez el Comité de Supervisión Bancaria de Basilea- presentaron sus puntos de vista sobre los mercados financieros y la regulación. En el panel de clausura, la directora gerente del FMI, Christine Lagarde, el presidente del Banco Mundial, Robert Zoellick y el presidente Moreno, ofrecieron sus comentarios desde la perspectiva de las instituciones financieras multilaterales con sede en Washington. Esta es la tercera vez que el BID ha sido anfitrión de una reunión del G30. En los últimos 30 años, el G30 ha producido más de 80 investigaciones y 25 informes especiales. También ha celebrado 65 sesiones plenarias y numerosos seminarios sobre banca internacional.

Río+20: ¿Visión economicista o integradora de desarrollo?

De cara a la Conferencia de la ONU Río+20, a realizarse en junio del año próximo en Brasil, foros preparatorios se efectúan en diferentes países y regiones a fin de llegar a un consenso que viabilice acuerdos a tomar en esa cita. El debate se enfoca en dos temas: la economía verde con vistas a la sustentabilidad y la erradicación de la pobreza y la creación del marco institucional para el desarrollo sostenible. Si bien el objetivo de Naciones Unidas es lograr que los Estados y la comunidad internacional sienten las bases para un mundo de paz, próspero y perdurable, existen diferentes concepciones de cómo deben tratarse los asuntos referidos, en particular el primero. (Fuente: Agencia Prensa Latina – 26/09/2011)

Durante un reciente Simposio de alto nivel efectuado en Beijing sobre la próxima Cumbre de la Tierra, los asistentes del Grupo de los 77 más China ratificaron la total vigencia de los principios adoptados en la reunión que tuvo lugar en Río de Janeiro en 1992. Los participantes procedentes de más de 30 países coincidieron en que el compromiso nº7 relacionado con las responsabilidades comunes pero diferenciadas de los Estados, sobre todo de los países industrializados con los en vías de desarrollo, es innegociable.

Ese principio está dispuesto acorde a la medida en que los primeros han contribuido a la degradación del medio ambiente mundial, su desarrollo tecnológico y recursos monetarios. Gisela Alonso, presidenta de la Agencia de Medio Ambiente de Cuba y asistente al simposio, señaló a Prensa Latina que dentro de este contexto se plantearon elementos sustantivos vinculados a los problemas de financiamiento y transferencia de tecnología. También se habló acerca de la importancia de desarrollar la ciencia en los países pobres y de aspectos sociales relacionados con dificultades en la educación y la salud. Desde el punto de vista de la economía verde, los asistentes consideraron que ésta debe verse como una herramienta dentro del concepto de desarrollo sostenible, al defender este último con sus tres pilares: social, económico y ambiental. En reuniones preparatorias de la región de ALC se insistió, incluso, en la necesidad de incorporar un cuarto pilar, el cultural, que promueva la empatía entre las personas y la responsabilidad en el uso de los recursos naturales. Los tres puntos capitales acuñados en la primera Cumbre de la Tierra (1992), en teoría, deben perseguir un equilibrio armónico, pero en la práctica se ha visto que el segundo ha prevalecido sobre los otros dos. En ese sentido, a juicio de algunos expertos, la Economía Verde podría entenderse como un retroceso en relación con el concepto integrador de desarrollo sostenible, en tanto profundiza más en una visión economicista de la realidad. Ello, podría generar una brecha respecto a las iniciativas de conservación, además de relegar lo social a un segundo plano. Otros, en tanto, alertan sobre proyectos que, amparados por ese concepto, tratan de ampliar o crear nuevos mercados para las corporaciones y usar peligrosas tecnologías, con el argumento de sus “supuestos beneficios verdes”. Destacan en ese sentido el afán de ponerle precio a todo lo que integra la biodiversidad, a partir del paradójico “reconocimiento” de que su erosión es uno de los mayores problemas globales.

