Sunday, June 24, 2012


Este trabajo de Dani Rodrik es especialmente importante en relación con la cuestión de la necesidad de las orientaciones y niveles nacionales por falta de instituciones comunes, especialmente en la crisis europea, y porque dichas orientaciones y soluciones solo serán posibles si existe, por su articulación política, la base social para apoyarlas y defenderlas.

Los escenarios negativos que el autor menciona en un link previo están también ligados a las crisis de los diferentes Estados.Sobre todo en Europa.

Introducción y conclusiones:

The nation state has few friends these days. It is roundly viewed as an archaic construct that is at odds with 21st century realities. It has neither much relevance nor much power, analysts say. Increasingly, it is non-governmental organizations, global corporate social responsibility, or global governance on which pundits place their faith to achieve public purpose and social goals. It is common to portray national politicians as the sole beneficiary of the nation state, on which their privileges and lofty status depend. 

The assault on the nation state transcends traditional political divisions, and is one of the few things that unite economic liberals and socialists. “How may the economic unity of Europe be guaranteed, while preserving complete freedom of cultural development to the peoples living there?” asked Leon Trotsky in 1934. The answer was to get rid of the nation state: “The solution to this question can be reached ... by completely liberating productive forces from the fetters imposed upon them by the national state.” Trotsky’s answer sounds surprisingly modern in light of the euro zone’s current travails. It is one to which most neoclassical economists would subscribe.


Concluding remarks

The design of institutions is shaped by a fundamental trade-off. On the one hand, relationships and heterogeneity push governance down. On the other, the scale and scope benefits of market integration push governance up. A corner solution is rarely optimal. An intermediate outcome, a world divided into diverse polities, is the best that we can do.

Our failure to internalize the lessons of this simple point leads us to pursue dead ends. We push markets beyond what their governance can support. We set global rules that defy the underlying diversity in needs and preferences. We eviscerate the nation state without compensating improvements in governance elsewhere. The failure lies at the heart of globalization’s unaddressed ills as well as the decline in our democracies’ health.

The answer to my title “Who needs the (nation) state?” is: we all do."

Dani Rodrik

This is the revised version of the Roepke Lecture in Economic Geography delivered to the Association of American Geographers on February 25, 2012, to be published in Economic Geography in 2013. A version of this paper was also presented as the Arrow Lecture in Ethics and Leadership at Stanford University. I am grateful to Yuko Aoyama and Andres Rodriguez-Pose for their invitation and reactions, Roberto Unger for helpful discussions, John Agnew for very insightful comments, and participants at the Arrow lecture at Stanford University for suggestions.

Thursday, June 21, 2012


EconoMonitor : EconoMonitor » The Eurozone’s May 2010 Strategy Is a Disaster: Time to Pay Up and End This Crisis

Chancellor Angela Merkel has sent word that Germany cannot save the euro. She is right.

From the very start of the Eurozone crisis, it was clear that a domino game was under way and that a highly indebted German government should not be seen as the residual saviour. But keeping the euro will be costly and Germany will have to share the burden.
The solution will have to combine debt structuring and ECB lending in last resort to banks and governments. Angela Merkel needs now to lift the German veto.
All Eurozone leaders, including Mrs Merkel, are to blame for today’s predicament.
  • The politically expedient decision of May 2010 – to bailout Greece but promise that it would be “unique and exceptional” – was officially sold as necessary to avoid contagion.
  • Two years later, it is obvious that this has been a historical but predictable policy mistake (Wyplosz 2010).
The crisis has engulfed three small countries – Greece, Ireland and Portugal – and is now on its way towards Spain and Italy. France might well be next. These six countries’ public debts amount to 200% of German GDP. With its own debt of 80% of GDP, Germany cannot indeed stop the rot.



