Economy: Zoom Iceland

Iceland is the favorite country of those who say currency devaluation and capital controls are essential tools for countries battling debt crises. After the island nation’s banks, whose assets had reached 14 times its gross domestic product, went bust in 2008, Iceland’s government separated the banks’ foreign clients, who had invested in Iceland in search of relatively high yields, from domestic depositors; it froze payments to the foreigners and transferred the domestic clients’ assets to nationalized successor banks. That allowed the country with assistance from the International Monetary Fund  to rebuild its financial and fiscal systems. Icelandic banks have head-spinning capital ratios (30.2 percent for Landsbankinn, the heir of Landsbanki, one of the lenders that crashed in 2008) because supervision has tightened substantially and perhaps because Iceland is the only nation that jailed big bankers after the financial crisis. The government closed last year with a bumper fiscal surplus. 

Enter the Data Economy 

Data is rapidly becoming the lifeblood of the global economy. It represents a key new type of economic asset. Those that know how to use it have a decisive competitive advantage in this interconnected world, through raising performance, offering more user-centric products and services, fostering innovation – often leaving decades-old competitors behind.
As the world stands on the cusp of major new breakthrough technologies – Artificial Intelligence (AI), blockchain, robotics – advanced economies can reap significant benefits from embracing the data revolution. 

Recent research shows that even limited use of big data analytics solutions by the top 100 EU manufacturers could boost EU economic growth by an additional 1.9% by 2020.

And it is not only the manufacturing industry that stands to gain. Data analytics will soon be indispensable to any economic activity and decision-making process, both public and private.
The transition towards a data-driven economy in Europe is trailing, with market players and public authorities reluctant or simply unable to grasp new realities. To build a thriving data economy, Europe needs to dispel perceived uncertainties and overcome fragmented national environments. A sensible balance should be struck between data protection and consumer rights, on the one hand, and economic benefits and innovation on the other.

extrait écrit par l’agence France Trésor: plan Juncker en France

Pendant longtemps, à la tête de l’Agence France Trésor, son travail a essentiellement consisté à endetter la France à moindre frais.

Désormais, depuis la forêt du Luxembourg, son rôle consiste à prêter de l’argent avec le plus d’efficacité possible. Car à chaque fois, pour Ambroise Fayolle la ligne rouge est toujours la même : gérer au mieux l’argent public qui lui est confié, qu’il soit celui du contribuable français ou européen.
Depuis un an, cet haut fonctionnaire du Trésor occupe la place de Vice-Président de la Banque Européenne d’investissement où il représente la France. A ce titre, il chapeaute notamment les financements accordés par l’institution à des projets français. L’an dernier, la BEI a prêté 8,7 milliards d’euros à la France, qui figurait ainsi au troisième rang européen. Mais s’il s’agissait d’une année record, une marche supplémentaire pourrait bien être franchie cette année, grâce au soutien du plan Juncker. La BEI est en effet le bras armé de ce plan de relance de 315 milliards d’euros qui doit conjuguer capitaux publics et privés.

Ambroise Fayolle ne ménage pas ses efforts pour que la France tienne son rang dans ce domaine. Symboliquement, les premiers fonds estampillés Juncker sont même arrivés en France, via le FEI, la filiale de la BEI qui s’occupe notamment de financer l’innovation et les entreprises. Mais derrière cet activisme, le fonds Juncker tarde à vraiment rencontrer son public, en Europe en général et en France en particulier. «Les français n’ont pas vraiment compris le principe du plan Juncker, regrette-t-on dans l’entourage du commissaire européen en charge du dossier, Jyrki Katainen. Il faut présenter des projets qui soient en partenariat très fort avec les financements privés, et pas uniquement des propositions portant sur les infrastructures ». Et la commission européenne d’inviter Paris à proposer des projets plus portés sur l’innovation.

Ambroise Fayolle, lui, l’assure : la France sera au rendez-vous. Aujourd’hui, d’ailleurs, il accueillera avec son président le premier ministre français Manuel Valls qui se rend au siège de la BEI, au Luxembourg pour y signer des projets que l’on annonce de grande ampleur, financés par la Banque européenne. De quoi enfin remettre l’hexagone à son rang.