Con respecto al tema de fortalecer la gobernanza mundial, en la cita de Beijing se manejó la necesidad de un mayor vínculo entre los ministerios de medio ambiente, finanzas y demás sectores de la economía de los países. Mientras, los ministros y representantes de los gobiernos de América Latina y el Caribe reunidos en la sede de la CEPAL en Santiago, Chile, coincidieron en que esa institucionalidad global debe ser eficiente y flexible. Además, debe alcanzar una efectiva integración de los tres pilares del desarrollo sostenible mencionados, según difundió el Programa de las Naciones Unidas para el medio Ambiente (PNUMA) en un comunicado de prensa. Los delegados también se pronunciaron allí por un cambio en los patrones de producción y consumo, mejores formas de medir la riqueza, la preservación de los principios fundamentales de las responsabilidades comunes pero diferenciadas y la equidad. Si bien el avance esperado en el tiempo transcurrido desde la primera Cumbre de la Tierra en 1992 no supera las expectativas de muchos, sirve recordar que la situación actual es muy diferente a la de aquel entonces. Hoy las pruebas sobran y la conciencia es mayor en cuanto a lo que es capaz la naturaleza cuando sus patrones son alterados, también hemos sentido el golpe de las crisis económico-financiera y alimentaria, y presenciado los conflictos sociales en diferentes países y regiones. Es evidente que estos, entre otros factores, hacen de este un mundo más complejo, el cual demanda un cambio radical en estrategia y conductas a seguir y un enfoque integrador en todos los ámbitos a fin de alcanzar el principal objetivo de la Cumbre de 1992: preservar la especie humana.

La Organización Latinoamericana de Energía promueve la integración energética de la región

La Organización Latinoamericana de Energía (OLADE) en el marco de su contribución al desarrollo energético de América Latina y del Caribe, con el apoyo de la Secretaria Nacional de Energía de Panamá organiza el VI Foro de Integración Energética Regional, que se llevará a cabo en la Ciudad de Panamá, los días 24 y 25 de octubre de 2011. Este evento tiene como objetivo central promover el intercambio de experiencias, la reflexión y la discusión técnica sobre la Integración para la seguridad energética en la Región, con el propósito de proporcionar elementos de análisis a los Países Miembro y a las iniciativas regionales de integración para la correcta formulación de políticas y proyectos. Entre las temáticas a desarrollarse en el Seminario destacan: la visión regional de la integración como factor de la seguridad energética, perspectivas de los organismos de integración y entidades financieras, así como sistemas energéticos regionales, el rol de las empresas en las iniciativas de integración energética, la cooperación internacional como instrumento de integración. A esta agenda se suma el Lanzamiento del Observatorio de Integración Energética de América Latina y el Caribe, como una iniciativa de cooperación de la Academia y de los Gobiernos orientada a consolidar la información disponible sobre integración energética, brindar una mejor asistencia técnica a los Países Miembros y crear una plataforma de análisis, identificación de lecciones aprendidas y recomendaciones en temas de intercambio de energía, comercio e complementariedad energética. Contaremos con la participación de distinguidas autoridades del sector energético, así como especialistas de Organismos Internacionales regionales y subregionales y de entidades y empresas públicas de energía; representantes sector privado, grandes empresas proveedoras de equipos y servicios, desarrolladores de proyectos; así como representantes de universidades y centros de investigación. (Fuente: OLADE – 26/09/2011)

Threats to the realization of India’s potential

For all of India’s many and weighty advantages and its present trajectory, a fatal stall cannot be ruled out. To paraphrase Winston Churchill, has India gone from the inherent virtue of socialism as the equal sharing of miseries to the inherent vice of capitalism as the unequal sharing of blessings? It has the world’s largest pool of poor, sick, starving and illiterate. Access to safe water and sanitation remains a pipe dream for most, disease is endemic, and life is nasty, brutish and short for far too many. A 300 million-strong middle class leaves 750 million poor. On present trends, in 2020 India will still have half a billion poor people. Worldwide, India ranks 134 on ease of doing business indicators, 119 on human development, 122 on gender equality, and 87 on corruption. (source: by Ramesh Thakur – The Japan Times – 22/09/2011)

The first-generation economic reforms of border liberalization of trade and foreign investment have been tackled, but not the follow up reforms of the more complex, politically sensitive maze of regulations to cut business costs, increase consumer choice, promote competition and boost productivity. The public sector is too large and parasitical, public debt too high and the labor market too rigid. India’s economic nationalists are fiercely opposed to foreign investment — which brings capital, technology and management expertise — for fear of erosion of policy autonomy. China sees foreign capital entry as essential for buttressing and augmenting national sovereignty and embraced the World Trade Organization as a key tool in imposing an external discipline for achieving the necessary domestic policy reforms.