The May 2010 strategy is a disaster: Admit mistakes and move on

The strategy adopted in May 2010 has not just failed to achieve its aims: restore debt sustainability, avoid contagion and reduce moral hazard. It has not produced a solution that is likely to bring the crisis to its end. A 180-degree turn is still needed.
Unfortunately it will be costly.
  • A number of countries will never be able to achieve sustainable growth under the weight of their current public debts.
  • This is the case of Greece, Portugal and Italy,
  • The list may eventually widen to include Ireland, Spain and France.
Their governments will have to restructure their debts, totally in the case of Greece, partially – if done early enough – in the other cases.
  • As the banks in these nations fail (because they did not adequately diversify their portfolios), bank bailouts will also have to be financed from outside.
Who will pay?
  • Foreign banks will, of course, end up writing down the restructured sovereign debt; they, in turn, may have to be bailed out by their own governments.
  • Official creditors too will suffer losses.
This includes the ECB, to the extent that it imposed insufficient haircuts in its various refinancing programs, and the shareholders of the EFSF and the ESM, which also happen to be the shareholders of the ECB.

Waiting only raises the eventual price

The more we wait, the deeper the economic deterioration – more lending to governments and more non-performing loans in banks – and the bigger the eventual costs.
  • Importantly, the list of ‘bailer outs’ shrinks as the list of ‘bailed outs’ expands, so the costs of the rescue become concentrated on a decreasing number of healthy countries.
  • Waiting too long implies that there is no healthy country left or no Eurozone any more, probably both.

Wednesday, June 20, 2012

Sunday, June 17, 2012

It’s Now ABOUT Germany, NOT UP TO Germany

EconoMonitor : EconoMonitor » The Euro-Zone Debt Crisis – It’s Now ABOUT Germany, NOT UP TO Germany

Satyahit Das:

"Germany’s guarantees supporting the European Financial Stability Fund (“EFSF”) are Euro 211 billion. As Spain could not presumably act as a guarantor of the EFSF once it asks for financing, Germany’s liability will increase further from 29% to 33%. France’s share also increases from 22% to 25%. Perhaps most interestingly, the liability of Italy, which is in poor shape to assume any additional external financial burden, rises from 19% to 22%.

The European Stability Mechanism, the replacement to the EFSF which is planned to commence in July 2012, will require a capital contribution from Germany which will push its budget deficit from Euro 26 billion to Euro 35 billion. If the ESM lends its full commitment of Euro 500 billion and the recipients default, Germany’s liability could be as high as Euro 280 billion.

Since 2010, the Euro-Zone has committed Euro 386 billion to the bailout packages for Greece, Ireland and Portugal. In June 2012, Spain is expected to request at least Euro 100 billion for the recapitalisation of the banking system, making the total commitment just below Euro 500 billion.

But the largest single direct German exposure is the Bundesbank’s over Euro 700 billion current exposure under the TARGET2 (“Trans-European Automated Real-time Gross Settlement Express Transfer System”) to other central banks in the Euro-Zone.

Designed as a payment system to settle cross border funds flows, surplus countries, like Germany, have been forced to use TARGET2 to finance deficit countries. Before 2008, deficits were financed by banks and investors. Since the crisis commenced, TARGET2 has been used to meet the funding needs of peripheral countries without access to money markets to fund trade deficits and the capital flight out of their countries.
Germany is by far the largest creditor in TARGET2. The Netherlands, Finland and Luxembourg are the other creditors with all other Euro-Zone countries being net debtors within the system.


Fund manager John Hussman summarised the idea of Euro-Zone bonds neatly ( “This is like 9 broke guys walking up to Warren Buffett and proposing that they all get together so each of them can issue “Warrenbonds.” About 90% of the group would agree on the wisdom of that idea, and Warren would be criticized as a “holdout” to the success of the plan”

Germany’s TARGET2 exposure would also continue to increase, at a rate of Euro 80-160 billion per annum to finance expected trade deficits in the rest of Europe. The increase in exposure may be higher if needed to finance budget deficits of weaker Euro-Zone members and the weak banking sector. Germany’s TARGET2 exposure has increased by around Euro 237 billion or around 34% in the last 8 months alone.


In the peripheral economies, continued withdrawal of deposits from national banks (a rational choice given currency and confiscation risk) may necessitate either a Europe wide deposit guarantee system or further funding of banks.

The amounts involved are substantial. Total bank deposits in the Euro-Zone total around Euro 7.6 trillion, including Euro 5.9 trillion from households. The euro zone’s peripheral countries, which are most susceptible to capital flight, have Euro 1.8 trillion in household deposits. In the first 3 months of 2012, Euro 97 billion of deposits were withdrawn from Spanish banks.