Joseph Stiglitz: ‘Cheating’ Ireland, muddled Europe

By Denis Staunton

Europe gets some things right, such as its ruling on Apple’s taxes in Ireland, but the euro itself is broken and European politicians lack the will to fix it. It’s unlikely to end well, says the US Nobel economics laureate.

Joseph Stiglitz was supposed to be talking about his new book about the euro, which he believes is in danger of destroying the European project. But when we meet in London this week the European Commission has just issued its ruling ordering Apple to pay €13 billion in back taxes to the Republic of Ireland, a move the Nobel economics laureate applauds.

He believes, however, that the Apple decision is calamitous for Ireland’s reputation, which he says was already damaged this summer by the 26 per cent growth rate recorded for GDP in 2015. This reported growth is widely perceived as a distortion of Ireland’s economic performance, which has been more modest.

“You know that in the long experience of increases in productivity that [level of growth] is not likely, or possible. But there’s no limit on how much you can cheat. You can increase your cheating in one year by that much,” he says.

“That 26 per cent growth rate sent a strong message about the magnitude of the corruption going on. It’s tax corruption. People are not paying the taxes that they ought to be paying, and it’s robbing developing countries, it’s robbing the United States.”

Although the commission says that Apple’s tax deal with the Irish authorities broke EU state-aid rules, there is no suggestion that the company sought to unlawfully evade paying its fair share of tax.

“In this particular case it was legal. In some ways the fact that it was legal almost makes it worse, in the sense that it says that Apple has been able to buy governments. Not in brown paper envelopes but in job creation. ‘We’ll give you 300 jobs and you give us $1 billion.’ You think about the trade-off,” Stiglitz says.

He believes the commission was right to challenge the Apple deal, arguing that the company cannot claim that the money was really earned in Ireland but should not be subjected to the normal Irish tax rate.


The New Deal ?

There is a large body of literature analyzing the onset of the Great Depression or the factors influencing economic recovery in the 1930s, especially the New Deal. The role of income inequality before and during the Great Depression, however, has almost never been discussed thoroughly. This paper attempts to answer two questions. Firstly, was inequality perceived as a problem by the Roosevelt administration? Secondly, did the New Deal incorporate these concerns such that economic policy design did take seriously the problem of inequality? Using official documents such as transcripts of Roosevelt’s inaugural speeches, fireside chats and press conferences, this paper finds that top-end inequality was not recognized as a major political topic. Restoring the purchasing power of workers and farmers, however, appears to have been a political goal of the administration. The impact of New Deal policies on top-end income inequality or the wage share, however, can only be considered as modest. Only World War II and the long-term legislation of the New Deal may be considered successful in reducing top income and wealth shares and raising the wage share.source and analysis :

Testing Piketty’s Hypothesis by FMI

Thomas Piketty’s Capital in the Twenty-First Century puts forth a logically consistent explanation for changes in income and wealth inequality patterns. However, while rich in data, the book provides no formal empirical testing for its theoretical causal chain. In this paper, I build a set of Panel SVAR models to check if inequality and capital share in the national income move up as the r-g gap grows. Using a sample of 19 advanced economies spanning over 30 years, I find no empirical evidence that dynamics move in the way Piketty suggests. Results are robust to several alternative estimates of r-g.source and analysis:

Germany makes plans for a post-Brexit Britain and wants us to still trade with the EU


She is already making plans to keep business going with Britain just hours after it was announced Brits had voted for Brexit.

Boris Johnson has said there is no need to rush the process of leaving the EU but it looks like it needs us as work is already underway to draw up terms.

German business paper Handelsblatt reports Germany wants to offer us ‘associated partnership status’ with other European Union countries.

This is according to an eight-page document entitled “The German strategy regarding a Brexit”, where the finance ministry said it wanted “to offer constructive exit negotiations” with other EU members, and adds it expects the talks between Brussels and London to be difficult.

The precise terms of the “associated partnership status” will depend on the deal hammered out between Britain and the remaining EU members.

It would draw up a framework for co-operation between us and the European Union and could include political, trade, social, cultural and security links.

Germany’s strategy comes after Brussels chiefs demanded Britain get on with leaving the EU.

