Thursday 5 February 2015

Horizon haircut boosting 2 mill new jobs ?


The International Labour Organisation, ILO, backs Juncker´s € 315 bn investment plan and says it has the potential to create more than 2 mill new jobs. Using a small amount of public money to lever in private capital can complement the monetary measures recently announced by the European Central Bank.

Parts of "the small amount of public money" will come from a haircut of EU´s research and innovation programme Horizon 2020. Research organisations don´t like this part of the investment plan at all. The European Association of Research and Technology Organisations  have published a statement expressing deep concerns about the proposal and says it offers little reassurance that the investment plan projects will effectively aim at supporting R&I activities.

The Council and the European Parliament will decide on details of the investment plan later.

Monday 2 February 2015

Syriza - changing the debt puzzle ?

During the days after the Greek election 25 January there have been statements from the new Greek government and from the Union and other member countries that might seem to be incompatible. Most important was perhaps German chancellor Merkels statement that she does not envisage a fresh debt cancellation. But there are also clarifications and additional statements which indicate willingness to have a new common look at the pieces of the puzzle. For example by the end of the week PM Tsipras said that no side is seeking conflict, and it has never been their intention to act unilaterally. Greece, he said, would not renege on its debt.

And Greece is not alone with their criticism of the negative consquences of the austerity policy. The French finance minister Sapin said on Friday that though the Greek debt should not be annuled, it also appeared legitimate to him that the Greek government would like to discuss ways to reduce the weight and reimbursement of the debt. To day EU observer reports that US president Obama has entered the debate by urging the eurozone to look at how the US returned to growth: "Fiscal imprudence is important. But what we´ve learnt in the US experience .. is that the best way to reduce deficit and return to fiscal soundness is to grow". "You cannot keep on squeezing countries that are in the midst of depression", he told CNN.

Some of the pieces in the puzzle that will be looked at are probably:
-repayment terms  -  the Union has said it is willing to do that
-repayment of debt tied to economic growth, not Greek budget  -  may be
-write-off of debt  -  less likely
-structural reforms inside Greek  -  likely

In the longer term it will be necessary to improve the Unions regulations for economy management. Andrew Duff, president of the Union of European Federalists, said in an interview with EurActiv last week that more federalism not necessarily means one-size-fits-all policies. "Common economic policy combining monetary, fiscal and economic measures would not be a single policy for the whole of the EU.  It would obviously be tuned to regional and cyclical varieties, but it would be accountable and representative and responsible, whereas the present set up is essentially driven by national prime ministers on a part time and intergovernmental basis. This has proven not to work."