A credible deposit insurance scheme would have to cover household deposits (say up to Euro 100,000), which is around 72% of all deposits, in the peripheral countries. This would entail an insurance scheme for around Euro 1.3 trillion of deposits.


Any European deposit guarantee system, provision of capital or further funding of banks would potentially increase Germany’s financial liability.

If integration is not undertaken or the partial solutions fail, then some European countries will need to restructure their debt and potentially leave the common currency. Germany would suffer immediate losses. A Greek default would result in losses to Germany of up to around Euro 90 billion. Germany’s potential losses increase rapidly as more countries default or leave the Euro-Zone. The greater the delay in default or departure the larger the German losses as their exposure increases.


As Friedrich Nietzsche knew: “…hope is the worst of all evils, because it prolongs man’s torments.” Germany may not, as widely assumed, offer a safe haven in the European debt crisis."

Otras contribuciones de Satyahit Das


El libro de Ermano Vitale recientemente publicado aborda la cuestión de las crisis constitucionales y de los distintos paradigmas políticos que las abordan, rastreando sus orígenes.Uno de los capítulos se refiere a las modalidades de resistencia "de los monarcómacos a Thoreau".

Sobre este último, nos parece que el libro no examina en detalle la complejidad de la breve obra del autor de Concord sobre esta materia.Al margen de sus influencias en otros autores, Thoreau tuvo planteamientos sencillos pero claros sobre la defensa frente a los poderes.

La suya no es una doctrina de servidumbre desesperada ni "individualista", aunque está basada en el individuo y sus derechos:


Las doctrinas de desesperación, de tiranía o servidumbre espiritual o política no fueron nunca propuestas por aquellos que compartieron la serenidad de la naturaleza.


Historia Natural de Massachussets

Nunca habrá un Estado realmente libre e ilustrado hasta que el Estado no reconozca al individuo como poder más alto e independiente, del que todo su poder y autoridad son derivados, y le trate con arreglo a esta circunstancia.


Resistencia al Gobierno Civil

Si el paradigma en crisis de los derechos constitucionales es la base constitucional de la defensa o resistencia, entonces a éste sería al que se acoge Thoreau.En su tiempo, sin embargo, no se había formulado o se había formulado negativamente cuando el Tribunal Supremo americano sostuvo en Dred Scott que los negros de origen afroamericano no eran titulares de derechos constitucionales.

Sunday, June 3, 2012


Reseñamos y comentamos brevemente tres recientes artículos sobre la crisis del euro.El orden es deliberado y no cronológico.El criterio que los ordena es, en primer lugar, un relativo optimismo sobre la capacidad de fijar el problema español principalmente motivado por los atavismos resistentes a la profundización de la "europeización " (Europa sería, invocando a Ortega, la solución y no el problema).El artículo de Fernandez-Villaverde, Garicano y Santos quiere enfatizar que no hay salida al margen de Europa, pero queriendo enfatizar este aspecto omite cuestiones muy importantes que son necesarias en cualquier hoja de ruta.

 En primer lugar la profunda crisis institucional española y europea, que sobria pero certeramente señala Torreblanca.Sin una solución de ésta ninguna crisis financiera y fiscal tendrá solución.Y este un problema que está más allá de la capacidad de los líderes nacionales.

Finalmente,por contraposición, "El final del Euro: guía de supervivencia" de los norteamericanos Jhonson y Boone enfatiza que, en su opinión, la crisis del euro ya está en un punto de no retorno desde un punto de vista económico y político y lo argumenta en detalle y de forma bastante plausible.No está mal que los europeos empecemos por considerar cómo ven nuestros problemas nuestros rivales, aunque sean aliados.Esa es una forma de pensar más necesaria ahora que nunca.Hasta ahora estamos por encima del bien y del mal con muy poca fortuna.

Seguramente Nada es Gratis puede aportar también su informada visión sobre las cuestiones políticas y económicas abajo detalladas.Ignoro si viene de los años cincuenta, pero uno de los principales problemas de nuestro país y de Europa es la falta de debate.Las cuestiones son de los técnicos o de los políticos y, en último termino, solo de estos últimos.Y punto final.Así es como hemos llegado hasta aquí. No es ni mucho menos seguro que pueda revertirse la tendencia.