In a joint statement from Commission President Jean Claude Juncker and EU Council chief Donald Tusk, the PM was urged to invoke Article 50 – effectively Britain’s resignation letter – as soon as possible to kick-start talks over a departure.

They said: “This is an unprecedented situation but we are now united in our response.

“We now expect the United Kingdom government to give effect to this decision of the British people as soon as possible, however painful that process may be.

“Any delay would unnecessarily prolong uncertainty.”

But in his resignation speech earlier today David Cameron signalled the UK would not be in a position to begin divorce negotiations until a new PM is in Downing Street this October.

Britain remains a member of the EU with all the rights – and obligations – until the process of negotiations over the terms of a departure is settled.

Invoking Article 50 begins a two-year period of talks to try and thrash out terms.

Earlier today European Parliament chief Martin Schulz threatened to hit Britain with “consequences” – to show other EU member states they should not follow the UK out of the door.

‘Brexit’ Opens Uncertain Chapter in Britain’s Storied History

By Steven Erlanger New York Times

LONDON — Asked to vote in or out, Britain has chosen decisively to cast off its 43-year-old membership in the European Union, leaving it to face a more complex question: What kind of nation will it be now?

Will Britain be the outward-looking, entrepreneurial, confident country that makes its independent way in the world, as the leaders of the Leave campaign insisted it could be?
Or will it retreat to become a Little England, nationalist and a touch xenophobic, responding to the voters that drove it to quit the European Union?

Even more important: Will it even hold together? With Scotland deeply pro-European, pressure will increase for another independence referendum that could bring an end to the United Kingdom.

Britain, a nation whose storied history has encompassed the birth of constitutional government, global empire, royal pageantry and heroic defense against fascism, is entering unknown territory.

The questions about its new path could remain unresolved for years. On Friday morning, at least, Britain remained a member of the European Union in full standing, just as it was 24 hours earlier.

But the impact of this plebiscite is likely to be profound and long-lasting, well beyond the immediate tumult in the financial markets, and the questions about Britain’s future will be answered against the backdrop of potential political, legal and economic upheaval.

A Conservative government with its first majority since 1992 has ripped itself apart on a global stage and is badly damaged. The main question on that front seems to be whether Prime Minister David Cameron and his top aide, George Osborne, the chancellor of the Exchequer, leave slowly or speedily. An early general election is not out of the question.

Once Britain begins the formal process of withdrawing from the European Union by exercising Article 50 of the treaty that governs membership in the bloc, it will trigger a two-year clock on negotiations, a period in which Britain — including millions of European citizens living in Britain and British citizens living in the European Union — will be in limbo.

And if the British Treasury, the Bank of England, the International Monetary Fund and the Institute for Fiscal Studies are to be believed, the British economy is in for a severe shock. The Treasury estimates that the British gross domestic product, representing the size of the economy, will fall by 3.5 percent, clobbering tax receipts; that half a million people will lose their jobs; and that housing prices (and thus personal wealth of homeowners) will fall by 10 percent.

Those estimates were criticized by the Leave campaign, including senior members of government, as unfounded fear mongering. Now Britain will find out how accurate they are.
This vote was a severe shock to Britain’s political class from voters who are angry, confused and deeply distrustful of elites.

The Labour Party joined Mr. Cameron in campaigning to stay in Europe, as did nearly all the other parties represented in Parliament, with the exception of the Democratic Unionists and the U.K. Independence Party, which was founded on a platform of leaving the European Union. Yet despite that solid wall of establishment voices — or perhaps because of them — Britain voted for a fundamental change in direction.

“The British political class should pay attention,” said Tony Travers, professor of government at the London School of Economics.

“There is a lot of disaffection with both main parties,” he said. In 1955, the Conservatives and Labour won 97.5 percent of the vote, but in last two elections, the two won only about 66 percent of the vote, he said.

Graphic | Repercussions of Britain’s Exit From the E.U. Investors, policy makers and countries face a messy breakup with vast financial, economic and political implications.

“Into that vacuum something else has to move, but what?” Mr. Travers asked. “The political class has to wonder how to appeal to those who increasingly feel left out of the system, how to stop large numbers of voters feeling cut out of economic change and success.”