India joined the WTO grudgingly, not out of conviction but because there was little choice left. Political and bureaucratic hurdles are many, labyrinthine and substantial; bribery is rampant at multiple levels in the chain of decision-making required to get government approval; markets are split from suppliers, with transportation networks that are far too inadequate and antiquated for linking them effectively; communications and electricity are risible for a country that claims to be an IT powerhouse; and the debilitating twin cultures of entitlements and subsidies constrain rewards for enterprise and merit, on the one hand, and the operation of the price mechanism on the other. Economic growth has yet to translate into significantly rising employment. A telling human cost of those left behind: in the 1997-2009 period, 216,500 farmers committed suicide, for an average of 16,654 people per year for 13 years running. In 2010, India’s road death toll was around 150,000 — thrice as many as the U.S. or, on a per vehicle basis, almost 20 times the U.S. Most of those killed in India’s traffic accidents are pedestrians, cyclists, motorcyclists and pillion riders — that is, those from the poorer end of society, not the more affluent car drivers and passengers. Even this statistic is a proxy for several ailments, including inadequate infrastructure that adds to road risks and public corruption that ensures weak compliance with driving skills and safety regulations, etc. India will need a minimum infusion of $500 billion investment in its infrastructure sector over five years. Reservations for the scheduled castes and tribes were written into the constitution in 1950. Had they worked, they would have fallen into desuetude by now. Instead they keep multiplying and expanding, which in itself is proof of their failure. The pathology of caste quotas includes many pernicious and perverse consequences in addition to compromising merit and ability- based recruitment and promotion, which has an economic efficiency cost. Indians are more caste-conscious than they were at independence.

Corruption distorts markets and encourages inefficiency. The biggest cost is political. It would be difficult to exaggerate the revulsion of ordinary people to the ubiquitous and institutionalized venality of public life. Petty corruption is especially endemic at the lower, clerical levels of administration — precisely the point at which the ordinary citizen comes into daily contact with officialdom. Hence the mass support for the Ana Hazare movement that seems to have thrown the government off balance. Since 1989, the federal government has been either a minority or coalition government, dependent for continuance on the support of a number of minor parties whose political base rarely extends beyond one province. Some months ago India’s editors were called for an extraordinary conversation in which Prime Minister Manmohan Singh confessed to helplessness in tackling corruption because of the compulsions of coalition politics. The volatility of democratic governance makes it difficult to make decisions that are timely, final and forceful. So many different constituencies and interests must be appeased, so much time devoted to getting “consensus,” that what is necessary for national advancement gets progressively whittled down to what is possible for political survival in a fractious coalition. The legitimacy of India’s political democracy is also being corroded with the criminalization of politics and dynastic parliamentary representation. Around one-third of members of Parliament face serious criminal charges. Not just the leadership of the Congress and some other political parties, but even many ordinary MPs inherit seats as family patrimonies.

Calculations done by Patrick French show that 29 percent of India’s MPs inherited a “family” seat. For Congress Party MPs, the figure is 38 percent. Most worryingly, 70 percent of women MPs and more than two-thirds of the 66 MPs under 40 in India’s parliament are hereditary MPs. No wonder the people feel disenchanted! The weak economic institutions, stifling regulatory norms, barriers to starting and closing businesses, tardy and costly enforcement of property rights, complex and time-consuming dispute resolution procedures, are matched by poor quality of governance in the legal and political institutions. The instruments of state are still used far too much to serve the interests of the rulers at the expense of the welfare of citizens. The Singh government has been palpably adrift, in part owing to coalition complications, in part to power lying in Sonia Gandhi’s hands while Singh is prime minister, and in part to the anticipated but protracted and uncertain transition from Singh to Rahul Gandhi as prime minister. Still, the good thing is that Indians themselves debate their shortcomings and merits openly and vigorously. Many members of the chattering class, mired in a nostalgia for a golden age that never was, oppose the very reforms that have brought hope and improvement for the poor. Many more behave as if the promise of economic development is reality. Hubris and complacency might prove to be the biggest threat to the promise being realized. 