"No queremos volver a la España de los 50,” de JesúsFernández-Villaverde, Luis Garicano, Tano Santos (El País 1 de Junio de 2012)

Para empezar, necesitamos cambiar radicalmente nuestra estrategia de negociación con Europa. Este es un juego cooperativo, con ganancias potenciales enormes para todos si encontramos la solución, no un juego de suma cero. En la construcción europea no hay acuerdo posible sin confianza mutua, no hay rescate sin alianza. Contrariamente a la propaganda que escuchamos, Alemania no quiere dominar Europa. El problema es precisamente el contrario, que Alemania desea que le dejen en paz y asegurarse que no se impone una solución en la que le toman el pelo y en la que debe hacer transferencias al resto de Europa hasta el fin de los tiempos.

Nos conviene mantener el euro, única forma de control de los desmanes de nuestros dirigentes
Segundo, debemos abandonar el populismo. Olvidémonos de Gibraltar: entran más españoles a vivir en Londres en un año que la entera población del Peñón. ¿Queremos hablar de esto cuando empresas cruciales españolas dependen de la voluntad del regulador financiero, energético o aeroportuario inglés? Igualmente, dejemos de clamar a gritos nuestra soberanía en peleas abiertas a pecho descubierto con el BCE —que es el único que provee ahora mismo de financiación a la economía española— y con nuestros socios. La histeria debe pasar a mejor vida.

Y no acusemos a Bruselas por lo que nos piden hacer. Las reformas hay que defenderlas en sí, porque es en el interés de España que el estado sea sostenible. España debe expresar un claro compromiso con la construcción europea y con soluciones que minimicen en lo posible las transferencias a largo plazo. España debe decir un claro sí a Europa, que es lo único que nos protege del peronismo empobrecedor, y que estamos dispuestos a pagar el precio que esto acarrea.

Para ello, necesitamos urgentemente un nuevo gobierno, con apoyo de todos los partidos mayoritarios y de nuestros expresidentes, compuesto por políticos competentes y técnicos intachables con amplios conocimientos de su cartera. Este gobierno debe trabajar con tres prioridades. Primero, poner de verdad en marcha las reformas necesarias reconstruyendo la confianza de inversores extranjeros, contribuyentes españoles y socios europeos. Segundo, afirmar, sin ambigüedad, el compromiso absoluto con el euro y la construcción europea. Y, tercero, plantear a nuestros socios, desde la confianza generada por un gobierno coherente y serio, una ayuda económica en condiciones para resolver el único problema que no podemos resolver solos: el agujero creado por la burbuja inmobiliaria en el sistema financiero, a cambio de un control europeo de los bancos rescatados y de un sistema regulador común.

La sociedad española debe decidir qué España quiere. Hay una España posible por la que queremos luchar, una España moderna, con instituciones fuertes e independientes, con un nivel de vida elevado, un sistema educativo abierto pero exigente y con un Estado del bienestar sostenible. Este modelo de España está en su misma esencia ligado a Europa.

Y esta respuesta debería ser obvia, pues ya la dio Ortega hace 102 años en un discurso al club de opinión de Bilbao. Frente a los que acusan a Europa de todos nuestros males, hoy como ayer, España es el problema, Europa la solución.

Jesús Fernández-Villaverde es catedrático de Economía, University of Pennsylvania; Luis Garicano es catedrático de Economía y Estrategia, London School of Economics; Tano Santos es catedrático de Economía y Finanzas de la Escuela de Negocios de la Universidad de Columbia.

Reparar Europa antes de usarla (El País Jueves 31 de Mayo)
Jose Ignacio Torreblanca

"No saldremos de la crisis sin unas instituciones europeas renovadas a todos los niveles

Despreciar el 15-M o fijarse en sus aspectos más atrabiliarios es un error pues este movimiento no es revolucionario sino profundamente democrático y, si se quiere, incluso conservador ya que su mensaje central es tan sencillo y verdadero como que esta democracia no funciona como dice que funciona ni tampoco como debería funcionar.