The Conservative Party is already split between traditional establishment figures like Mr. Cameron and others who embraced the anti-elite, anti-immigration posture of the Leave campaign, most prominently the former mayor of London, Boris Johnson, and one of Mr. Cameron’s senior cabinet members, Michael Gove.

Australia says French company wins huge submarine contract

CANBERRA – Australia announced Tuesday that French company DCNS has beat out bidders from Japan and Germany to build the next generation of submarines in Australia’s largest-ever defense contract.
DCNS, Germany’s ThysennKrupp Marine Systems and Japan’s Mitsubishi Heavy Industries were in the running to build 12 conventional submarines that the Australian navy expects will cost at least 56 billion Australian dollars ($43 billion).
Prime Minister Malcolm Turnbull said the French-designed submarines would be built in the Australian manufacturing hub of Adelaide.

“The French offer represented the capabilities best able to meet Australia’s unique needs,” Turnbull told reporters in Adelaide.

“I want to thank TKMS and the government of Japan for their proposals, which were of a very high quality. However, the recommendation of our competitive evaluation process … was unequivocal — that the French offer represented the capabilities best able to meet Australia’s unique needs,” he added.

Addressing the issue of the failed bidders, Turnbull said, “As far as Japan is concerned…both Prime Minister (Shinzo) Abe and I, and our respective governments and, I believe, our respective nations are thoroughly committed to the special strategic partnership between Australia and Japan, which gets stronger all the time.”

In Tokyo, Chief Cabinet Secretary Yoshihide Suga said the Japanese government “feels regret” that Australia decided to choose the French tender, but that Tokyo will continue to deepen security cooperation bilaterally with Canberra and trilaterally with Washington.

“Australia will continue to be a special strategic partner for our country,” the top government spokesman said at a news conference.

According to Suga, Turnbull informed Abe of the decision on Monday. Australia’s defense and foreign ministers did likewise to their Japanese counterparts the same day.

Prior to the announcement, Australian media had reported that Japan’s proposal to provide its Maritime Self-Defense Force’s Soryu-class diesel-electric submarine technology, with highly advanced stealth capabilities, did not have a strong chance against the other bids.

The failure cast a shadow over efforts by the Abe administration to add cutting-edge defense equipment to Japan’s export repertoire. If successful, the submarine contract would have been Japan’s first full-fledged defense export deal since Tokyo repealed a nearly half-century ban on arms exports in April 2014.
Speaking to reporters Tuesday in Tokyo, Defense Minister Gen Nakatani said he is confident in Japan’s submarine technology and capabilities.

“I will ask the Australian side why (the Japanese bid) was not chosen, and have the findings firmly reflected in our activities,” he said.

Nakatani, however, said Japan wants to “fully cooperate” with Australia on issues of mutual interest such as stabilizing the security environment in the Asia-Pacific region including the South China Sea, where China and its Southeast Asian neighbors are engaged in territorial disputes.
Asked if he thinks Australia’s decision may have reflected China’s perceived pressure not to choose Japan in the submarine deal, Nakatani said, “I don’t think so.”

Mitsubishi said in a statement, “It is deeply regrettable that Japan’s capabilities were not sufficiently conveyed, which has led to the result announced today.”

French President Francois Hollande said in a statement that the deal was a “decisive step forward” in the strategic partnership between France and Australia. French Defense Minister Jean-Yves Le Drian told Europe 1 radio that it was a “major victory for the French naval industry.”

France offered a diesel-electric version of the Barracuda-class nuclear submarine under construction for the French navy. Japan proposed a longer version of its Soryu-class diesel-powered propulsion system with advanced stealth capabilities.

Germany offered a larger variation of its Type 214 submarine made for Australian specifications called a Type 216.

The French bid offered the same pump jet propulsion that gave its nuclear submarines their advanced stealth capacity. Other diesel-electric submarines are too small to be fitted with the same stern-heavy technology.

Australia’s Shortfin Barracuda Block1A will be 97 meters (318 feet) long and weight 4,500 metric tons (5,000 U.S. tons) — 2.5 meters (8 feet) shorter and 200 metric tons (220 U.S. tons) lighter than its French nuclear cousin.