Os compradores de tempo

Há um poema de Ralph Waldo Emerson que, em tradução livre, diz mais ou menos o seguinte: “O cavaleiro serve ao cavalo/o organizador à organização/o comerciante à sua bolsa/quem come serve ao alimento/este é o tempo do ter/o tecido serve ao tear e o milho ao seu moinho. As coisas estão na sela e conduzem a humanidade”. Com mais de cem anos, esta reflexão serve para explicar o presente. Nunca tantos dirigentes se reuniram tantas vezes e por tanto tempo, conduzidos perplexos e impotentes pelo movimento dos fatos e das coisas ao redor. Ao invés de reorientarem os destinos da humanidade, os “dirigentes”, políticos e economistas, agem como simples compradores de tempo, adiando o desenlace da crise. (Fonte: art. Cristovam Buarque – O Globo – 24/09/2011)

Os fóruns internacionais aparecem na televisão como reuniões de cardeais, os governantes, auxiliados por teólogos, os economistas, enquanto nas praças os indignados movimentam-se por Reforma para o futuro. De crise em crise, reuniões e pronunciamentos, governantes do mundo demonstram incapacidade política para entender a dimensão do problema e incapacidade estadista para propor alternativas; agem como impotentes atores de uma tragédia grega: não controlam o desenrolar da história, apenas representam. Ou como comandantes de barco sem bússola, navegando em circulos ganhando tempo para ver se surge uma estrela nova no céu, ou se a tempestade acalma. Não parecem buscar reorientação, contentam-se em adiar o desenlace, comprando tempo, deixando as coisas e os fatos conduzirem os destinos imediatos dos povos. Semana após semana, discute-se ajuda financeira, corte de gastos, aporte a bancos, taxas de juros e paridade cambial. E marcam-se novas reuniões. Não percebem a complexidade da armadilha na encruzilhada que a civilização industrial enfrenta, ou são impotentes para quebrar as amarras; interessados e viciados na realidade e no curto prazo, não querem mudar o rumo; preferem o desastre, à mudança. Já não há como aumentar os gastos públicos, mas sem eles o bem-estar social desaba e o crescimento economico estanca. Não há como crescer sem vender, nem vender sem financiamento bancário, mas os bancos esgotaram as possibilidades para criar moedas e a capacidade para financiar o consumo. A degradação ambiental mostra os riscos da tragédia ecológica, mas a proteção ambiental limita a possibilidade de crescimento. A oferta de energia precisa aumentar, mas as grandes represas destroem a biodiversidade, a energia nuclear é uma ameaça a ser evitada e as fontes alternativas são caras. Sem o povo satisfeito não se vence eleições, mas atender os desejos do povo agrava a crise. Não há como romper a moeda única na Europa nem as inter-relações comerciais e financeiras do mundo global, a integração sacrifica a população das nações menos inovadoras.

Alguns podem pensar numa saída para a crise global e civilizatória, mas seus instintos políticos estão voltados para o eleitor local e as próximas eleições. De tanto olhar para juros, moeda, dívida, câmbio e produção, os economistas e políticos não têm capacidade para ver a dimensão completa da civilização global. De tanto querer retomar o ritmo do crescimento da economia, não percebem a necessidade de mudar o rumo do futuro. A prisão ao velho paradigma do crescimento a qualquer custo e a qualquer perfil do PIB impede os governantes de pensarem em alternativas que levem em conta as limitações do modelo que se esgotou depois de cem anos baseado no consumismo. Soluções como, por exemplo, elevação do bem-estar pela redução da jornada de trabalho, ampliação da oferta de bens públicos e garantia de meio ambiente sadio não entram na lógica dos debates dos governantes. Se propuserem essas soluções, seus eleitores não se satisfarão, porque desejam, sobretudo, retomar o mesmo caduco modelo esgotado. Os “indignados” manifestam o descontentamento, mas não carregam ainda as cores da bandeira de uma nova civilização. Os jovens não lutam por um mundo diferente, mas para garantir no futuro os privilégios dos pais, no passado. Só um novo modelo nas mãos de estadistas globais poderia trazer esperança de uma reorientação civilizatória. No entanto, nossos dirigentes e economistas, com raras exceções, continuam prisioneiros de fetiches, mitos, crenças do passado economicista da civilização industrial, condenados a compradores de tempo, sem oferecer alternativa e esperança.