Es hoy evidente que no saldremos de esta crisis solo con más y mejores políticas, ni en el ámbito nacional ni en el europeo, sino con nuevas, renovadas o reforzadas instituciones a tdoso los niveles.Antes de usar Europa, la debemos reparar, lo que nos obliga a pensar y actuar en dos niveles al mismo tiempo:lo mismo ocurre en el contexto estrictramente naional.En España y en Europa debemos reconstruir las instituciones y la confianza pues es evidente que con los diseños institucionales actuales y las actuales relaciones de poder no saldremos de ella.

… en España y en Europa está crisis es política, luego su solución está en la política y, por tanto, al alcance de la mano.¿Voluntarismo?.Sí eso exactamente es lo que necesitamos, en España y en Europa."

¿Pero realmente está al alcance?

"Some European politicians are now telling us that an orderly exit for Greece is feasible under current conditions, and Greece will be the only nation that leaves.  They are wrong.  Greece’s exit is simply another step in a chain of events that leads towards a chaotic dissolution of the euro zone.

During the next stage of the crisis, Europe’s electorate will be rudely awakened to the large financial risks which have been foisted upon them in failed attempts to keep the single currency alive.  If Greece quits the euro later this year, its government will default on approximately 300 billion euros of external public debt, including roughly 187 billion euros owed to the IMF and European Financial Stability Facility (EFSF).

More importantly and currently less obvious to German taxpayers, Greece will likely default on 155 billion euros directly owed to the euro system (comprised of the ECB and the 17 national central banks in the euro zone).  This includes 110 billion euros provided automatically to Greece through the Target2 payments system – which handles settlements between central banks for countries using the euro.   As depositors and lenders flee Greek banks, someone needs to finance that capital flight, otherwise Greek banks would fail.  This role is taken on by other euro area central banks, which have quietly leant large funds, with the balances reported in the Target2 account.  The vast bulk of this lending is, in practice, done by the Bundesbank since capital flight mostly goes to Germany, although all members of the euro system share the losses if there are defaults.

The ECB has always vehemently denied that it has taken an excessive amount of risk despite its increasingly relaxed lending policies.  But between Target2 and direct bond purchases alone, the euro system claims on troubled periphery countries are now approximately 1.1 trillion euros (this is our estimate based on available official data).  This amounts to over 200 percent of the (broadly defined) capital of the euro system.  No responsible bank would claim these sums are minor risks to its capital or to taxpayers.  These claims also amount to 43 percent of German Gross Domestic Product, which is now around 2.57 trillion euros.  With Greece proving that all this financing is deeply risky, the euro system will appear far more fragile and dangerous to taxpayers and investors.

Jacek Rostowski, the Polish Finance Minister, recently warned that the calamity of a Greek default is likely to result in a flight from banks and sovereign debt across the periphery, and that – to avoid a greater calamity – all remaining member nations need to be provided with unlimited funding for at least 18 months.  Mr. Rostowski expresses concern, however, that the ECB is not prepared to provide such a firewall, and no other entity has the capacity, legitimacy, or will to do so.

We agree:  Once it dawns on people that the ECB already has a large amount of credit risk on its books, it seems very unlikely that the ECB would start providing limitless funds to all other governments that face pressure from the bond market.  The Greek trajectory of austerity-backlash-default is likely to be repeated elsewhere – so why would the Germans want the ECB to double- or quadruple-down by suddenly ratcheting up loans to everyone else?

The most likely scenario is that the ECB will reluctantly and haltingly provide funds to other nations – an on-again, off-again pattern of support — and that simply won’t be enough to stabilize the situation.  Having seen the destruction of a Greek exit, and knowing that both the ECB and German taxpayers will not tolerate unlimited additional losses, investors and depositors will respond by fleeing banks in other peripheral countries and holding off on investment and spending.

Capital flight could last for months, leaving banks in the periphery short of liquidity and forcing them to contract credit – pushing their economies into deeper recessions and their voters towards anger.  Even as the ECB refuses to provide large amounts of visible funding, the automatic mechanics of Europe’s payment system will mean the capital flight from Spain and Italy to German banks is transformed into larger and larger de facto loans by the Bundesbank to Banca d’Italia and Banco de Espana– essentially to the Italian and Spanish states.  German taxpayers will begin to see through this scheme and become afraid of further losses.
The end of the euro system looks like this.  The periphery suffers ever deeper recessions — failing to meet targets set by the troika — and their public debt burdens will become more obviously unaffordable. The euro falls significantly against other currencies, but not in a manner that makes Europe more attractive as a place for investment.