The German bid had highlighted their decades of experience in building submarines for several navies and had publicly offered to build the entire fleet in Adelaide for AU$20 billion — less than half the navy’s expected cost. It promoted as its edge over competitors its partnership with German engineering firm Siemens which would have provided the submarines’ software and promised to create a digital shipbuilding center in Adelaide.

Australia already has one of the world’s largest conventional submarines, the Australia-built Collins class, and the navy insisted that its replacement at least match its range of 12,000 nautical miles (22,000 kilometers). At 3,100 metric tons (3,400 U.S. tons) and 77 meters (253 feet long), the Collins will be dwarfed by the next-generation Shortfin Barracuda.


modèle social Suisse assurance chômage généreuse

Le système d’assurance chômage suisse est en excédent ! Les allocataires peuvent percevoir jusqu’à 80% de leur ancien salaire et ce pendant une durée de deux ans. Une générosité qui ne tient pas du « miracle » mais d’une gestion extrêmement rigoureuse des finances. Explication, à l’heure où, en France, les partenaires sociaux renégocient la convention d’assurance chômageLa Suisse : ses lacs, ses banques, ses montagnes et…. son assurance chômage qui mérite vraiment le détour, tant pour la rigueur de sa gestion que pour sa générosité. Un modèle à regarder et à ausculter alors qu’en France, organisations patronales et syndicales renégocient actuellement une nouvelle convention d’assurance chômage applicable le 1er juillet prochain. L’objectif est de parvenir à des économies alors que l’Unedic – l’organisme qui gère l’assurance chômage – enregistre un déficit annuel compris entre 3 et 4 milliards d’euros et que sa dette cumulée dépasse les 25 milliards d’euros. Une situation inimaginable du côté de la Suisse où le signal d’alarme est tiré dès la première alerte sur les finances du régime.

L’assurance chômage suisse est gérée par l’Etat

C’est très tardivement, à compter de 1984, que la Suisse a introduit une assurance-chômage obligatoire même s’il en existait des prémisses depuis la fin du XIXe siècle. Première grande différence avec la France, l’assurance-chômage suisse est une institution fédérale relevant du régime suisse de sécurité sociale au même titre que l’assurance maladie ou les prestations familiales. Il s’agit donc d’un dispositif étatique même si, bien sûr, comme toujours chez les Helvètes, au nom du sacro-saint « consensus » les organisations patronales et syndicales sont étroitement liées aux prises de décisions et au fonctionnement de l’assurance chômage.

En revanche, comme en France, les ressources du système sont essentiellement assises sur les cotisations des entreprises et des salariés. Depuis 2011, cette cotisation est égale à 2,2% du salaire (1,1% part employé et 1,1% par employeur) pour les salaires allant jusqu’à 148.000 francs suisses annuels (soit environ 133.200 euros). Pour les revenus au-delà de cette somme, il existe une cotisation supplémentaire de 1%. Globalement, ces cotisations « rapportent » 6,8 milliards de francs suisses à l’assurance chômage. Un budget complété par une participation financière de la Confédération Helvétique (465 millions de francs suisses) et des 26 cantons (155 millions).

Une indemnisation qui peut atteindre 80% du salaire

Et là, première surprise, les prestations de l’assurance chômage suisse sont extrêmement généreuses, davantage d’ailleurs pour leur montant que pour leur durée. Et pourtant, selon une légende tenace, la France, est toujours présentée, comme le pays le plus bienveillant en matière d’assurance chômage.

Un salarié suisse de moins de 55 ans qui a cotisé durant au moins un an percevra une indemnité durant un an. Et s’il a cotisé au moins 18 mois, cette indemnisation sera également portée à 18 mois. Pour les plus de 55 ans, l’indemnisation peut aller jusqu’à deux ans. Rappelons qu’en France, la durée d’indemnisation varie entre 4 et 36 mois selon l’âge et la durée de cotisation.

