It is a sign of the pressure being felt at the heart of the eurozone that France and Germany, the main drivers of the European project, have had such a public spat in the last 24 hours. Yet the subject of that spat is a subject that has exercised many an economist as the economic downturn has progressed.

To recap, France has argued that years of moderate wage rises in Germany has raised the competitiveness of the latter country at the expense of its neighbours. Christine Lagarde, the French finance minister, has told the Financial Times that Germany should raise domestic consumption, helping weaker eurozone nations to boost exports and shore up their finances. Germany has responded by arguing that its success is based on strong companies and has suggested that other countries would be better off building their own industrial sectors in the German fashion than crying foul about German success.

Who is right? Well, both. Read more »

   Filed under: Economics, Europe, Financial crisis, Globalisation, Investment, Manufacturing | No Comments »

The ‘Fighting for a Financial Transactions Tax‘ conference in Brussels is now tackling the operational detail of an FTT. All the speakers (see list at the end) are emphasising that FTTs are technically feasible – and more than that, vital. Read more »

   Filed under: Europe, Financial crisis, Tax, Transactions tax | 1 Comment »

European Green leader Philippe Lamberts MEP has spoken today about why Greens across Europe support the Robin Hood Tax. Joining the Europeans for Financial Reform conference on ‘Fighting for a Financial Transactions Tax (FTT) – how and why?‘ he stressed that the crisis wasn’t over, and that Europe’s people needed an FTT, not forgetting the north-south benefits of an FTT. He said an FTT was needed to make the economy work for people rather than the other way round.

Meanwhile International Trade Union Confederation (ITUC) General Secretary Guy Ryder said that Governments around the world were asking “where the hell are we going to get the money from?” $700 billion a year was needed around the OECD to meet the costs of the recession, of climate change and of global poverty. The case for an FTT wasn’t just theoretical it was vital. Read more »

   Filed under: Europe, Financial crisis, Tax, Transactions tax | No Comments »

In a transatlantic video-press conference this afternoon, AFL-CIO President Rich Trumka and European Socialists’ leader Poul Nyrup Rasmussen have emphasised the global demand for financial transactions taxes (FTTs). Trumka and Rasmussen put the call for FTTs in the context of wide-ranging financial reform.

But Trumka stressed the need for money to create jobs. FTTs would also raise over $100 billion in the US and would hardly touch small investors. He said that the US needs to find the money for – among other things – a major programme to create jobs. Without a financial speculation tax, a Robin Hood Tax or whatever, that programme couldn’t be delivered. “This is the first time that such a broad coalition has come together to seek financial reform in the interests of ordinary people.” Read more »

   Filed under: Financial crisis, Tax, Transactions tax | No Comments »

The UN Secretary General’s office has just released a draft report on progress towards achieving the Millennium Development Goals. It makes for sober reading.  Given the scale of the global financial crisis, “over 300 million new jobs will need to be created over the next five years” and that’s just to “return to precrisis levels of unemployment.”

Pre-crisis, some 633 million workers, or 21.2% of the world’s workforce, were struggling to feed their families on less than $1.25 per person per day. Thanks to the global financial crisis our planet is now home to an extreme 215 million workers living in absolute poverty. Read more »

   Filed under: Financial crisis, International development, unemployment | 3 Comments »

I would really have liked to be positive about the CBI’s Budget Submission, given the gravity of the economic situation in which we find ourselves. Here we are, probably two months before a General Election, holding our collective breath and hoping the next growth figures will show the economy still recovering, rather than back in recession. It would have been great if we could agree on the major challenges facing us. Sadly, that is not to be.

The CBI’s prescription is wrong because its objectives are wrong. Running through its submission seems to be a belief that only the economy matters. The needs of society are not worth a mention. What’s more, the most important things about the economy are those that the markets think are important. Read more »

   Filed under: Economics, Financial crisis, Politics | No Comments »

Today’s Financial Times reports on the TUC’s call for  a new strategic investment fund, with a budget of £5bn, to invest in key industrial sectors. This is one of a number of recommendations set out in our new policy paper, ‘Developing UK industrial policy: lessons from France’.

Five years ago, many would have rejected the idea that we could learn much from across the Channel. But after an economic downturn in which the French have suffered markedly less than the UK, the TUC felt it was prudent to understand why this was the case, and to see if there were lessons to be learned . Read more »

   Filed under: Economics, Financial crisis, Globalisation, Manufacturing | No Comments »

Duncan Green of Oxfam has a splendidly robust defence of the Robin Hood Tax against its detractors on his blog.

He is absolutely right that many of its critics have build vast superstructures out of arguments necessarily simplified to ensure the campaign goes wider than the wonk community.

And I share his (minor) criticisms of the campaign – but these are now being addressed.

The onus is still on the critics to come up with a better source of finance or justify big cuts, failed Millennium Development Goals and insufficient action to beat climate change.

   Filed under: Financial crisis, Tax, Transactions tax | 3 Comments »

I once heard a ‘radio expert’ say that most successful business people would be diagnosed as sociopaths if they were not rich. He confirmed my prejudices, so I was reluctant to decide this was one of those media facts – announced confidently, but with nothing to substantiate them. Today’s news has me wondering whether he was right after all.

First, there was yesterday’s news that nationalised Royal Bank of Scotland is going to pay out £1.3 billion in bonuses. More than 100 RBS bankers are going to get bonuses of over a million pounds. They lost £3.6 billion last year, but that was “lower than expected” so that’s all right then. Read more »

   Filed under: Financial crisis, They Just Don't Get It | 1 Comment »

Rewind almost three years and the trade union movement was embroiled in a bitter media spat with the private equity industry. In a portent of something much bigger, private equity firms were accused of playing fast and loose with high levels of debt to buy up companies they neither understood nor cared for in order to make a quick buck.

Trade unions are used to being patronised and dismissed. There have always been countless armchair policy-makers with an infinitely greater understanding of the real world (most of them have their own blog these days). But the ridicule aimed at the unions in the Summer of 2007 was often intense. Read more »

   Filed under: Financial crisis, Private equity, Tax | 1 Comment »