Instead, there will be recognition that the ECB has lost control of monetary policy, is being forced to create credits to finance capital flight and prop up troubled sovereigns — and that those credits may not get repaid in full.  The world will no longer think of the euro as a safe currency; rather investors will shun bonds from the whole region, and even Germany may have trouble issuing debt at reasonable interest rates.  Finally, German taxpayers will be suffering unacceptable inflation and an apparently uncontrollable looming bill to bail out their euro partners.

The simplest solution will be for Germany itself to leave the euro, forcing other nations to scramble and follow suit.  Germany’s guilt over past conflicts and a fear of losing the benefits from 60 years of European integration will no doubt postpone the inevitable.  But here’s the problem with postponing the inevitable – when the dam finally breaks, the consequences will be that much more devastating since the debts will be larger and the antagonism will be more intense.

A disorderly break-up of the euro area will be far more damaging to global financial markets than the crisis of 2008.   In fall 2008 the decision was whether or how governments should provide a back-stop to big banks and the creditors to those banks.  Now some European governments face insolvency themselves.  The European economy accounts for almost 1/3 of world GDP.  Total euro sovereign debt outstanding comprises about $11 trillion, of which at least $4 trillion must be regarded as a near term risk for restructuring.

Europe’s rich capital markets and banking system, including the market for 185 trillion dollars in outstanding euro-denominated derivative contracts, will be in turmoil and there will be large scale capital flight out of Europe into the United States and Asia.  Who can be confident that our global megabanks are truly ready to withstand the likely losses?  It is almost certain that large numbers of pensioners and households will find their savings are wiped out directly or inflation erodes what they saved all their lives.  The potential for political turmoil and human hardship is staggering.
For the last three years Europe’s politicians have promised to “do whatever it takes” to save the euro.  It is now clear that this promise is beyond their capacity to keep – because it requires steps that are unacceptable to their electorates.  No one knows for sure how long they can delay the complete collapse of the euro, perhaps months or even several more years, but we are moving steadily to an ugly end.
Whenever nations fail in a crisis, the blame game starts. Some in Europe and the IMF’s leadership are already covering their tracks, implying that corruption and those “Greeks not paying taxes” caused it all to fail.  This is wrong:  the euro system is generating miserable unemployment and deep recessions in Ireland, Italy, Greece, Portugal and Spain also.  Despite Troika-sponsored adjustment programs, conditions continue to worsen in the periphery.  We cannot blame corrupt Greek politicians for all that.

It is time for European and IMF officials, with support from the US and others, to work on how to dismantle the euro area.  While no dissolution will be truly orderly, there are means to reduce the chaos.  Many technical, legal, and financial market issues could be worked out in advance.  We need plans to deal with: the introduction of new currencies, multiple sovereign defaults, recapitalization of banks and insurance groups, and divvying up the assets and liabilities of the euro system.  Some nations will soon need foreign reserves to backstop their new currencies.  Most importantly, Europe needs to salvage its great achievements, including free trade and labor mobility across the continent, while extricating itself from this colossal error of a single currency.
Unfortunately for all of us, our politicians refuse to go there – they hate to admit their mistakes and past incompetence, and in any case, the job of coordinating those seventeen discordant nations in the wind down of this currency regime is, perhaps, beyond reach.
Forget about a rescue in the form of the G20, the G8, the G7, a new European Union Treasury, the issue of Eurobonds, a large scale debt mutualisation scheme, or any other bedtime story.  We are each on our own."

Peter Boone is chair of Effective Intervention, a UK-based charity, an associate at the Centre for Economic Performance, London School of Economics, and a principal in Salute Capital Management Limited.
Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management, a senior fellow at the Peterson Institute for International Economics, and a member of the CBO’s Panel of Economic Advisers.  He is a co-founder of The Baseline Scenario.

A version of this material appears also on the Huffington Post.