Quant aux montants de l’indemnisation, en Suisse, c’est… Byzance ! Un ex-salarié sans enfant à charge percevra 70% de son dernière salaire brut, dans la limite de 10.500 francs suisses par mois au maximum (soit environ 9.500 euros) et ce montant est porté à 80% de l’ancien salaire quand l’assuré a des enfants à charge (dans la limite de 12.350 francs suisses). Rappelons qu’en France, le montant de l’allocation de remplacement varie entre 57% et 75% de l’ancien salaire brut selon le montant de la rémunération perçue et la situation familiale ne rentre pas en ligne de compte.

Les allocataires sont fortement incités à retrouver vite un emploi et ce, via des « mesures actives » (formation, stage, appui à la recherche, etc) financées à hauteur d’environ 500 millions de francs suisses par an.
Les offices régionaux de placement (l’équivalent de Pôle emploi) est dans l’obligation de proposer un emploi « convenable » à l’allocataire. Légalement, cette offre d’emploi peut être située jusqu’à deux heures de transport du domicile du salarié… Ce qui couvre une bonne partie de la petite Suisse.

Comme en France, un allocataire qui n’apporte pas la preuve de sa recherche effective d’emploi peut connaître un « rappel à l’ordre » qui se traduira par l’interruption temporaire du versement de son allocation, voire définitive en cas de récidive. Mais, au secrétariat d’Etat à l’économie (Seco), on précise que ces « cas sont très rares car ce n’est pas dans la mentalité suisse de vouloir profiter du système. Au contraire, beaucoup de salariés licenciés ne s’inscrivent même pas au chômage car ils jugent cette pratique indigne et impudique ! »….

En tout état de cause, il est de la responsabilité de chaque Canton de décider de « couper » l’indemnisation d’un demandeur d’emploi.

On notera que le choix de la caisse de chômage (Cch) qui verse les allocations appartient à l’ex-salarié. Celui-ci peut opter pour une caisse publique gérée par le Canton mais aussi pour une caisse privée gérée par une organisation patronale ou syndicale.

Mais, là où le système suisse d’indemnisation du chômage surprend le plus c’est dans sa gestion… très suisse.

Des règles de gestion extrêmement strictes

Les gestionnaires du régime veillent à ce qu’il n’y ait aucun dérapage dans les finances. Sinon, ils ajustent extrêmement vite et brutalement les prestations et les allocations. Le Seco explique : « Notre système d’assurance chômage est calibré pour un taux de chômage d’environ 3,5% et pour que l’endettement ne dépasse pas 2,5% de la masse salariale. Si ces bornes sont dépassées, on intervient immédiatement ».

Par exemple, après la crise financière de 2008, le chômage a grimpé en Suisse – pour atteindre 3,6% en 2010, soit 205.0000 chômeurs,… ce qui est beaucoup pour la Suisse – et la dette de l’assurance chômage est montée à 7 milliards de francs suisses en 2010, notamment en raison de l’explosion du « maintien en activité réduite » (chômage partiel) également indemnisé par le dispositif. Ni une ni deux, des « mesures exceptionnelles » ont été adoptées par le Parlement suisse et acceptées par une « votation » en septembre 2010. C’est notamment l’indemnisation des jeunes qui a été revue à la baisse, alors que les cotisations augmentaient.

Résultat, les réserves ont été reconstituées et une… baisse des cotisations chômage est maintenant envisagée. Grâce à cette gestion drastique et à la baisse du chômage – dont le taux est revenu à 3,3% selon les statistiques suisses-, en quatre ans, le nombre d’allocataires est redescendu à 136.764 en 2014 et l’assurance chômage est revenue à … un excédent de recettes de 737,3 millions de francs suisses en 2014. En 2015, il atteignait encore 610 millions. Des réserves qui ont permis à l’assurance chômage de rembourser ses emprunts auprès de la Confédération suisse.

Cette vitesse de réaction serait littéralement impossible sans le consensus social qui règne en Suisse. Les organisations patronales et syndicales se retrouvent unies pour ne pas laisser les finances du régime se dégrader. Et même les syndicats sont prêts à accepter des sacrifices temporaires sur les prestations… Mais, il est vrai que, dans ce petit pays, il ne règne pas le climat de suspicion systématique entre partenaires sociaux que l’on trouve en France. Et la défense de la fameuse « prospérité suisse » passe au-dessus de tout.