On Wednesday (6th March) PRIME’s co-director Jeremy Smith was invited by TRT World TV channel to take part in their Roundtable discussion on the future of the euro and eurozone, hosted by David Foster. His co-panellists were Valentina Romei, FT, Vicky Pryce, Chief Economics Adviser to the CEBR and via skype from France, Philippe Waechter, Ostrum Asset Management.
While updating our data for GDP per head of population from OECD and ONS, and doing some quick calculations, I realised a startling fact. The present age of austerity, starting with the 2010 Coalition government, and on to the Cameron / May Conservative governments, has to date been the worst since records began for average annual change in GDP per head. And if we exclude years of recession, it has been by far the worst.
The global economy is heading towards a downturn. However, is the world prepared to deal with the consequences? Whether it is a slowdown or recession, it remains to be seen as to what the future would hold for the banking systems of Eurozone and China, and the global stocks in general.
Although Theresa May has survived to fight another day as Prime Minister, the of her Brexit deal in parliament has blown the debate wide open. The Prime Minister has called on MPs to "put self-interest aside" and "work constructively together" to find a way forward. In this context, the Labour Party’s next steps are critical.
The debate about Lexit is now irrelevant. The only form of Brexit that is possible is one that will entrench the status quo or empower something far worse. The left must unite against it.
It is my view that there can be no ‘soft’ Brexit, given divisions within the governing party; given the rules of the Single Market; given the threat to the future of the Union if exceptions are negotiated for Britain; and given the political and logistic complexity of the Northern Ireland border. We are therefore headed either to Remain, or for a ‘hard’ Brexit. If it is to be the latter, we will automatically leave the EU on 29 March, 2019.
This is an extract from a chapter in Economics For the Many (Verso, 2018) edited by Rt. Hon. John McDonnell MP. The chapter was written in August, 2017.
If we are to secure a sustainable, stable and liveable future for the people of Britain, then implementation of the Green New Deal will be vital. Not just for the sake of the ecosystem, but also for the sake of rebuilding a stable, sustainable economy. A sustainable economy will be one dominated by a “Carbon Army’ of skilled, well-paid workers.
The main body of the draft Withdrawal Agreement is certainly long and detailed – a tribute to the efficiency of the EU’s legal services – but it mainly contains the sort of provisions one would expect for the terms of the separation, and for issues that straddle the departure timeline.
But as for the so-called Ireland/Northern Ireland Protocol, that’s another matter altogether. It’s not a backstop for Northern Ireland, but an up-front set of binding rules for the UK as a whole.
In this post, PRIME’s co-director Jeremy Smith and Progressive Economy Forum Council member John Weeks analyse the current “bar room budget-brawl” between the Italian government and the European Commission, and argue that the Commission’s wrong-footed response threatens to strengthen the far right. To avoid opening the door to fascism, the EU must ditch its bias towards austerity.
It’s budget time. Austerity has severely damaged Britain’s physical and social infrastructure. Coupled with a fall in real wages, austerity has shrunk Britain’s social wage. No wonder British voters are angry and disillusioned. So let’s examine the case for a £50 billion spend. For the NHS, local government, central government services, and unfreezing benefits…
It can be done within the levels of expenditure considered acceptable during the Thatcher era. All it takes is political will – and the overturning of the ‘Treasury View’.
Turkey and Argentina are non-identical twins; both countries suffered from almost simultaneous financial crises both in 2001 and 2018. Both are currently suffering from currency crises with potential spill-over to the rest of the emerging markets, and there are those who argue that these twins may have triggered a crisis in the emerging markets in 2018.
But this time Turkey, resisting too many internal and external calls for asking for help from the IMF, hired McKinsey & Company instead.
Ten years on from the full explosion of the Great Financial Crisis in autumn 2008, and Brexit lurking just round the corner… A lot of the Brexit arguments revolve around the perceived pros and cons of the EU’s Single Market; meanwhile, President Trump has been using force majeure to overturn aspects of the 1994 NAFTA deal.
Given this conjuncture, I thought it would be instructive to take stock and assess, over a longer time-frame, how the UK and other developed economies have performed from an overall macroeconomic perspective. And in particular, whether any impact of the Single Market and NAFTA can be detected.
For John Maynard Keynes, the main purpose of increasing loan-financed government spending at times of economic weakness is to increase the nation’s income. Keynes argued that any such government spending was not deficit spending, because he understood the spending as the most sensible means to cut the deficit. Deficit-reduction spending might be a more appropriate definition.
“You will never balance the budget through measures which reduce national income”
The calls for a “People’s Vote” on the government’s proposed Brexit ‘deal’ (if indeed there is one) grow louder, but are especially contentious for the Labour Party, whose membership is more minded to “remain” than the public at large, which still seems fairly evenly split.
But the call for a People’s Vote is not so straightforward, partly now in terms of timing and Parliamentary arithmetic, but above all since it poses the tough question – what question to ask the People to vote on? Or indeed what questions, plural?
After the BRICs came the MINTs – Mexico, Indonesia, Nigeria and Turkey.
In a series of January 2014 BBC programmes, Jim O’Neill – then the Goldman Sachs economist who had coined the term BRICs – celebrated the new acronym. On a blog under the title ‘The Mint countries: Next economic giants?’ he raved about the potential of his new discoveries:
I returned from my travels thinking it won't be so difficult for Nigeria and Turkey to positively surprise people, as many put far too much weight on the negative issues that are well-known – crime and corruption in Nigeria, for example, or heavy-handed government in Turkey…
Neglect of Keynes’s monetary theory and policies has come at the price of increasingly frequent international financial crises.. It is time to restore the revolutionary Keynes.
On 19th July, 2018, the director of Policy Research in Macroeconomics (PRIME), Ann Pettifor, received the following from Professor Antonia Grunenberg of the Heinrich Boll Foundation, Bremen, Germany.
Dear Mrs. Pettifor,
it is my great pleasure to inform you in behalf of the international jury of the „Hannah Arendt Prize for Political Thinking“ that you have been unanimously selected to be the winner of the prize in 2018.
Die date of the ceremony is December 7, 2018.
The jury pointed out that you, a distinguished scholar, have had the courage to touch a complex topic that keeps influencing European and world affairs as well as the life of people all over the globe: the domination of the political realm by the dynamics of financial speculation…
For policymakers, the importance of private debt was the key take home from the financial crisis. Private debt is also a central theme in the Bank of England’s latest commentary around financial stability, with particular emphasis on the position in China and the US.
But there is a sense of this being only a partial account, with only very limited attention to the more generalised inflation of debt across a very large number of countries.
The world’s financial markets are hurtling towards a new phase of crises ranging from currency to balance of payments to sovereign debt to banking crises. The monetary tightening policies of the United States Federal Reserve and the European Central Bank will only precipitate crises in emerging market as well as peripheral eurozone economies, which will have global repercussions.
Much of the debate over Brexit focuses on narrowly on trade in goods. In that debate one finds relatively little discussion of the performance of the EU internal market with regard to commodity trade (“goods”). The typical argument for the British government negotiating a post-Brexit agreement presumes that EU internal market rules facilitate robust trade outcomes, and that operating outside of it would undermine goods trade. But has the EU internal market in fact facilitated trade among members? How should that be assessed?